Customs: Frontline Guardians in the Battle Against Cross-Border Counterfeits

INTRODUCTION

The proliferation of counterfeit products poses a significant challenge globally, with countries actively striving to combat its detrimental effects. The global economy suffers a substantial drain of US$2.2 trillion annually due to the counterfeit market. In the fiscal year 2019-2020, the Indian government alone incurred a loss exceeding US$7 billion as a result of counterfeit activities, leading to the cost of over 3 million jobs.Counterfeiting activities extend beyond high-end luxury items to include everyday essentials such as spices, cooking oil, medicines, etc. From jeopardizing consumer safety to undermining legitimate businesses, counterfeit goods have far-reaching implications across economies. The global nature of counterfeiting facilitates cross-border commerce, emphasizing the critical role of customs regulations and authorities as the first line of defense.

WORLD CUSTOMS ORGANIZATION (WCO)’S ANTI-COUNTERFEIT SOLUTION

The WCO is at the forefront of global efforts to combat counterfeiting. It serves as a platform for customs administrations worldwide to collaborate and share best practices in addressing the illicit trade of counterfeit goods. The WCO also works closely with other international organizations, such as the WIPO and INTERPOL, to coordinate efforts and strengthen the global response to counterfeiting. India is a member of the WCO and actively participates in its initiatives and programs aimed at enhancing customs procedures, strengthening border controls, and combating illicit trade activities. For instance, India engaged with the WCO’s initiatives such as Operations ‘STOP’ and ‘PANGEA’, which target the trafficking of counterfeit goods through international mail and express courier services.

LEGAL FRAMEWORK IN INDIA

India, as a signatory to the WTO Agreement on TRIPS (Trade-Related Aspects of Intellectual Property Rights), is obligated to implement measures to combat the cross-border trade of goods infringing on intellectual property rights. The Indian government has consistently taken considerable steps to mitigate the influx of counterfeit products and the growth of the grey market. Under Indian law, the movement of carriers, vessels, crafts, passengers, and goods into and out of the country falls under the purview of the Customs Act, 1962 (hereinafter referred to as “the Act”), along with its associated rules and regulations. Sections 11(1) and 11(2)(n) and (u) of the Act empower the Central Government to prohibit the import or export of goods, either absolutely or subject to specific conditions, for the protection of patents, trademarks, copyrights, or any other relevant laws. Consequently, exercising the authority conferred by Section 156(1) of the Act, read with Sections 11(2)(n) and (u) of the Act, the Central Government has promulgated the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 (hereinafter referred to as the “IPR Enforcement Rules”), aimed at safeguarding the intellectual property rights of right holders concerning imported goods.

A pivotal initiative spearheaded by the Indian Customs Office (ICO) is the implementation of the Customs Recordal System, aimed at preventing the circulation of counterfeit and infringing goods across borders. Additionally, the ICO has introduced ICEGATE (Indian Customs Electronic Gateway), facilitating information exchange and e-filing services for cargo carriers and trade partners. Through the customs recordal platform, IP holders can directly notify customs authorities about both genuine and infringing products, enabling effective identification and appropriate action against counterfeit goods. In order to prevent the importation of counterfeit and low-quality products into India, IP owners are encouraged to record their IP rights with the ICO to monitor and confiscate them. This can be done in accordance with the IPR Enforcement Rules and the Act which serves as a safeguard for brand owners. Under the customs recordal system, the Applicants are required to submit an electronic application to the Indian Customs Office (ICO) through the Indian Customs IPR Recordation Portal, along with the requisite documents and information. Upon filing the online application, a Unique Temporary Registration Number is generated. Subsequently, upon approval of the application by the Commissioner of Customs, the temporary registration number is converted to a Permanent Registration Number. The period of customs registration is typically 5 years, after which renewal is required through re-filing before expiry to maintain the registration's validity.

CONCLUSION

The pervasive impact of counterfeiting on brand reputations and economic stability cannot be overstated. The trade of counterfeit goods poses a grave threat to the economy. Governments worldwide are diligently implementing measures to combat this illicit activity. Effective customs regulations and legislation play a pivotal role in addressing cross-border counterfeiting and act as a shield to guard rights. However, it is imperative to recognize that governmental efforts alone are insufficient; active cooperation from right holders is essential to effectively combat this menace and uphold intellectual property rights. 

References:

1. https://www.businessinsider.in/business/news/indias-illicit-market-has-resulted-in-loss-of-3-million-jobs-ficci/articleshow/94355700.cms 

2. annual-report-2022_2023.pdf (wcoomd.org) 

3. https://ficci.in/public/storage/sector/24/Add_docs/IP-Tool-Kit-for-Custom-Officials.pdf 

4.  Anti-Counterfeiting Border Measures under Indian Customs Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 (manupatra.in)