Amended proposal for a Council Regulation (EC) laying down measures to prohibit the release for free circulation, export, re-export or placing under a suspensive procedure of counterfeit and pirated goods (1) (Amendment to the proposal for a Council Regulation (EEC) laying down measures to prohibit the release for free circulation, export or transit of counterfeit and pirated goods) (94/C 86/06) (Text with EEA relevance) COM(94) 43 final

(Submitted by the Commission pursuant to Article 189a (2) of the EC Treaty on 18 February 1994)

The Commission hereby amends its proposal as follows:

1. The title of the Regulation is replaced by the following:

'Amended proposal for a Council Regulation (EC) laying down measures to prohibit the release for free circulation, export, re-export or placing under a suspensive procedure of counterfeit and pirated goods`;

2. The second recital is replaced by the following:

'Whereas the marketing of counterfeit goods and pirated goods causes considerable injury to law-abiding manufacturers and traders and to owners or holders of copyright or related rights, and misleads consumers; whereas such goods should as far as possible be prevented from being placed on the Community market and measures should be adopted to that end to deal effectively with this unlawful activity without impeding the freedom of legitimate trade; whereas this objective is also being pursued through efforts being made along the same lines at international level;`

3. The fourth recital is replaced by the following:

'Whereas action by the customs authorities to prohibit the release for free circulation or placing under a suspensive procedure of counterfeit or pirated goods should also apply to the export or re-export of such goods from the Community;`

4. The seventh recital is replaced by the following:

'Whereas action by the customs authorities must consist in suspension of the release for free circulation, export or re-export of goods suspected of being counterfeit or pirated or in detention of such goods if they are placed under a suspensive procedure or re-exported with notification for as long as is necessary to enable it to be determined whether the goods are actually counterfeit;`

5. The eighth recital is replaced by the following:

'Whereas the objective to be achieved by the introduction of such a procedure does not require the drawing up of Community provisions either as regards the designation of the judicial authority competent to determine whether the goods entered for free circulation, export or re-export, or detained when placed under a suspensive procedure or re-exported subject to notification, are counterfeit or pirated, or as regards the procedures to be followed for referral to that authority; whereas in the absence of Community rules on the subject the said competent authority should furthermore decide cases submitted to it by reference to the criteria which are used to determine whether goods produced in the Member State concerned infringe intellectual property rights;`

6. The ninth recital is replaced by the following:

'Whereas it is necessary to determine the measures to be applied to the goods in question where it is established that they are counterfeit or pirated; whereas those measures must not only deprive those responsible for trading in such goods of the economic benefits of the transaction and penalize them, but also constitute an effective deterrent to further transactions of the same kind;`

7. The eleventh recital is replaced by the following:

'Whereas the common rules laid down by this Regulation should be uniformly applied and to that end provision made for a Community procedure to ensure that measures to implement these rules are adopted in good time and their implementation coordinated in the interests of greater effectiveness;`

8. Article 1 (1) (a) is replaced by the following:

'1. This Regulation lays down:

(a) the conditions under which the customs authorities shall take action where goods suspected of being counterfeit or pirated, are:

- entered for free circulation, export or re-export,

- found when checks are made on goods placed under a suspensive procedure within the meaning of Article 84 (1) (a) of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code, or re-exported subject to notification;`

9. The third indent of Article 1 (2) (a) is deleted;

10. Article 1 (2) (b) is replaced by the following:

'(b) "pirated goods" means goods which are or contain copies of protected works, performances or designs made without the consent of the holder of the copyright or related rights, or of the owner or holder of a design right, whether registered under national law or not, or of a person duly authorized by him in the country of production in cases where the making of those copies would have constituted an infringement of the right in question under Community law or the law of the Member State in which the application for action by the customs authorities is made`;

11. The following new paragraph 3 is inserted after Article 1 (2):

'3. Any tool, mould or matrix or similar equipment (including printing equipment and films likely to be used to apply the trademark to goods) which is specifically designed or adapted for the manufacture of a counterfeit trademark, products bearing such a trademark or pirated goods shall be treated as a counterfeit or pirated good, as appropriate, provided that the use of such tools, moulds, matrices or equipment infringes the rights of the owner or holder of the right under Community law or the law of the Member State where the application for action by the customs authorities is made.`;

12. Article 1 (3) is replaced by the following, which becomes paragraph 4:

'4. This Regulation shall not apply to goods which bear a trademark with the consent of the owner or holder of that trademark or which are protected by a copyright or related right or a design right, and which have been manufactured with the consent of the owner or holder of the right but are placed in one of the situations referred to in paragraph 1 (a) without his consent.

Nor shall it apply to goods referred to in the first subparagraph which have been manufactured, or bear a trademark, under conditions other than those agreed with the owners or holders of the rights in question.`;

13. Article 2 is replaced by the following:

'Article 2

The release for free circulation, export, re-export or placing under a suspensive procedure of goods found to be counterfeit on completion of the procedure provided for in Article 5 shall be prohibited.`;

14. Article 3 (1) is replaced by the following:

'1. In each Member State, the owner or holder of a right may lodge an application in writing with the competent authority for action by the customs authorities if the goods are in one of the situations referred to in Article 1 (1) (a).`;

15. The first indent of Article 3 (2) is amended as follows:

'- a sufficiently detailed description of the goods to enable the customs authorities to recognize them or a reference to the work or performance and`;

16. The third subparagraph of Article 3 (2) is amended as follows:

'By way of indication in the case of pirated goods, this information shall, wherever possible, include:`;

17. Article 3 (5) is amended as follows:

'5. The authority with which an application drawn up pursuant to paragraph 2 has been lodged shall take a decision on the application and notify the applicant in writing of that decision within five working days.`;

18. Article 3 (6) is amended as follows:

'6. Member States may require the owner or holder of a right, where his application has been granted, or where action referred to in Article 1 (1) (a) has been taken pursuant to Article 5 (1), to provide security to:

- cover any liability on his part vis-a-vis the persons involved in one of the operations referred to in Article 1 (1) (a) where the procedure initiated pursuant to Article 5 (1) is discontinued owing to an act or omission by the owner or holder of the right or where the goods in question are subsequently found not to be counterfeit or pirated.`;

19. Article 3a is inserted:

'Article 3a

Where, in the course of checks made under one of the customs procedures referred to in Article 1 (1) (a) and before an application by the owner or holder of the right has been lodged or approved, it is clear to the customs service that goods are counterfeit or pirated, the customs authority may, in accordance with the rules in force in the Member State concerned, notify the owner or holder of the right, where known, of a possible infringement thereof. In that case the customs authority shall be allowed to suspend release of the goods or detain them for a period of three working days to enable the owner or holder of the right to lodge an application for action in accordance with Article 3.`;

20. Article 4 is replaced with the following:

'Article 4

The decision granting the application by the owner or holder of the right shall be notified immediately to the relevant customs offices of the Member State.`;

21. Article 5 (1) is amended as follows:

'1. Where a customs service to which a decision granting an application by the owner of a trademark has been forwarded pursuant to Article 4 is satisfied, after consulting the applicant where necessary, that goods in one of the situations referred to in Article 1 (1) (a) correspond to the description of the counterfeit or pirated goods contained in that decision, it shall suspend release of the goods or detain them.

The said service shall immediately inform the authority which dealt with the application in accordance with Article 4. The service, or the competent authority which dealt with the application, shall immediately inform the declarant and the person who applied for action to be taken. In accordance with national provisions on the protection of personal data and commercial, industrial, professional and official secrets, the customs office or competent authority shall notify the owner or holder of the right, at his request, of the name and address of the declarant and, where known, of the consignee so as to enable the owner or holder of the right to ask the competent authorities to take a substantive decision. They shall afford the applicant and the persons involved in the operations referred to in Article 1 (1) (a) the opportunity to inspect the goods whose release has been suspended or which have been detained.`;

22. The introductory sentence of Article 5 (2) is amended as follows:

'2. The law in force in the Member State on whose territory goods are found in one of the situations referred to in Article 1 (1) (a) shall apply as regards:`;

23. Article 6 (1) is replaced by the following:

'1. If, within 10 working days of notification of suspension of release or of detention, the customs service referred to in Article 5 (1) has not been informed that the matter has been referred to the authority competent to take a substantive decision on the case in accordance with Article 5 (2) or that interim measures have been adopted by the duly empowered authority, the goods shall be released, provided all the import formalities have been complied with, and the detention order revoked.

Where appropriate, this period may by extended by not more than 10 working days.`;

24. Article 7 (1) (a) and (b) are replaced by the following:

'(a) as a general rule, and in accordance with the relevant provisions of national law, to destroy goods found to be counterfeit or pirated, without compensation of any sort and at no cost to the exchequer. The goods in question may be disposed of outside commercial channels, subject to the explicit authorization of the owner or holder of the right, for socially useful purposes;

(b) to take in respect of such goods any other measures having the effect of effectively depriving the persons concerned of the economic benefits of the transaction.

The following in particular shall not be regarded as having such effect:

- re-exporting the counterfeit or pirated goods in the unaltered state,

- other than in exceptional cases, and subject to the explicit authorization of the owner or holder of the right, simply removing the trademarks which have been affixed to the counterfeit goods without authorization,

- entering the goods for a different customs procedure.`;

25. Article 7 (2) is replaced by the following:

'2. The counterfeit or pirated goods may be handed over to the exchequer, which may dispose of them subject to paragraph 1 (a).`;

26. Article 9a is inserted:

'Article 9a

Moreover, each Member State shall introduce penalties to apply in the event of infringements of Article 2. Such penalties must be sufficiently severe to encourage compliance with the rules.`;

27. The following subparagraph is inserted before the last subparagraph of Article 12.

'The Commission shall coordinate the fight against trade in counterfeit and pirated goods.`;

28. Article 13 is replaced by the following:

'Article 13

The Commission shall, on the basis of the information referred to in Article 12, report on a regular basis to the European Parliament and the Council on the operation of the system and within one year dating from the first application of this Regulation, shall propose such amendments and additions as need to be made thereto.

The Commission in its assessment shall seek to analyse both the macro-economic and sectoral impact of counterfeiting and shall propose indicators suitable for the purposes of tracking the evolution of such changes.` (1) OJ No C 238, 2. 9. 1993, p. 9.