Proposal for a Council Regulation concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights
Date: 2003-01-20
Institutions: European Commission
Subjects: customs regulations, fraud, illicit trade, industrial counterfeiting, intellectual property

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 20.01.2003
COM(2003) 20 final

2003/0003 (ACC)

Proposal for a

COUNCIL REGULATION

concerning customs action against goods suspected of infringing certain intellectual
property rights and the measures to be taken against goods found to have infringed such
rights

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. 

INTRODUCTION

On  22  December  1994  the  Council  adopted  Regulation  (EC)  No  3295/94  laying  down  the
conditions for the intervention of the customs authorities and the measures to be taken by the
competent  authorities  with  regard  to  counterfeit  or  pirated  goods.  This  act  implemented
provisions  of  the  World  Trade  Organisation's  Agreement  on  Trade-Related  Aspects  of
Intellectual Property Rights (TRIPs) pursuant to Council Decision 94/800/EC of 22 December
1994  concerning  the  conclusion  on  behalf  of  the  European  Community,  as  regards  matters
within  its  competence,  of  the  agreements  reached  in  the  Uruguay  Round  multilateral
negotiations  (1986-1994).  There  has  since  been  a  steady  escalation  in  such  fraud.  Over  the
four-year  period  1998-2001  customs  administrations  saw  the  number  of  items  infringing  an
intellectual  property  right  they  intercepted  at  the  EU's  external  frontiers  increase  ninefold,
from 10 million to 100 million items.

Both the nature of the products counterfeited and pirated and the methods used by organised
international fraud gangs are evolving constantly. The statistics published by the Commission
in its annual report on the action of the Community customs authorities against counterfeiting
and  pirating  bear  out  this  constant  change  and  highlight  two  broad  trends.  The  first  is  that
counterfeiters  are  now  more  interested  in  quantity  than  quality.  Organised  fraudsters  are  no
longer  targeting  articles  with  high  value  added,  opting  instead  to  produce  a  variety  of
household objects on a commercial scale. The second is the nature of the products concerned.
By  way  of  example,  in  2001  seizures  of  counterfeit  foodstuffs  were  up  almost  75%  on  the
year before, practically equalling clothes, while pirated or counterfeit CDs were up 15 300 %
on 1999.

The increasingly active involvement of organised crime in large-scale international trafficking
in counterfeit and pirated goods attests both to the lucrative nature of such activities and to an
increasing professionalism.

Against this background, it is particularly important to develop legislation aimed at improving
and  harmonising  customs  action  in  tackling  such  intellectual  property  offences  more
effectively. In the interests of legal clarity, making the rules more accessible to right holders
and designing  a  high-performance  legislative instrument to deal  more effectively with  these
kinds  of  fraud,  Regulation  (EC)  No  3295/94  of  22  December  1994  should  be  repealed  and
replaced.

2.  AIM OF THE PROPOSAL FOR A REGULATION

2.1

2.2

This  Regulation  defines  the  conditions  on  which  the  customs  authorities  can  act
when  goods  are  suspected  of  infringing  an  intellectual  property  right  and  the
measures that the competent authorities are to take when goods are found to infringe
an intellectual property right covered by this Regulation. The main objective of this
Regulation  is  to  provide  the  single  market  and  consumers  with  more  effective
protection in a bigger Community.

The particularly sensitive trend in  these  forms  of fraud,  which  are  now  statistically
quantifiable  where  customs  action  is  concerned,  calls  for  a  reform  of  the  law  to
guarantee  consumer  safety  and  protection,  respect  for  holders'  intellectual  property

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2.3

2.4

2.5

rights and the financial interests of the Community in an economic area that is both
competitive  and  open  to  free  competition.  Such  a  reform  should  serve  to  promote
business  innovation  and  competitiveness  and  safeguard  jobs  while  protecting
national economies.

Counterfeiting  and  pirating  are  increasingly  damaging  the  economy,  financial
interests and employment and severely handicap economic operators. The proposed
amendments  will  therefore  step  up  the  fight  against  fraud  at  the  Community's
external  frontiers  throughout  the  customs  territory  without  unnecessarily  impeding
international  trade.  These  objectives  figure  among  those  set  out  in  Decision
No 210/97/EC of the European Parliament and of the Council of 19 December 1996
adopting an action programme for customs in the Community.

This Regulation operates according to the same principles as the previous one: where
goods  are  suspected  of  infringing  an  intellectual  property  right,  the  holder  of  that
right can apply for action to the customs authorities, which will then detain the goods
for a certain period. The Regulation also lays down the measures to be taken by the
competent authorities when the  goods  are found to  infringe  an intellectual property
right.

The  new  draft  does  not  affect  the  basic  principles  of  the  previous  Regulation;  it
simply improves its working and extends its scope to new intellectual property rights.

The new Regulation takes account of the demands of professional organisations, the
interests  of  small  and  medium-sized  industries  and  enterprises  (SMI/SMEs)  and
experience gained from the previous customs  rules.  Implementation has  been made
more  user-friendly.  When  consulted,  right  holders  welcomed  a  number  of  the
proposed improvements. The Regulation proposes a number of measures:

– 

– 

– 

– 

– 

– 

It extends the scope of the Regulation to new intellectual property rights: plant
variety rights, geographical indications and designations of origin.

It  improves  the  quality  of  information  provided  to  customs  by  right  holders
applying  for  action.  It  also  harmonises  the  period  of  validity  and  the  form  of
the  application  for  action  and  encourages  the  lodging  of  applications  by
computer.

If  information  provided  by  customs  to  the  right  holder  is  abused  or  used  for
purposes  other  than  those  laid  down  by  the  Regulation,  the  right  holder's
application  for  action  may  be  suspended  for  the  remainder  of  its  period  of
validity and, in particularly serious cases, it may not be renewed.

The  fees  and  securities  have  been  abolished  to  allow  SMI/SMEs  cost-free
access to the Regulation. The security is now replaced by an undertaking from
the right holder.

The scope of the ex officio (own-initiative) procedure, which allows customs to
act without a prior application for action, has been extended. Its use, especially
in the interests of SMI/SME right holders, will thereby increase considerably.

Right  holders  will  receive  more  detailed  and  frequent  information  from
customs.

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– 

– 

– 

Right holders may be provided with samples for analysis in order to enable the
procedure to continue.

The fact that right holders are not obliged to await the outcome of substantive
legal  proceedings  but  can  have  goods  infringing  certain  intellectual  property
rights  destroyed  with  the  agreement  of  the  person  holding  the  goods  or  the
declarant should, under the new procedure, resolve certain storage problems.

The  article  concerning  non-commercial  traffic  in  goods  within  the  limits  of
duty-free allowances is of particular importance to business. Though this type
of  traffic  was  outside  the  scope  of  the  previous  rules,  the  new  Regulation
should tighten control over small-scale traffic to ensure that it does not conceal
a larger-scale operation.

Successfully tackling counterfeiting and piracy requires close cooperation with right
holders and a substantial increase in the number of applications for action.

To ensure the best possible use of this Regulation, there should be provision for any
amendments and additions necessary to be made in the two years following its entry
into force.

The Council is asked to adopt the proposal for a new Community Regulation laying
down the conditions for action by the customs authorities when goods are suspected
of  infringing  intellectual  property  rights  and  the  measures  to  be  taken  by  the
competent  authorities  when  goods  are  found  to  have  infringed  certain  intellectual
property rights.

2.6

2.7

2.8

3.  ANALYSIS OF THE MAIN ARTICLES

Article 1

This Regulation sets out the conditions on which the customs authorities can act when goods
are suspected of infringing an intellectual property right and the measures to be taken by the
competent authorities when such goods are found to infringe an intellectual property right.

Article 2(1)

The 2001 report by the customs administrations on counterfeiting and piracy shows a major
increase in the counterfeiting of food products, spirits and drinks (up 75% on the year before,
some 4 million items ). Some of these products can be particularly dangerous to consumers.
In view of the experience acquired by customs administrations in tackling counterfeiting and
piracy,  it  therefore  seems  advisable  to  bring  intellectual  property  rights  relating  to  plant
varieties,  designations  of  origin  and  geographical  indications  within  the  scope  of  this
Regulation.

These new types of rights therefore need to be defined for the purposes of this Regulation and
included in the chapter "Goods infringing an intellectual property right". That chapter should
also include Community designs.

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Article 3(1)

This  Regulation  should  not  apply  to  goods  bearing  a  protected  designation  of  origin  or  a
protected  geographical  indication  which,  though  they  are  in  a  situation  covered  by  this
Regulation without the right holder's consent, have been manufactured with the right holder's
consent.

Article 3(2)

Business representatives have always argued for the deletion of this exclusion clause, which
they  see  as  an  unacceptable  "tolerance"  in  that  it  favours  "tourist  trafficking".  This  type  of
trafficking is, however, very difficult to combat by the detention procedure. Annual statistics
on customs action against counterfeiting nevertheless show that passengers account for over
45% of the procedures initiated by customs.

Though  this  clause  excludes  from  the  scope  of  the  Regulation  goods  of  a  non-commercial
nature contained  in  travellers' personal  baggage  within the limits of the duty-free allowance
(€175), it also sends an inappropriate message to travellers.

This type of traffic should be excluded from the scope of this Regulation only if it does not
conceal trafficking on a larger scale.

Article 4

Article 4 lays down the measures to be taken before an application for action is made to the
customs authorities.

This Article recasting the conditions in which the customs authorities can intervene without a
prior application for action should considerably extend the scope for using the own-initiative
procedure.  In  order  to  give  the  customs  authorities  more  scope  for  action  and  to  give
SMI/SMEs  access  to  the  facility,  the  customs  services  may,  when  they  have  sufficient
grounds for suspecting that goods infringe an intellectual property right, detain suspect goods
for  three  working  days.  During  that  period  the  right  holder  may  lodge  an  application  for
action with the competent department.

This  procedure  enables  customs  to  notify  right  holders  who  may  not  realise  that  their
intellectual  property  rights  can  be  infringed,  and  have  therefore  never  before  applied  for
action, that goods suspected of counterfeiting or pirating their rights have been intercepted.

Articles  5,  6  and  7  will  govern  the  lodging  and  processing  of  applications  for  customs
action:

Article 5

The  application  for  action,  which  is  crucial  to  optimising  customs  action  in  that  it  provides
particulars  and  a  technical  description  of  the  potentially  pirated  or  counterfeited  products
against  which  customs  administrations  are  being  asked  to  act,  may  be  lodged  with  the
appointed authorities by computer.

Some particulars will be mandatory for the acceptance and registration of the application. A
sufficiently  detailed  technical  description  of  the  goods,  detailed  particulars  of  the  type  of
fraud, if known, the name and address of the contact person appointed by the right holder and

5

the document showing that the applicant holds the  right for the  goods concerned  will  all  be
required when applying for action. Other details likely to help the customs authorities in their
search may be sent by way of information.

The customs department responsible for registering applications will have 30 working days in
which to notify the applicant in writing of its decision.

The  highly  specialised  nature  of  certain  intellectual  property  rights,  such  as  plant  variety
rights,  may  entitle  the  competent  customs  department  grounds  to  demand  specific
information.

Article 6

The guarantee necessary under Regulation (EC) No 3295/94, which in some Member States
required  the  right  holder  to  deposit  a  sum  of  money,  is  abolished.  Instead  right  holders
applying  for  action  will  provide  a  written  undertaking  covering  their  liability  and
guaranteeing payment of all costs arising from keeping the goods under customs control.

Article 8

This Article sets out the principles governing the acceptance of the application for action. The
application form will be harmonised and its period of validity fixed at no more than one year.
Applications will be renewable annually.

Article 9

This Article sets out the conditions for customs action and provides for  customs  to suspend
the release of suspected counterfeit or pirated goods or to detain them.

It  allows  the  right  holder  to  be  sent  additional  vital  information,  including  the  actual  or
supposed  nature  of  the  suspect  goods  and  the  actual  or  supposed  quantity  of  goods  seized.
Such information may be sent in all cases and without any prior obligation. At the same time,
and  pursuant  to  national  legal  provisions  for  establishing  whether  an  intellectual  property
right  has  been  infringed,  right  holders  may  be  sent  such  information  as  the  origin  or
provenance of suspect products.

To facilitate analysis of suspect products, a representative sample of the goods may  now  be
provided on certain conditions. It must be restored before the release of the goods or the end
of the detention procedure.

Article 11

To  facilitate  access  to  customs  rules  for  SMI/SME  right  holders  and  to  deprive  those
concerned  effectively  of  the  economic  gains  of  trade  in  counterfeit  and  pirated  goods,  a
simplified  procedure  has  been  introduced  whereby  goods  can  be  destroyed  at  the  right
holder's request and under his responsibility where the customs authorities receive, within ten
working  days,  written  permission  from  the  declarant  or  holder  of  the  goods  to  destroy  the
goods.

This  simplified  procedure  should  resolve  the  problems  of  storage  and  the  associated  costs.
Whereas, in the  past, legal proceedings  to  obtain  a  substantive decision  from the  competent
authorities were all too often abandoned because neither the consignor nor the consignee were
on  Community  territory,  it  will  now  be  possible  to  destroy  goods  infringing  certain

6

intellectual property rights in transit or transhipped on the Community customs territory. This
procedure is not an alternative to that laid down in Article 13 of this Regulation, but it does
allow  fraudulent  goods  to  be  taken  off  the  market  in  certain  circumstances.  Should  the
declarant or holder of the goods object, the procedure laid down in Article 13 will apply.

Article 12

Though right holders now receive a considerable amount of new information, they cannot use
it for purposes other than those laid down in Articles 8 and 10 of the Regulation. In the event
of abuse, right holders could incur civil liability and see their application for action suspended
for the remainder of its period of validity or, in particularly serious cases, not have it renewed.

Article 13

In  order  to  secure  and  uphold  the  rights  of  all  parties  under  the  Regulation,  the  customs
authorities will release goods if they are not notified within ten working days that proceedings
have been initiated to establish whether an intellectual property right has been infringed.

The  perishable  nature  of  certain  products  covered  by  intellectual  property  rights  within  the
scope of this Regulation, for instance plant variety rights or geographical indications, requires
detention or suspension of release to be limited to three working days.

Certain goods covered by specific intellectual property rights may be released on the lodging
of a security and subject to certain conditions.

Article 14

Article 14 takes over the wording of Article 7(2) of Regulation (EC) No 3295/94.

Article 15

Storage conditions during detention or suspension of release are determined by each Member
State.

Article 16

In order to give the customs authorities more scope for action, it is important that they be able
to  use  the  provisions  of  the  Regulation  when  goods  are  leaving  the  Community  customs
territory.

Article 17

Goods found to infringe an intellectual property right are normally to be destroyed, but they
may also be forfeited to the Exchequer.

Article 18

This Article sets out the liability of the customs authorities and the right holder.

Article 19

This  Article  provides  for  the  competent  authorities  to  apply  effective,  proportionate  and
dissuasive penalties.

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Article 23

The Commission will report annually to Parliament and the Council on the application of this
Regulation.

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2003/0003 (ACC)

Proposal for a

COUNCIL REGULATION

concerning customs action against goods suspected of infringing certain intellectual
property rights and the measures to be taken against goods found to have infringed such
rights

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article
133 thereof,

Having regard to the proposal from the Commission,1

Having regard to the opinion of the European Parliament,2

Having regard to the opinion of the European Economic and Social Committee,3

Whereas:

(1) 

(2) 

(3) 

To  improve  the  working  of  the  system  introduced  by  Council  Regulation  (EC)
No 3295/94 of 22 December 1994 laying down measures concerning the entry into the
Community  and  the  export  and  re-export  from  the  Community  of  goods  infringing
(EC)
certain 
No 241/1999,5 conclusions should be drawn from experience of its application. In the
interests of clarity, the Regulation should be replaced.

last  amended  by  Regulation 

intellectual  property 

rights,4  as 

The  marketing  of  counterfeit  and  pirated  goods,  and  indeed  all  goods  infringing
intellectual  property  rights,  does  considerable  damage  to  law-abiding  manufacturers
and traders and to right holders as well as deceiving, and in some cases endangering
the  health  and  safety  of,  consumers.  Such  goods  should,  in  so  far  as  is  possible,  be
kept  off  the  market  and  measures  adopted  to  deal  effectively  with  this  unlawful
activity  without  impeding  the  freedom  of  legitimate  traders.  This  objective  is
consistent with efforts under way at international level.

In so far as counterfeit goods, pirated goods and, more generally, goods infringing an
intellectual property right originate in or come from third countries, their introduction
into  the  Community  customs  territory,  including  their  transhipment,  release  for  free
circulation in the Community, placing under a suspensive procedure and placing in a

1

2

3

4

5

OJ C
OJ C
OJ C
OJ L 341, 30.12.1994, p. 8.
OJ L 27, 2.2.1999, p. 2.

9

                                                
(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

free  zone  or  warehouse,  should  be  prohibited  and  a  procedure  set  up  to  enable  the
customs authorities to enforce this prohibition as effectively as possible.

The customs authorities should also be  able to take  action against  counterfeit  goods,
pirated  goods  and  goods  infringing  certain  intellectual  property  rights  which  are
exported, re-exported or leave the Community customs territory.

Action  by  the  customs  authorities  should  involve,  for  the  period  necessary  to
determine whether suspect goods are indeed counterfeit goods, pirated goods or goods
infringing  certain  intellectual  property  rights,  suspending  release  for  free  circulation,
export  and  re-export  or,  in  the  case  of  goods  placed  under  a  suspensive  procedure,
placed  in  a  free  zone  or  a  free  warehouse,  re-exported  with  notification,  introduced
into the customs territory or leaving that territory, detaining goods.

The  particulars of  the  application  for  action,  such  as  its  period  of  validity  and  form,
need  to  be  defined  and  harmonised  in  all  Member  States.  The  same  applies  to  the
conditions governing the acceptance of applications by the customs authorities at the
offices designated to receive, process and register them.

Even where no application has yet been lodged or approved, the Member States should
be authorised to detain the goods for a certain period to allow right holders to lodge an
application for action with the customs authorities.

Proceedings  initiated  to  determine  whether  an  intellectual  property  right  has  been
infringed  under  national  law  will  be  conducted  with  reference  to  the  criteria  used  to
establish whether goods produced in that Member State infringe intellectual property
rights.  This  Regulation  does  not  affect  the  Member  States'  provisions  on  the
competence of the courts or judicial procedures.

To make the Regulation easier to apply for customs administrations and right holders
alike, provision should also be made, where those holding or declaring the goods make
no  objections  and  give  their  written  consent,  for  a  more  flexible  procedure  allowing
goods  infringing  certain  intellectual  property  rights  to  be  destroyed  on  the  right
holder's request and sole responsibility, without there being any obligation to initiate
proceedings  to  establish  whether  an  intellectual  property  right  has  been  infringed
under national law.

(10) 

It is necessary to lay down the measures applicable to goods that have been found to
be  counterfeit,  pirated  or  generally  to  infringe  certain  intellectual  property  rights.
Those measures should not only deprive those responsible for trading in such goods of
the  economic  benefits  of  the  transaction  and  penalise  them  but  also  constitute  an
effective deterrent to further transactions of the same kind.

(11)  To  avoid  disrupting  the  clearance  of  goods  carried  in  travellers'  personal  baggage,
goods  that  may  be  counterfeit,  pirated  or  infringe  certain  intellectual  property  rights
should,  where  there  is  nothing  to  suggest  trafficking  on  a  larger  scale,  be  excluded
from the scope of this Regulation when imported from third countries within the limits
of the duty-free allowance accorded by Community rules or when exported.

(12) 

In the interests of the Regulation's effectiveness, it is important to ensure the uniform
application  of  the  common  rules  it  lays  down  and  to  reinforce  mutual  assistance
between the Member States and between the Member States and the Commission, in

10

particular  by  recourse  to  Council  Regulation  (EC)  No  515/97  of  13  March  1997  on
mutual  assistance  between  the  administrative  authorities  of  the  Member  States  and
cooperation between the latter and the Commission to ensure the correct application of
the law on customs or agricultural matters.6

(13) 

In  the  light,  inter  alia,  of  the  experience  gained  in  the  implementation  of  this
Regulation, consideration will be given to the possibility of increasing the number of
intellectual property rights covered.

(14)  The measures necessary for the implementation of this Regulation should be adopted
in accordance with Council Decision 1999/468/EC of 28  June 1999  laying  down the
procedures for the exercise of implementing powers conferred on the Commission.7

(15)  Regulation (EC) No 3295/94 should be repealed,

HAS ADOPTED THIS REGULATION:

CHAPTER I

Subject matter and scope

Article 1

1.

This  Regulation  sets  out  the  conditions  for  action  by  the  customs  authorities  when
goods  are  suspected  of  infringing  an  intellectual  property  right  in  the  following
situations:

(a) when  they  are  entered  for  release  for  free  circulation,  export  or  re-export  in

accordance with Article 61 of Council Regulation (EC) No 2913/92;8

(b) when  they  are  found  during  checks  on  goods  entering  or  leaving  the
Community  customs  territory  in  accordance  with  Articles  37  and  183  of
Regulation (EEC) No 2913/92, placed under a suspensive procedure within the
meaning  of  Article  84(1)(a)  of  that  Regulation,  re-exported  subject  to
notification under Article 182(2) of that Regulation or placed in a free zone or
free warehouse within the meaning of Article 166 of that Regulation.

This Regulation fixes the measures to be taken by the competent authorities when the
goods referred to in paragraph 1 are found to infringe intellectual property rights.

Article 2

For the purposes of this Regulation, "goods infringing an intellectual property right"
means:

(a)

"counterfeit goods", namely:

OJ L 82, 22.3.1997, p. 1.
OJ L 184, 17.7.1999, p. 23.
OJ L 302, 19.10.1992, p. 1.

11

2.

1.

6

7

8

                                                
(i)

goods,  including  packaging,  bearing  without  authorisation  a  trademark
identical to the trademark duly registered in respect of the same type of
goods, or which cannot be distinguished in its essential aspects from such
a  trademark,  and  which  thereby  infringes  the  trademark  holder's  rights
under Community  law, as provided for  by Council  Regulation (EC)  No
40/949 (Community trademark) or the law of the Member State in which
the application for action by the customs authorities is made;

(ii)

any trademark symbol (logo, label, sticker, brochure, instructions for use
or  guarantee  document),  even  if  presented  separately,  on  the  same
conditions as the goods referred to in point (i);

(iii) packaging  materials  bearing  the  trademarks  of  counterfeit  goods,
presented separately, on the same conditions as the goods  referred to in
point (i);

(b)

"pirated  goods", namely goods which are or  contain copies  made  without  the
consent of the holder of a copyright or related right or design right, regardless
of whether it is registered in national law, or of a person authorised by the right
holder in the country of production in cases where the making of those copies
would constitute an infringement of that right under Council Regulation (EC)
No 6/200210 (Community designs) or the law of the Member State in which the
application for customs action is made;

(c)

goods which, in the Member State in which the application for customs action
is made, infringe:

(i)

a patent under that Member State's law;

(ii)

a supplementary protection certificate of the kind provided for in Council
Regulation  (EEC)  No  1768/9211  or  Regulation  (EC)  No  1610/96  of  the
European Parliament and of the Council;12

(iii) a  national  plant  variety  right  under  the  law  of  that  Member  State  or  a
Community  plant  variety  right  of  the  kind  provided  for  in  Council
Regulation (EEC) No 2100/94;13

(iv) designations  of  origin  or  geographical  indications  under  the  law  of  that
  and  (EC)

Member  State  or  Council  Regulations  (EEC)  No 2081/9214
No 1493/1999;15

(v)

geographical designations of the kind provided for in Council Regulation
(EEC) No 1576/89.16

9

10

11

12

13

14

15

16

OJ L 11, 14.01.1994, p. 1.
OJ L 3, 5.1.2002, p. 1.
OJ L 182, 2.7.1992, p. 1.
OJ L 198, 8.8.1996, p. 30.
OJ L 227, 1.9.1994, p. 1.
OJ L 208, 24.7.1992, p. 1.
OJ L 179, 14.7.1999, p. 1.
OJ L 160, 12.6.1989, p. 1.

12

                                                
2.

3.

1.

2.

1.

2.

For the purposes of this Regulation, "right holder" means the holder of a trademark,
design right, patent, certificate, plant variety right, protected geographical indication,
protected  designation  of  origin  and,  more  generally,  any  right  referred  to  in
paragraph 1,  any  other  person  authorised  to  use  that  trademark,  patent,  certificate,
plant variety right, protected geographical indication, protected designation of origin
or right or a representative of the right holder or authorised user.

Any mould or matrix which is specifically designed or adapted for the manufacture
of  goods  infringing  an  intellectual  property  right  shall  be  treated  as  goods  of  that
kind  if  the  use  of  such  moulds  or  matrices  infringes  the  right  holder's  rights  under
Community law or the law of the Member State in which the application for action
by the customs authorities is made.

Article 3

This Regulation shall apply neither to goods bearing a trademark with the consent of
the holder of that trademark nor to goods bearing a protected designation of origin or
a protected geographical indication which have been manufactured with the consent
of the right holder but are placed in one of the situations referred to  in Article 1(1)
without the latter's consent.

Nor shall this Regulation apply to goods referred to in the first subparagraph which
are manufactured, bear a trademark or are protected by a patent, certificate, copyright
or  related  right,  design  right,  plant  variety  right,  protected  designation  of  origin  or
geographical indication in conditions other than those agreed with the right holder.

Where  a  traveller's  personal  baggage  contains  goods  of  a  non-commercial  nature
within  the  limits  of  the  duty-free  allowance  and  there  is  no  particular  reason  to
suppose such goods to be part of a larger-scale traffic, the customs authorities shall
consider such goods to be outside the scope of this Regulation.

CHAPTER II

Applications for action by the customs authorities

SECTION 1

Measures prior to an application for action by the customs authorities

Article 4

Where  the  customs  authorities,  in  the  course  of  action  in  one  of  the  situations
referred to in Article 1(1) and before an application has been lodged by a right holder
or granted, have sufficient grounds for suspecting that goods infringe an intellectual
property right, they may, after the time necessary for the check, suspend the release
of the goods or detain them for a period of three working days from the moment of
notification of the right  holder and  of  the  declarant  or  right  holder,  if  the  latter  are
known.

Within that period the right holder may lodge an application for customs action with
the competent customs department.

13

3.

1.

2.

3.

4.

5.

In  accordance  with  the  rules  in  force  in  the  Member  State  concerned,  the  customs
authorities may, without divulging any information other than the actual or supposed
number of items and before informing the right holder of the possible infringement,
ask the right holder to provide them with any information they may need to confirm
their suspicions.

SECTION 2

The lodging and processing of applications for customs action

Article 5

In  each  Member  State  a  right  holder  may  apply  in  writing  to  the  competent
department  of  the  customs  authorities  for  action  by  the  customs  authorities  when
goods  are  found  in  one  of  the  situations  referred  to  in  Article  1(1)  (application  for
action).

Each Member State shall designate the customs department competent to receive and
process applications for action.

Where electronic data interchange systems exist, the Member States shall encourage
right holders to lodge applications by computer.

Where the applicant is the holder of a Community trademark, a Community design, a
Community plant variety right or a designation of origin or geographical indication
protected by the Community, an application may, in addition to requesting action by
the customs authorities of the Member State in which it is lodged, request action by
the customs authorities of one or more other Member States.

The  application  for  action  shall  be  made  out  on  a  form  established  in  accordance
with  the  procedure  referred  to  in  Article  21(2);  it  must  contain  all  the  information
needed  to  make  the  goods  in  question  readily  recognisable  by  the  customs
authorities, and in particular:

(a)

an accurate and detailed technical description of the goods;

(b)

any  specific  information  the  right  holder  may  have  concerning  the  type  or
pattern of fraud;

(c)

the name and address of the contact person appointed by the right holder.

The application for action must also contain the undertaking required of the applicant
by Article 6 and proof that the applicant holds the right for the goods in question.

In the situation described in paragraph 4 the application for action shall indicate the
Member State or States in which customs action is requested.

Right holders or their representatives must forward any other information they may
have, such as:

(a)

the pre-tax value of the original goods on the legitimate market in the country
in which the application for action is lodged;

14

(b)

the location of the goods or their intended destination;

(c)

particulars identifying the consignment or packages;

(d)

the scheduled arrival or departure date of the goods;

(e)

the means of transport used;

(f)

the identity of the importer, exporter or holder;

(g)

the country or countries of production and the routes used by traffickers;

(h)

the technical differences, if known, between the authentic goods and the others.

Details may be required which are specific to the type of intellectual property right
concerned by the application for action.

On  receiving  an  application  for  action,  the  competent  customs  department  shall
process that application and notify the applicant in writing of its decision within 30
working days.

The  right  holder  shall  not  be  charged  a  fee  to  cover  the  administrative  costs
occasioned by the processing of the application.

Where the application is not sufficiently detailed or does not contain the mandatory
information listed in paragraph 5, the competent customs department may refuse the
application  for  action  by  means  of  a  reasoned  decision.  An  appeal  may  be  lodged
against this refusal.

Article 6

The  Member  States  shall  require  applications  for  action  to  be  accompanied  by  an
undertaking from the right holder or his representative assuming liability towards the
persons involved in a situation referred to in Article 1(1) in the event that a procedure
initiated pursuant to Article 9(1) is discontinued owing to an act or omission by the
right holder or in the event that the goods in question are subsequently found not to
infringe an intellectual property right.

In  that  undertaking  the  right  holder  shall  also  undertake  to  pay  all  costs  incurred
under this Regulation by keeping goods under customs control pursuant to Article 9,
including  costs  occasioned  by  the  destruction  of  goods  infringing  an  intellectual
property right under the second indent of Article 11(1) and Article 17(1)(a).

Where  an  application  is  submitted  under  Article  5(4),  the  undertaking  shall  cover
translation costs and be given in every Member State in which the decision granting
the application applies.

6.

7.

8.

1.

2.

Articles 5 and 6 shall apply mutatis mutandis to requests for an extension.

Article 7

15

SECTION 3

Acceptance of the application for action

Article 8

1.

2.

When  granting  an  application  for  action,  the  competent  customs  department  shall
specify  the  period  during  which  the  customs  authorities  are  to  take  action.  That
period shall not exceed one year. Subject to the prior discharge of any debt owed by
the right holder under this Regulation, the department which took the initial decision
may, at the right holder's request, renew that period each year.

The  right  holder  shall  notify  the  competent  customs  department  and,  where
appropriate, the department or departments referred to in the second subparagraph of
paragraph 2, if his right ceases to be validly registered or expires.

The decision  granting  the  right  holder's  application  for  action  shall  immediately  be
forwarded  to  those  customs  offices  of  the  Member  State  or  States  likely  to  be
concerned by the goods alleged in the application to infringe an intellectual property
right.

When an application for action submitted in accordance with Article 5(4) is granted,
the period during which the customs authorities are to take action shall be set at one
year;  that  period  shall  be  renewable  annually,  on  the  right  holder's  written
application,  by  the  department  which  processed  the  initial  application.  The  first
indent of Article 250 of Regulation (EEC) No 2913/92 shall apply mutatis mutandis
to the decision granting that application and to decisions extending or repealing it.

Where  an  application  for  action  is  granted,  it  is  for  the  applicant  to  forward  that
decision, with any other information and any translations that may be necessary, to
the  competent  customs  department  of  the  Member  State  or  States  in  which  the
applicant  has  requested  customs  action.  However,  with  the  applicant's  consent,  the
decision may be forwarded directly by the customs department which has taken the
decision.

At  the  request  of  the  customs  authorities  of  the  Member  States  concerned,  the
applicant shall provide any additional information necessary for the implementation
of the decision.

3.

The period referred to in the second subparagraph of paragraph 2 shall run from the
date of adoption of the decision granting the application. The decision will not enter
into  force  in  the  recipient  Member  State  or  States  until  it  has  been  forwarded  in
accordance  with  the  third  subparagraph  of  paragraph  2  and  the  right  holder  or  his
representative has given the undertakings referred to in Article 6.

The decision shall then be sent immediately to the national customs offices likely to
have to deal with the goods suspected of infringing intellectual property rights.

This  paragraph  shall  apply  mutatis  mutandis  to  a  decision  extending  the  initial
decision.

16

CHAPTER IV

Conditions governing action by the customs authorities and by the authority competent
to decide on the case

1.

2.

3.

Article 9

Where a customs office to which the decision granting an application by the holder
of a right has been forwarded pursuant to Article 8 is satisfied,  after  consulting  the
applicant where necessary, that  goods in  one of  the situations referred to in Article
1(1)  are  goods  infringing  an  intellectual  property  right  covered  by  that  decision,  it
shall suspend release of the goods or detain them.

The  customs  office  shall  immediately  inform  the  competent  customs  department
which processed the application.

The competent customs department or customs office referred to in paragraph 1 shall
immediately inform the right holder and the declarant or holder of the goods within
the  meaning  of  Article  38  of  Regulation  (EEC)  No  2913/92  of  its  action  and  is
authorised  to  inform  them  of  the  actual  or  estimated  quantity  and  the  actual  or
supposed nature of the goods whose release has been suspended or which have been
detained,  without  being  bound  by  the  communication  of  that  information  to  notify
the authority competent to take a substantive decision.

With a view to establishing whether an intellectual property right has been infringed
under national law,  and in accordance with national provisions on the protection of
personal data, commercial and industrial secrecy and professional and administrative
confidentiality,  the  customs  office  or  department  which  processed  the  application
shall inform the right holder, at his request and if known, of the names and addresses
of  the  consignee,  the  consignor,  the  declarant  or  holder  and  the  origin  and
provenance of goods infringing an intellectual property right.

The  customs  office  shall  give  the  applicant  and  the  persons  involved  in  any  of  the
situations referred to in Article 1(1) the opportunity to inspect goods whose release
has been suspended or which have been detained.

When examining goods, the customs office may take samples and, according to the
rules in force  in the  Member  State  concerned,  hand  them  over  or  send  them  to  the
right holder or his representative, at their express request, strictly for the purposes of
analysis and to facilitate the subsequent procedure. These samples must be returned
on  completion  of  the  technical  analysis  and,  where  applicable,  before  goods  are
released or their detention ends.

Article 10

The law in force in the Member State within the territory of which the goods are placed in one
of the situations referred to in Article 1(1) shall apply when deciding whether an intellectual
property right has been infringed under national law.

17

That law  shall also apply to  the immediate  notification  of  the  customs  department  or  office
referred  to  in  Article 9(1)  that  the  procedure  provided  for  in  Article  13  has  been  initiated,
unless the procedure was initiated by that department or office.

Article 11

1.

Where goods infringing an intellectual property right have been the object of action
by the customs authorities in one of the situations covered by Article 16, the Member
States  shall  provide  for  those  authorities,  at  the  right  holder's  request,  to  have
detained  goods  automatically  destroyed  under  customs  control,  without  there  being
any need to determine whether an intellectual property right has been infringed under
national law, on the following conditions:

– 

– 

The  right  holder  must  inform  the  department  in  writing  within  ten  working
days of notification that the goods concerned by the procedure provided for in
Article 9  infringe  an  intellectual  property  right  and  provide  the  customs
authorities with the written agreement of the declarant or the holder forfeiting
the  goods  to  the  Exchequer.  This  period  may  be  extended  by  a  further  ten
working days where circumstances warrant it.

Destruction must be carried out at the expense and under the responsibility of
the  right  holder  and  be  systematically  preceded  by  the  taking  of  samples  for
keeping  by  the  customs  authorities  in  such  conditions  that  they  constitute
evidence  admissible  in  legal  proceedings  in  the  Member  State  in  which  they
might  be  needed.  The  customs  authorities  may  not  be  held  liable  for  any
damages resulting from the destruction.

2.

In all other cases, for example where the holder or declarant objects to or contests the
destruction of the goods, the procedure laid down in Article 13 shall apply.

Article 12

A right holder receiving the particulars cited in the first subparagraph of Article 9(3) may use
that information only for the purposes specified in Articles 10, 11 and 13(1).

Any other use, such as an out-of-court settlement, may, on the basis of the law of the Member
State in which the goods in question are located, cause the right holder to incur civil liability
and  lead  to  the  suspension  of  the  application  for  action,  for  period  of  validity  remaining
before renewal, in that Member State in which the events have taken place.

In  the  event  of  a  second  or  particularly  serious  breach  of  this  rule,  the  competent  customs
department  may  refuse  to  renew  the  application.  In  the  case  of  an  application  of  the  kind
provided for in Article 5(4), it must also notify the Member States indicated on the form.

Article 13

1.

If, within ten working days of notification of suspension of release or detention, the
customs office referred to in Article 9(1) has neither been notified that proceedings
have  been  initiated  to  determine  whether  an  intellectual  property  right  has  been
infringed  under  national  law  in  accordance  with  Article  10  nor  received  the  right

18

2.

1.

holder's written request for the seizure and destruction of the goods provided for in
Article 11, release shall be granted, subject to completion of all customs formalities,
and the detention order shall be lifted.

This  period  may  be  extended  by  a  maximum  of  ten  working  days  in  appropriate
cases.

In  the  case  of  perishable  goods  suspected  of  infringing  a  plant  variety  right,
geographical  indication  or  protected  designation  of  origin,  the  period  referred  to  in
paragraph 1 shall be three working days. That period may not be extended.

Article 14

In the case of goods suspected of infringing patents, certificates, plant variety rights
or design rights, the owner, importer, holder or consignee of the goods shall be able
to  obtain  the  release  of  the  goods  or  an  end  to  their  detention  on  provision  of  a
security, provided that:

(a)

the customs office or department referred to in Article 9(1) has been notified,
in accordance with Article 13(1), that a procedure has been initiated within the
period  provided  for  in  Article 13(1)  to  establish  whether  an  intellectual
property right has been infringed under national law;

(b)

the  authority  empowered  for  this  purpose  has  not  authorised  precautionary
measures before the expiry of the time limit laid down in Article 13(1);

(c)

all customs formalities have been completed.

2.

The security provided for in paragraph 1 must be sufficient to protect the interests of
the right holder.

Payment of the security shall not affect the other legal remedies available to the right
holder.

Where  the  procedure  to  determine  whether  an  intellectual  property  right  has  been
infringed  under  national  law  has  been  initiated  other  than  on  the  initiative  of  the
holder of the patent, certificate, design right, plant variety right, designation of origin
or  geographical  indication,  the  security  shall  be  released  if  that  person  does  not
exercise his right to institute legal proceedings within 20 working days of the date on
which he is notified of the suspension of release or detention.

Where the second subparagraph of Article 13(1) applies, this period may be extended
to a maximum of 30 working days.

Article 15

The conditions of storage of the goods during the period of suspension of release or detention
shall be determined by each Member State but may in no circumstances give rise to costs for
the customs administrations.

19

CHAPTER IV

Provisions applicable to goods found to infringe an intellectual property right

Goods found to infringe an intellectual property right at the end of the procedure provided for
in Article 9 shall not be:

Article 16

– 

– 

– 

– 

– 

– 

– 

introduced into the Community customs territory,

released for free circulation,

taken out of the Community customs territory,

exported,

re-exported,

placed under a suspensive procedure or

placed in a free zone or free warehouse.

Article 17

1.

Without  prejudice  to  the  other  legal  remedies  open  to  the  right  holder,  Member
States shall adopt the measures necessary to allow the competent authorities:

(a)

in  accordance  with  the  relevant  provisions  of  national  law,  to  destroy  goods
found  to  infringe  an  intellectual  property  right  or  dispose  of  them  outside
commercial  channels  in  such  a  way  as  to  preclude  injury  to  the  right  holder,
without compensation of any sort and at no cost to the Exchequer;

(b)

to take, in respect of such goods, any other measures effectively depriving the
persons concerned of any economic gains from the transaction.

Save in exceptional cases, simply removing the trademarks which have been affixed
to  the  counterfeit  goods  without  authorisation  shall  not  be  regarded  as  effectively
depriving the persons concerned of any economic gains from the transaction.

2.

Goods  found  to  infringe  an  intellectual  property  right  may  be  forfeited  to  the
Exchequer. In that event, paragraph 1(a) shall apply.

CHAPTER V

Liability of the customs authorities and the right holder

Article 18

1.

Save as provided by the law of the Member State in which an application is lodged
or, in the case of an application under Article 5(4), by the law of the Member State in

20

which goods infringing an intellectual property right escape detection by a customs
office,  the  acceptance  of  an  application  shall  not  entitle  the  right  holder  to
compensation in the event that such goods escape the supervision of a customs office
and are released or no action is taken to detain them in accordance with Article 9(1).

2.

3.

Save  where  otherwise  provided  by  the  law  of  the  Member  State  in  which  the
application is made or, in the case of an application under Article 5(4), by the law of
the Member State in which the damages are incurred, customs offices or other duly
empowered  authorities  exercising  the  powers  conferred  on  them  to  take  action
against goods infringing an intellectual property right shall only be liable to persons
involved  in  the  situations  referred  to  in  Article  1(1)  or  affected  by  the  measures
provided  for  in  Article  4  for  damages  caused  by  the  action  of  such  offices  or
authorities.

A right holder's civil liability shall be  governed  by the  law  of  the  Member  State in
which  the  goods  in  question  were  placed  in  one  of  the  situations  referred  to  in
Article 1(1).

CHAPTER VI

Final provisions

Article 19

Each  Member  State  shall  introduce  penalties  to  apply  in  the  event  of  infringements  of
Article 17. Such penalties must be effective, proportionate and dissuasive.

The measures necessary for the application of this Regulation shall be adopted in accordance
with the procedure referred to in Article 21(2).

Article 20

Article 21

1.

2.

The Commission shall be assisted by the Customs Code Committee.

Where  reference  is  made  to  this  paragraph,  Articles  4  and  7  of  Decision
1999/468/EC shall apply.

The period laid down in Article 4(3) of Decision 1999/468/EC shall be  set at three
months.

Article 22

Member  States  shall  communicate  all  relevant  information  on  the  application  of  this
Regulation to the Commission.

The Commission shall forward this information to the other Member States.

The provisions of Regulation (EC) No 515/97 shall apply mutatis mutandis.

21

The details of the information procedure shall be drawn up under the implementing provisions
in accordance with the procedure referred to in Article 21(2).

On the basis of the information referred to in Article 22, the Commission shall report annually
to the European Parliament and the Council on the application of this Regulation.

Article 23

Regulation (EEC) No 3295/94 is repealed with effect from ...

Article 24

References to the repealed Regulation shall be construed as references to this Regulation.

Article 25

This  Regulation  shall  enter  into  force  on  the  seventh  day  following  its  publication  in  the
Official Journal of the European Communities.

It shall apply with effect from ...

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, […]

For the Council
The President

22