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Customs authority mulls next move after failed IP talks

This article was originally published in Scrip

Executive Summary

The World Customs Organization (WCO) has decided to put the issue of intellectual property (IP) rights enforcement by customs bodies on hold until June as a number of countries complained that the proposals (called SECURE) could extend global IP rules.

The decision is of importance as this month Brazil and India raised concerns with the World Trade Organization over the detention in December of a consignment of losartan by Dutch customs authorities, which was in transit from India to Brazil.

The case has raised criticisms that it could affect the legitimate trade of Indian-made generics and therefore affect developing countries' access to medicines under the Doha Declaration on public health. It was a right-holder that had informed the Dutch authorities of the container, which allegedly held counterfeit products.

A customs officer inspecting counterfeits. Copyright French Customs ; Mark Bonodot.

Some commentators have blamed only the pharmaceutical industry. "Big pharma masterminded the expanded and illegitimate activities of customs authorities and it hardwired its impunity to make frivolous claims," claims Professor Brook Baker, an advocate for the US AIDS and human rights activist body, Health GAP, and professor at Northeastern University School of Law in Boston.

He claims that the pharmaceutical industry and its "rich country abettors" are intent on expanding extra-territorial IP enforcement rules through negotiations at the World Health Organization (via IMPACT) and the WCO (through SECURE).

"Many of these efforts are under the ruse of stopping 'counterfeits', but their true purpose is to increase [big pharma's] monopoly pricing power by frustrating lawful generic competition," Professor Baker said.

SECURE

The WCO set up a working group in 2007 to create SECURE (Standards Employed by Customs for Uniform Rights Enforcement), a list of standards to aid customs bodies on enforcement in relation to infringement of IP rights, following a request from a number of its members. Counterfeiting is big business, with some estimates saying it makes up 2% of world trade ($200 billion), with the bulk of counterfeits originating in China.

However, in October, a number of countries, including Argentina, Brazil, China, Cuba, Ecuador and Uruguay, conveyed concerns that the standards listed in SECURE could result in the widening of the obligations that the World Trade Organization's IP rules (ie, TRIPS) imposes.

"Because of this perception, the SECURE working group had reached an impasse in its work. The SECURE working group met four times, but was not making any progress as consensus could not be reached on this core issue," the WCO told Scrip.

Therefore the WCO's policy commission decided in December that the SECURE working group would not meet again until a decision was made on the way forward by the WCO council at its June meeting, it added.

The WCO's secretariat will prepare draft terms of reference for "a new WCO body to deal with customs IPR issues", which will then be presented at the meeting.

standards

The SECURE standards included a clause that said customs authorities should have the legal authority to enforce IPR laws whenever goods are under customs supervision, including import, export, transit, in warehouses, during transhipment, in free zones, in free ports, during postal shipments and ordered via the internet.

SECURE also said that national authorities should have a clear legal mandate to control goods that could infringe IPR in accordance with relevant international agreements. Another standard said that with requests from right-holders for customs intervention, there should be an attempt to harmonise the format and reduce the costs of such requests.

The WCO, however, stressed that the SECURE standards were voluntary for its 174 members.

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