Eurobsit: Which countries are the heaviest sources of counterfeited goods to Ukraine?
Antonina Pakharenko-Anderson: “For the time being a significant amount of goods are coming from the countries known as the main sources of counterfeits, namely China, Hong Kong, Turkey (according to the data for 2014-2017 reported by the Ukrainian customs officials at the specialized events).”
E.: Which goods are the most counterfeited?
A. P.-A.: “Almost all consumer goods are being subject to counterfeiting. There is a share of counterfeits in any product range, they are proliferating across all industries and types of IP rights. The goods which are currently being counterfeited (involving the unlawful use of famous global brands) include food products, medicines, alcohol, cigarettes, cosmetics and perfumery, equipment, spare parts for cars, toys, tools, personal care products, household chemicals, gardening products, fertilizers, medicines, gadgets (electronic devices), agricultural machinery, footwear, seeds, nuts, clothes, shoes, various accessories. “
E.: Who are the main actors of sending counterfeited goods to Ukraine?
A. P.-A.: “The main actors of sending counterfeited goods in Ukraine are generally divided into three categories: the international postal consignments and expedited delivery of counterfeit goods ordered by the Ukrainian citizens at online platforms based abroad, the foreign goods imported without customs control (via contraband) by sea, air or land and sold to individuals in the Ukrainian markets, via online stores and e-commerce platforms; and finally the domestic goods produced by small and medium businesses with unlawful use of famous brands and sold by individuals at the local markets in Ukraine, through online stores and e-commerce platforms.”
E.: What actions should Ukrainian authorities take to handle this issue?
A. P.-A.: “Among the top priorities, we would like to emphasize on the necessity to address the following issues:
- Taking measures to prevent the sale on the domestic market of foreign goods imported without customs control;
- Establishing a reliable system of customs post-audit (documentary verification after bringing of imported goods into commerce on the domestic market);
- Implementation of the principle of inevitability of punishment for offenses committed in the field of customs surveillance;
- Amending Article 229 of the Criminal Code of Ukraine “Illegal use of the mark for goods and services, trade name, qualified indication of the origin of goods” by re-introducing the punishment (existing before November 2011) in the form of corrective labor and imprisonment in accordance with the provisions of Art. 16 of TRIPS and Articles 158, 230 of the EU-Ukraine Association Agreement;
- Amending the sanctions provided by Art. 176 “Infringement of copyright and related rights”, Art. 177 “Infringement of rights to invention, utility model, industrial design, topography of integrated circuits, plant variety, rationalization proposal”, Art. 229 “Illegal use of the mark for goods and services, trade name, qualified indication of the origin of goods” of the Criminal Code of Ukraine by re-introducing confiscation and destruction of counterfeit products and tools and materials (which existed before February 2016), which were specially used for their manufacture;
- Reducing the threshold for criminal liability for infringement of IP rights, for example, to UAH 10,400 (≈ $ 400). The high threshold (UAH 17,200. ≈ 660 $) for criminal liability for IPR infringement, is set forth in the note to Articles 176, 177, 229 of the Criminal Code of Ukraine;
- Amending Art. 51-2 “Infringement of rights to the object of intellectual property rights” of the Code of Ukraine “On Administrative Offences” by introducing the sanction of destruction and increasing the fine from UAH 850(≈$32,7) to UAH 6,800 (≈$261,5). The low amounts of fines for infringement of IP rights provided by Art. 51-2 of the Code of Ukraine “On Administrative Offences” (from UAH 170 (≈$6,5) to UAH 3,400 (≈$130)) are incomparable with the threat posed by counterfeit goods to Ukraine’s economy and its citizens, do not perform either a deterring or punitive function with respect to the offender. Furthermore, the sanctions of this article do not include the destruction of confiscated illegally manufactured goods, equipment and materials that are intended for their manufacture.”