Free-Trade Zones on the anti-counterfeiting map

Free-Trade Zones on the anti-counterfeiting map Journal of Intellectual Property Law & Practice, 2018, Vol. 13, No. 7 EDITORIAL 517 Editorial Marius Schneider* Free-trade zones are ‘lightly regulated zones’ facilitating concludes that the existence, number and size of Free- transit of goods by relieving traders of numerous burden- Trade Zones increase the value of counterfeit and pirated some formalities that would otherwise apply to goods en- products exported by a given economy. The findings in- tering a country for consumption. For traders these zones dicate that establishing one additional Free-Trade Zone mainly offer savings in taxes and customs duties, greater within a given economy significantly increases counter- flexibility in terms of labour and immigration rules, lighter feiting by 5.9% on average, keeping all other factors con- regulation and oversight of corporate activities, fewer stant. The study also led to clear findings with respect to restrictions on corporate activities, and the opportunity to the connections between the value of fake goods exported reach out to new markets. For host countries, Free-Trade from an economy on the one hand, and the number of Zones can be an important tool for attracting foreign in- firms operating in Free-Trade Zones and the total value vestment and promoting economic development and of exports from these zones on the other. growth, creating jobs and boosting exports. For IP practi- The study thus confirms the long-held suspicion that tioners, Free-Trade Zones have been shrouded in suspicion Free-Trade Zones tend to be exploited by counterfeiters on the basis that they are often abused by criminals for the for their illegal operations and advocates increased transpar- trade in counterfeit and pirated products. ency to promote clean and fair trade in Free-Trade Zones. These suspicions were confirmed by two recent EU The report recognises that attaining this objective will only IPO/OECD reports. The 2017 EU IPO/OECD report on be possible with the involvement of industry members and Mapping the Real Routes of Trade in Fake Goods estab- key stakeholders in the trading chain but lacks any practical lished that traders of counterfeit and pirated goods tend measures as to how this objective can be achieved. to ship fakes via complex routes, with many intermediate So how do we go about it? Whilst Free-Trade Zones stops along the way. Transit points can be abused to fa- are important tools for the economic development of a cilitate falsification of documents in order to disguise the country, these zones must be properly regulated and ade- real origin of the fakes. They can also be used to establish quately monitored by enforcement authorities in order clandestine ‘distribution centres’ for counterfeit and to curb illegal activities including counterfeiting and pi- racy. Governments must take actions to enable right pirated goods and serve to repackage and relabel goods. The second EU IPO/OECD study on Trade in holders to be empowered to halt the trans-shipment and transit of counterfeit goods through Free-Trade Zones, Counterfeit Goods and Free-Trade Zones: Evidence from Recent Trends published in 2018 confirms that Free- and to allow customs and police authorities to exercise control not only on goods that enter and leave the Free- Trade Zones are utilised to facilitate trade in counterfeit Trade Zone, but also on the activities carried out within and pirated products. This is particularly the case when governments do not police these zones adequately. As the zone. National IP legislation should thus extend to Free-Trade Zones, and counterfeiting activities of all a matter of fact, these zones are often considered to be ‘foreign entities’ that are outside of the scope of domestic kinds must be outlawed. It ought to be illegal to bring in, process, transit or export counterfeit goods to Free-Trade policing activities and goods in transit are often not tar- Zones. Customs and police authorities should thus be geted by local enforcement authorities. Furthermore when Free-Trade Zones are operated by private entities, empowered to take action against counterfeit and pirated goods in transit and trans-shipment. Private operators of the latter may have little interest in encouraging law enforcement activities, out of concern that this may Free-Trade Zones should be encouraged to foster free and clean activities within the zone. It is only by setting negatively impact their business interests by disrupting out clear and comprehensive rules and allowing for their commercial activities. The quantitative analysis based on robust results pre- proper enforcement by law authorities that Free-Trade Zones will become counterfeit-free zones. sented in the EU IPO/OECD study on Free-Trade Zones * Editor and Attorney-at-law, IPvocate and IPvocate Africa Email: office@IPvocateAfrica.com. V The Author(s) 2018. Published by Oxford University Press. All rights reserved. doi:10.1093/jiplp/jpy076 Advance Access Publication 24 May 2018 Downloaded from https://academic.oup.com/jiplp/article-abstract/13/7/517/5003329 by Ed 'DeepDyve' Gillespie user on 20 June 2018 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Intellectual Property Law & Practice Oxford University Press

Free-Trade Zones on the anti-counterfeiting map

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Oxford University Press
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© The Author(s) 2018. Published by Oxford University Press. All rights reserved.
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1747-1532
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1747-1540
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10.1093/jiplp/jpy076
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Abstract

Journal of Intellectual Property Law & Practice, 2018, Vol. 13, No. 7 EDITORIAL 517 Editorial Marius Schneider* Free-trade zones are ‘lightly regulated zones’ facilitating concludes that the existence, number and size of Free- transit of goods by relieving traders of numerous burden- Trade Zones increase the value of counterfeit and pirated some formalities that would otherwise apply to goods en- products exported by a given economy. The findings in- tering a country for consumption. For traders these zones dicate that establishing one additional Free-Trade Zone mainly offer savings in taxes and customs duties, greater within a given economy significantly increases counter- flexibility in terms of labour and immigration rules, lighter feiting by 5.9% on average, keeping all other factors con- regulation and oversight of corporate activities, fewer stant. The study also led to clear findings with respect to restrictions on corporate activities, and the opportunity to the connections between the value of fake goods exported reach out to new markets. For host countries, Free-Trade from an economy on the one hand, and the number of Zones can be an important tool for attracting foreign in- firms operating in Free-Trade Zones and the total value vestment and promoting economic development and of exports from these zones on the other. growth, creating jobs and boosting exports. For IP practi- The study thus confirms the long-held suspicion that tioners, Free-Trade Zones have been shrouded in suspicion Free-Trade Zones tend to be exploited by counterfeiters on the basis that they are often abused by criminals for the for their illegal operations and advocates increased transpar- trade in counterfeit and pirated products. ency to promote clean and fair trade in Free-Trade Zones. These suspicions were confirmed by two recent EU The report recognises that attaining this objective will only IPO/OECD reports. The 2017 EU IPO/OECD report on be possible with the involvement of industry members and Mapping the Real Routes of Trade in Fake Goods estab- key stakeholders in the trading chain but lacks any practical lished that traders of counterfeit and pirated goods tend measures as to how this objective can be achieved. to ship fakes via complex routes, with many intermediate So how do we go about it? Whilst Free-Trade Zones stops along the way. Transit points can be abused to fa- are important tools for the economic development of a cilitate falsification of documents in order to disguise the country, these zones must be properly regulated and ade- real origin of the fakes. They can also be used to establish quately monitored by enforcement authorities in order clandestine ‘distribution centres’ for counterfeit and to curb illegal activities including counterfeiting and pi- racy. Governments must take actions to enable right pirated goods and serve to repackage and relabel goods. The second EU IPO/OECD study on Trade in holders to be empowered to halt the trans-shipment and transit of counterfeit goods through Free-Trade Zones, Counterfeit Goods and Free-Trade Zones: Evidence from Recent Trends published in 2018 confirms that Free- and to allow customs and police authorities to exercise control not only on goods that enter and leave the Free- Trade Zones are utilised to facilitate trade in counterfeit Trade Zone, but also on the activities carried out within and pirated products. This is particularly the case when governments do not police these zones adequately. As the zone. National IP legislation should thus extend to Free-Trade Zones, and counterfeiting activities of all a matter of fact, these zones are often considered to be ‘foreign entities’ that are outside of the scope of domestic kinds must be outlawed. It ought to be illegal to bring in, process, transit or export counterfeit goods to Free-Trade policing activities and goods in transit are often not tar- Zones. Customs and police authorities should thus be geted by local enforcement authorities. Furthermore when Free-Trade Zones are operated by private entities, empowered to take action against counterfeit and pirated goods in transit and trans-shipment. Private operators of the latter may have little interest in encouraging law enforcement activities, out of concern that this may Free-Trade Zones should be encouraged to foster free and clean activities within the zone. It is only by setting negatively impact their business interests by disrupting out clear and comprehensive rules and allowing for their commercial activities. The quantitative analysis based on robust results pre- proper enforcement by law authorities that Free-Trade Zones will become counterfeit-free zones. sented in the EU IPO/OECD study on Free-Trade Zones * Editor and Attorney-at-law, IPvocate and IPvocate Africa Email: office@IPvocateAfrica.com. V The Author(s) 2018. Published by Oxford University Press. All rights reserved. doi:10.1093/jiplp/jpy076 Advance Access Publication 24 May 2018 Downloaded from https://academic.oup.com/jiplp/article-abstract/13/7/517/5003329 by Ed 'DeepDyve' Gillespie user on 20 June 2018

Journal

Journal of Intellectual Property Law & PracticeOxford University Press

Published: May 24, 2018

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