Anticounterfeiting Committee Survey Points to Need for Enforcement in Free Trade Zones

Published: September 1, 2019

As concern grows over the direct correlation between free trade zones (FTZs) and counterfeiting activities around the world, stakeholders are taking a closer look into the regions where FTZs are present and to analyze laws and regulations in enforcing intellectual property (IP) rights and the actual practices of doing so.

With more than 3,500 FTZs globally, and approximately 400 in Latin American countries, INTA’s Anticounterfeiting Committee, Latin America and Caribbean Subcommittee (LAC Subcommittee) recently created and distributed a survey among the subcommittee members.

Preliminary findings from the survey suggest that in countries where FTZs are present, specific regulations usually exist to allow for IP enforcement within those zones and with regards to goods in transit. However, in practice, the activities of enforcing those IP rights appear to be relatively low.

While FTZs help emerging economies attract foreign investment and generate jobs and growth, the same factors also attract criminals and their counterfeiting activities. As a country increases the number and size of its FTZs, so too do its customs seizures increase. A new report by the Organisation for Economic Co-operation and Development and the European Union Intellectual Property Office found that on average, each additional FTZ within an economy is associated with a 5.9 percent increase in the value of fake exports. This in turn leads to a growth of trade in counterfeits.

The objective of the LAC Subcommittee was to use the survey results to draft a document identifying FTZs and ports in Latin American and Caribbean countries that are currently being used for the importation / exportation / transit of counterfeit products. As a first step, the LAC Subcommittee conducted this survey, asking Anticounterfeiting Committee members the following questions regarding their respective countries:

  1. Do customs, prosecutors, law enforcement, and/or any other governmental authorities have the power to make inspections and seize counterfeit and infringing goods in FTZs? Are ex officio inspections allowed, or is the filing of a criminal complaint mandatory? Is there a specific legislation that establishes the procedure in FTZs?
  2. Is it possible to seize transshipped counterfeit or infringing goods, or goods in transit in FTZs?
  3. How active are authorities in FTZs? Are there any cases relating to counterfeit or infringing goods in FTZs?
  4. What is the role of intermediaries (freight forwarders, shipping lines) in counterfeiting trade? Are they willing to provide information to brand owners on counterfeiters that are exporting and importing counterfeit goods? Are they supporting law enforcement and/or prosecutors in criminal actions?
  5. How do customs agents, trademark owners, and experts interact when dealing with counterfeiting or infringement in FTZs?

To view the full results of the survey, please visit INTA’s website here. INTA, through its Anticounterfeiting Committee, intends to use the information gathered in this survey to provide suggestions, guidelines, and best practices to governments with FTZs in affected regions.

For more information on INTA’s anticounterfeiting activities, please contact INTA’s Anticounterfeiting Manager Maysa Razavi at [email protected], Anticounterfeiting Advisor Tiffany Pho at [email protected], or Anticounterfeiting Advisor Asia-Pacific Valentina Salmoiraghi at [email protected].

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.

© 2019 International Trademark Association