Escalation of anti-counterfeiting measures at Ukrainian customs: amendments to the Customs Code of Ukraine

On 12 November 2019, the President of Ukraine signed Law № 202-IX “On Amendments to the Customs Code of Ukraine on protection of intellectual property rights upon the transportation of goods across the customs border of Ukraine”, which was adopted by the Verkhovna Rada of Ukraine on 17 October 2019.

The Law provides for the following major changes contributing to the protection of the domestic market from counterfeit and pirated goods:

  • "counterfeit goods" and "pirated goods" have been defined.
    Counterfeit goods include goods and packaging that violate intellectual property rights to trademark or geographical indication.
    Pirated goods are those goods that violate intellectual property rights, related rights, or rights to registered industrial design, and which are copies or contain copies of the relevant items of copyright, related rights or registered industrial design.
  • Customs services will be fee-based. Organisation of the storage of goods, the customs clearance of which was suspended (or their destruction if ordered), the preparation of documents and all related costs, shall be borne by the rights holder. 
  • Parallel imports. The customs service shall not apply measures on improving the protection, including the suspension of customs clearance, of original goods manufactured with the rights holder's consent or goods manufactured by a person authorised by the rights holder, even in the case of goods in excess of the agreed quantity. Basically, an international principle of exhaustion for such goods has been determined.
  • Procedure of early release of goods. If the customs clearance of goods is suspended on suspicion of violation of rights to industrial designs, inventions, plant varieties, or assembly of semiconductor integrated circuits, and the customs service has no information on the decisions of the relevant state bodies on prohibiting certain actions regarding such goods, or applying other measures regarding the prevention of their use, a rights holder and declarant (or owner of the goods)  shall be entitled to agree upon early release of such goods and provide the customs service with documented confirmation of such consent. The customs service will then make a final decision on whether to authorise such early release of goods.
  • Destruction of goods as a result of acquiescence. In case the customs clearance of goods is suspended on suspicion of the violation of IP rights, the rights holder shall be entitled to initiate the destruction of the goods. The declarant either consents to the destruction of goods or submits an objection thereto within the established term. Failure to timely submit an objection to their destruction shall be deemed as consent to such destruction of the goods. If the owner of the goods refuses to place such goods in the customs regime for destruction or demolition after the customs service has given its consent for destruction or has no objection to their destruction, the rights holder is considered to be authorised by the owner of the goods to place such goods in the customs regime for destruction or demolition.
  • Destruction of small batches of goods. At the rights holder's initiative, small batches of goods may be destroyed in international mail and express mail (up to three items per sub-class of goods under the Ukrainian Classification of Goods of Foreign Economic Activity, or with a total weight of up to 2 kg) where it is suspected that such goods may be counterfeit or pirated. The declarant either consents to the destruction or submits an objection thereto. Failure to timely submit an objection to their destruction shall be deemed as consent to such destruction of goods.

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