New laws have been approved by the European Parliament to extend national authorities powers within the European Union (EU) to seize and confiscate counterfeit goods travelling through Europe even if they are destined for a non-EU country. The draft law, already informally agreed with national governments, is part of an EU strategy to fight fraud and corruption.
The European Court of Justice, in joint cases Koninklijke Philips Electronics NV (C-446/09) and Nokia Corporation (C-495/09), prevented HMRC officials from blocking the passage of fake Nokia handsets intended for sale outside the EU. It was held that authorities may only seize couterfeit goods which are likely to be placed on the market in the EU. Thus, they have no powers in relation to goods merely in transit through the EU destined for non-EU countries. Customs authorities could only inspect such goods, but must let them go, with the risk that they will eventually be diverted back into Europe.
The new draft laws are a signal to those involved in couterfeiting that a crackdown is imminent. They will enable member states to confiscate criminal assets following final conviction. This will include assets acquired through crimes of: corruption in the private sector, involving officials of EU institutions or of EU member states; participation in criminal organisations; child pornography; and cybercrime. It will also enable authorities to confiscate assets even if the suspect or accused person is ill or absent. Furthermore, extended confiscation could be possible where a court “on the basis of the circumstances of the case is satisfied that the property in question is derived from criminal conduct.” Confiscation from third parties may also be permitted where the acquiring third party “knew or should have known that the purpose of the transfer or acquisition was to avoid confiscation, based on concrete facts and circumstances, including that the transfer was carried out for free or in exchange for an amount significantly lower than the market value.”
The Directive has yet to be formally approved by the European Council but this is expected to happen in coming weeks. EU member states will then have 30 months to transpose the Directive into national law.
Rachel Pellatt is a law student at Southampton Solent University and works one day a week at Lawdit