Whilst most rights owners look at shipments leaving from Eastern and Southern China, few look at Xinjiang Province and the Western Chinese Customs points. Indeed many rights owners focus on goods going East to the US/Canada and South via Dubai, the counterfeit trade through the ex-soviet countries continues without much review.
The creation of the Customs Union coming into effect in 2012 was aimed at creating a harmonization of IP laws and regulations within the 3 countries and to encourage the free flow of goods within the said area. This greater ease of transport is seen as a worry to rights owners with Kazhastan bordering China and ease of traffic through to Russia and Belarus all the way to Europe’s front door. Many wholesale markets in Urumqi (capital of Xinjiang Province that borders Kazakhstan) cater to this route that leads into Russia and to the counterfeit markets there, including Luzhniky in Moscow. Whilst the free-flow of goods between the 3 countries has increased, the Customs union still does not have a unified customs register, which had been aimed to help enforcement against infringements and implementation remains difficult in certain areas especially with regards to the exhaustion of rights. The only solution for rights owners worried about the trade from China is still to ensure recordation in all each Customs Union member state and China itself.
Indeed this Customs Union comes hand in hand with increased the trade between Russia and China. Whilst Russian Customs only monitor imports for IPR infringement, Chinese Customs will focus on both import and export. Both countries have an IPR Customs recordal system, though China allows the recordal of patents whilst Russia does not. The recordation time in both countries is similar; about 3-4 months, however the recordal requirements are arguably more demanding on the Russian side, especially with regards to payment of a bond or contract of risk of insurance. Russia requires for confirmation of counterfeit goods a possible 10 days, whilst in China the response time should be 3 days.
It is time rights owners started looking at this trade China-Kazakhstan/Russia/Belarus trade axis that may well grow to be a major problem for brands traditionally looking East.