There have been a number of significant changes at the Korean Customs Service (“KCS”) in the last 12 months, with amendments to the Guidelines for Customs Clearance of International Mail Import and Guidelines for Protection of IP Rights in Customs Clearance of Imports and Exports respectively taking effect in November 2018 and January 2019. Below we provide an overview of the revisions most relevant to tackling the import of counterfeit goods, as well as the preliminary results recently shared by the KCS.

Now more difficult for small-parcel counterfeits to fly under the radar

Due to the increasing amount of counterfeit goods being moved through international mail — particularly items such as brand-name footwear, golfing goods, bags, toys etc. — KCS has implemented the following changes in line with the amended Guidelines for Customs Clearance of International Mail Import:

Before Revision

• Small parcel counterfeits returned to consignor without further investigation and penalty.
• Sorting suspicious counterfeits from among small parcels totally dependent on the KCS’ information and discretion.

After Revision

• Small parcel counterfeits destroyed, or returned to the consignor only after any IPR-infringing parts have been removed (difficult in practice, so destruction most likely). KCS may, at their discretion, investigate the consignee.
• IPR holders given the opportunity to appraise small parcels onsite.

In practice, the initial sorting and classification of potential counterfeit items is handled by the KCS in conjunction with the Trade-related IPR Protection Association (“TIPA”). TIPA is a not-for-profit membership organization which was formed in 2006 under the authority of the KCS, and provides services for its members including, but not limited to, scheduling onsite visits and organizing training sessions for customs officials. Such activities can also be performed by a local agent in the case that a representative of the IPR holder itself is not available.

The following chart shows the updated clearance procedure for international mail entering Korea:

Recording IP rights with Korean customs

Rights holders are recommended to record their IPRs with KCS in order to benefit from the strengthened provisions. Recordal is made via TIPA, and the information is shared with KCS for use in sorting/classifying mail. Along with the IPR data, brand enforcement guidelines and information can also be shared to assist customs officials in discerning genuine goods from counterfeits.

Following the revisions to the Guidelines for Protection of IP Rights in Customs Clearance of Imports and Exports, IPR recordals are now valid for up to 10 years (dependent on the validity of the underlying IP right). This is a significant improvement over the previous 3-year term. For trademarks in particular, this makes customs recordal at the time of registration/renewal of the trademark right a more convenient option.

How effective have the new measures been?

According to KCS, beginning from when the new guidelines went into force on November 26, 2018 and until the end of June this year, approximately 20,000 items of IPR-infringing goods were located and seized from international mail entering Korea. Among this total, the majority — 98.9% — originated from China, followed by Hong Kong, Singapore, Cambodia, Thailand etc. By the end of September, KCS intends to have destroyed roughly half of this total.

Brand owners also appear to be playing an active role in the new process, with KCS reporting that representatives from over 60 brands have made on-site inspections of goods suspected of infringing their IPRs since the changes were introduced.

This strengthened focus on the protection of IPRs at the border is naturally good news for brand owners, and we expect that interest and participation will continue to grow given the strong early results reported by KCS.

Written by Jonathan MASTERS, Hyun-sook CHA