WCO – Two new Instruments on Customs Valuation to Support Customs and Economic Operators

At its 52nd Session, held from 17 to 19 May 2021, the Technical Committee on Customs Valuation adopted two instruments (Advisory Opinions 4.18 and 24.1) concerning royalties and licence fees under Article 8.1 (c) of the WTO Customs Valuation Agreement (Agreement) and the Customs valuation treatment of imported goods bearing the buyer’s own trademark, respectively. 

These two instruments were adopted after a virtual session which extended over three days, having regard to the current circumstances relating to the pandemic. It rewards the efforts constantly being made by the Technical Committee to improve the certainty of the interpretation and uniform application of the provisions of the Agreement in all member countries of the WTO. Practical instruments of this kind help Customs, the private sector and the Members in the fair control of Customs valuation, the facilitation of international trade and the optimization of Customs revenue.

In the first instrument, the Technical Committee gives its opinion on the valuation treatment of income tax deriving from the royalty paid to the country of importation’s tax authorities in accordance with the terms of the licence agreement signed by the importer and the seller, who is also the licence holder.

The second instrument relates to the valuation treatment of the trademark belonging to the buyer and provided free of charge to the seller for use in connection with the production of the imported goods.

These instruments adopted by the Technical Committee, once they have been approved by the WCO Council, will be available on the WCO Publications website and published in the WCO Customs Valuation Compendium.

Source: WCO, 27 May 2021

Storm in a Teacup – South Africa to apply “the system” to protect Rooibos

South African rooibos (Afrikaans for red bush) is caffeine-free, high in anti-oxidants and minerals, and traditionally grown in the Cederberg region, 250 kilometres to the north of Cape Town. Credit: John Fraser/IPS

South African rooibos (Afrikaans for red bush) is caffeine-free, high in anti-oxidants and minerals, and traditionally grown in the Cederberg region, 250 kilometres to the north of Cape Town. Credit: John Fraser/IPS

A trademark system which is used to protect Europe’s finest wines, cheeses and hams could soon brew up benefits for a humble tea from a remote region of South Africa.

The trade protection system called Geographic Indications (GIs), which is highly favoured by the eurocrats of Brussels, could be used to protect a South African red tea, locally known as rooibos (Afrikaans for red bush) as French firm Compagnie de Trucy is trying to secure the exclusive rights to market it in France.

GIs are increasingly important in the global trade arena, although it is wrong to think they offer enormous bulk trade opportunities. This form of food copyright already applies widely to specialty products, which can be linked to a specific region – such as French champagne, Parma ham and many types of cheese.

They (GIs) open-up niche markets for increased value add products, which taken together can total something significant. In addition, they involve cutting-edge frontiers in trade that largely rely on intellectual property rights for value, and are also linked to trade issues regarding brands and logos.

South African rooibos is caffeine-free, high in anti-oxidants and minerals, and traditionally grown in the Cederberg region, 250 kilometres to the north of Cape Town. It is growing in popularity worldwide due to its healthy properties, which helps to explain Compagnie de Trucy’s move to obtain marketing rights.

The issue has been elevated to diplomatic level between the European Union and South Africa at a time when both parties hope to finally conclude negotiations on updating their wide-ranging trade framework, after more than a decade of discussion. The GI system has enabled EU countries to clinch niche markets for brands such as champagne, which have enormous growth potential on a global basis.

While China as a country is South Africa’s biggest trading partner, the EU as a bloc is more important in value terms, and there are powerful arguments that both sides should expand GIs in their future relations. Soekie Snyman, the spokeswoman for the South African Rooibos Council, which represents rooibos producers, told IPS that the red tea needed to receive official trademark status in South Africa itself before it could qualify as a GI.

Rooibos, Aspalathus linearis (N.L.Burm.) R.Dah...

Rooibos, Aspalathus linearis (N.L.Burm.) R.Dahlgr., Clanwilliam, Western Cape, South Africa (Photo credit: Wikipedia)

The EU supports the protection of indigenous crops, with one of the main requirements being that the product must be protected in its country of origin, and we are nearly ready to file for trademark protection in South Africa. Rooibos is a unique plant, coming from the Cederberg mountain area. It is a caffeine-free beverage.

The EU ambassador in Pretoria, Roeland van de Geer, confirmed in a news release in March that he received a request from South Africa’s Minister of Trade and Industry Rob Davies “for the protection of South African food product names as Geographic Indications in the EU.

As well as rooibos, there have been requests for Honeybush, which is another type of tea, and for lamb from the Karoo desert region. The development of a GI system for South African farmers will reinforce the uniqueness and quality of South African products. South African wine makers have used the GI system for many years and have found it an effective way to protect famous names like Paarl and Stellenbosch.

There is a range of other South African products that might also be eligible for GI protection, such as ostrich and springbok meat, and the marula fruit from which the Amarula liquor is made. Meanwhile, the same criteria could apply to produce from other countries of the Southern African region – such as Mozambican prawns, Botswana beef and Namibian oysters. Source: AllAfrica.com

Counterfeit luxury products not simply a question of trademark infringement

stock-photo-intellectual-property-and-related-words-in-word-collage-100324247Smart, Biggar, and Fetherstonhaugh, a Canadian law firm practising exclusively in intellectual property and technology law, advises that deterring counterfeiters is particularly important to luxury brand owners. For this reason, they should always keep in mind that augmented damage awards may be available when seeking concurrent relief for copyright infringement as well as trademark infringement. Similarly, brand owners in copyright industries should keep this in mind and consideration should be given to seeking both copyright and trademark relief in all counterfeiting and pirating scenarios in Canada. Considering the question from the point of view of luxury brand owners exemplifies the point.

Copyright aims to protect against the unauthorised reproduction of original literary, dramatic, musical and artistic works. Logos and designs or patterns used by luxury brands may constitute artistic works in which copyright subsists in Canada. Further, in the case of a counterfeit item, such works are clearly reproduced without the consent of the copyright holder.

Smart & Biggar states that even though trademark and copyright law each protect different interests, they are not mutually exclusive and in many cases the sale and distribution of a counterfeit product or a pirated copyright work may constitute both trademark and copyright infringement. In such circumstances, they recommend brand owners to be mindful of the possibility of claiming both trademark infringement and copyright infringement not only to maximise their damages but, ultimately, to have an increased deterrent effect on counterfeiters [in Canada]. Source: Smart & Biggar/Fetherstonhaugh