Antonio Lloret, Customs and Excise Department of the

Spanish Central Tax Authority

HO CHI MINH CITY | 19 Oct 2018

Customs Controls for IPR purposes

1.1 Operation “RENACER”

March – April 2015 - Customs officers from the Risk Analysis Unit in the port of Algeciras

seized 309,416 counterfeit items with an estimated value of 17,5 million Euros.

The electronic processing and analysis of entry summary declarations revealed inconsistencies

in the data provided regarding certain shipments. This analysis was based on the pre-

established risk profiles.

The Risk Analysis Unit requested then bills of lading. The examination of these documents

confirmed the detected inconsistencies. In addition, the routes for the shipments were unusual.

As a result, the Risk Analysis Unit carried out exhaustive physical checks on 11 containers

shipped from Yantian (China) to Morocco and Senegal (goods in transit) and to Spain.

After opening the containers, the illegal goods were found concealed behind a first rows of legal

products.

Main products seized :

1.2 Operation “RENACER II”

December 2015 – January 2016.- The Risk Analysis Unit of Algeciras seized 177,227

counterfeit goods with an estimated value of 9,030,898 euros.

As a result of the analysis of information generated by the entry summary declarations and on the

basis of the risk profiles defined by the Customs Administration, eight suspicious containers

originating from China with declared destinations in African countries (Senegal and Mauritania)

were earmarked for inspection.

- Risk Analysis Strategy

- Advanced cargo information

- IT tools

- The human factor (the Risk analysis Unit)

- Goods in transit

- Health and safety concerns

2. Operations “TESTA” and “TASHKEN” (Shampoo)

February/October 2015

The operation was launched after a request for assistance and intervention from the European

Anti-Fraud Office (OLAF), concerning an ongoing investigation by several EU member states

related to a large scale fraud operation involving the import of fake shampoo of a well-

known brand.

The OLAF report indicated that the product was counterfeit and had arrived in Spain from United

Arab Emirates, via Holland and was destined for a warehouse in Málaga.

Spanish Customs officers identified a fully functioning and seemingly legal industry, with facilities

for manufacturing and distributing the counterfeit products.

1.1 In a warehouse in Málaga, Customs seized 28,000 shampoo bottles. The warehouse,

storing counterfeit bottles labelled with the logo of a well-known brand of shampoo, was equipped

with labelling, packaging and distribution facilities.

1.2 In a further investigation, a second warehouse was located in Cádiz, where the bottles were

filled. 1,000 bottles filled with shampoo and other empty bottles were seized, as well as raw

materials used for the manufacture of the product in different scents.

1.3 The investigation lead to the seizure of two containers in Algeciras seaport, containing

200,000 empty bottles and tops.

2. Investigation carried out jointly by Customs and Police in Cadiz for alleged crimes against

industrial property and money laundering. Seven people were arrested. Approximately, 133,729

counterfeit bottles, 4 vehicles, cash, computer equipment, different production, bottling,

labelling and storing machinery, were intercepted during the search of industrial premises in

locations of the province of Cadiz, as Medina Sidonia, Chiclana de la Frontera and Alcala de los

Gazules, and in residences of those arrested in Marbella (Malaga).

The organization is thought to have manufactured as many as one million bottles of fake

shampoo.

In order to give the appearance of a legitimate business, in 2012, the organisers set up a

company in Spain and several companies abroad (Arab Emirates and Cyprus). This way, the

company's activities were dispersed in order not to attract attention.

The Spanish company declared its activity to be a wholesale vendor of dress accessories.

However, the company in fact imported bottles, tops, labels and raw materials from China.

The arrested persons were accused of various criminal offences, including crimes against

industrial property, forgery of public and trade documents, crimes against Public Health, as this

type of product is subject to strict health regulations, money laundering and tax offences.

22.10.15. Spanish Customs had been informed by OLAF on an investigation related to fake Head

&Shoulders from United Arab Emirates and China to the European Union, with several seizures in

different Member States.

Two of the consignee companies were located in the province of Tarragona. The investigation

was carried out under the control of the judicial authority. The premises of both companies were

searched and 594 bottles of counterfeit shampoo were seized. The previous acquisition of

537,480 counterfeits bottles of hair products was also established from the analysis of accounts

and documents.

18.01.16. The Risk Analysis Unit at the seaport of Ceuta selected for inspection a container,

declaring to transport “consolidated merchandise”. After a physical examination, it was

established to transport 13,386 counterfeit shampoo bottles.

Two companies involved.

19.02.16. Seizure of fake shampoo in Ceuta. Continuation of actions.

In January, 13.386 bottles of counterfeit shampoo had been seized at the port of Ceuta.

Further Investigations from Customs officers in Ceuta, in close cooperation with Guardia

Civil, were focused on an individual with a record for crimes against industrial property

(counterfeiting Colgate toothpaste in 2007). This person had an “abnormal” economic activity,

having several business addresses, accumulating debts with the Treasury, and using relatives

and workers as managers.

Industrial premises in central Spain were searched. 9,582 fake shampoo bottles were

seized.

Documentation revealed previous operations for a total of 166,560 shampoo bottles.

20.07.16.

In June 2016, in the frame of an investigation by Customs, fake shampoo bottles, similar to

those seized in 2015, were found in industrial premises in Ceuta.

The analysis of the samples by the manufacturer were received, which determined that of the 4

types sent, 2 are counterfeits and 2 are authentic. It is probably due to the fact that his supplier

purchases products from the legal shampoo manufacturer, but also made acquisitions to a

company already under investigation located in southeastern Spain.

1,362 fake shampoo bottles seized.

- International cooperation

- Cooperation betwen enforcement authorities

- Cooperation with right holders

- Risk analysis Investigation Risk Analysis Investigation Risk Analysis

- These cases demonstrates once again that organised international fraud networks maximise

their profits through smuggling counterfeit goods in Europe.

- This generates huge losses of tax revenues due to the black market in fake products.

- Such products are potentially harmful to health since they replace genuine, safe and well-

tested products by illicit and non-standard ones.

- These international fraud networks use fiscal evasion and a modus operandi similar to that of

networks engaged in the contraband of cigarettes and drugs.

- Genuine and counterfeit products mixed

3. Fake watches.

18.05.15. Cuistoms Risk Analysis Unit at the port in Alicante detained a container from China,

destined to Madrid. It contained 52,380 fake watches .

4. Fake perfumes

17.06.15. In March, Spanish customs received a request for customs cooperation from OLAF.

It was related to the importation of fake perfumes from China and Turkey to the EU.

Investigation started in November 2014, with a seizure by German Customs of 28,320 fake

perfume bottles whose ultimate consignee was a Spanish company in Madrid.

The manager of the company stated that various imports had actually been carried out misusing

its identity, which had already been reported to Police.

The agents checked the veracity of the statement and later identified the one truly involved in

these criminal activities.

The analysis of documents showed that more than 500,000 fake perfume bottles had been

imported. One person arrested.

5. Labels in a routine customs control of postal parcels…

November 2015. In a routine control of postal parcels at the Post Office in Las Palmas (Canary

Islands), a significant amount of labels with the logo of a popular clothes brand was found.

They were destined to different shops in a shopping mall.

Investigation followed in cooperation with Police.

7,592 fake items (clothes, watches, glasses, etc), with a market value of plus 2 million de

Euros, seized

13 people were arrested.

6. Bearings, bearings, bearings

10.12.15. OLAF requested collaboration to Spanish customs, related to alleged fake bearings.

In July, several containers from China were intercepted at the French port of Le Havre with fake

bearings. According to information, these containers were destined to a company based in

northern Spain.

Spanish Customs officers searched the company’s warehouses.

9,490 fake bearings were intercepted.

26.09.16. In June 2016, Spanish customs investigators had been informed by a right holder that

counterfeit bearings would be imported in Madrid from China.

On 13/09/16, two consignments that had arrived at Madrid Airport and were addressed to one

of the suspected companies were identified. The consignments were collected by an individual

who was followed until he arrived at an industrial area in Madrid.

The goods were unloaded in the premises of one of the suspected companies.

On the 22/09/16, 4 new consignments arrived. As in the previous case, monitoring was carried

out until they arrived to the same warehouse.

At that moment, Customs and Police officers intervened. The vehicle and the warehouse were

inspected, locating 10 counterfeit bearings. Documentary evidence was found proving that 47

bearings had previously been imported. Two persons arrested and two companies

involved.

04.05.17. Joint action by Barcelona Customs and Police officers.

In April, Police had investigated a case of fake bearings.

It was known that that the company under investigation was expected to receive another

consignment of counterfeit bearings.

Actions were initiated to detect and intercept this importation at Customs

10,000 fake bearings seized.

07.07.17. Customs officers in Barcelona carried out investigations on counterfeit bearings.

They had been sent by air cargo from China.

In August 2016, OLAF was approached by a mechanical parts manufacturer to support a

large seizure of counterfeit bearings in Barcelona, which had reached Spain by air cargo.

The co-operation between OLAF and Spanish customs led to a seizure of 1.5 tonnes of

counterfeit products

18.04.18. Customs Risk Analysis Unit at the port of Barcelona examined goods in transit from

Hong Kong, declared as bearings.

5.813 counterfeit bearings were seized.

31.05.18. Customs and Police officers conducted an investigation and seized, in a warehouse

located in Madrid, 368 fake bearings.

- Cooperation with right holders- International cooperation- Risk analysisinvestigation Risk Analysis- Safety concerns: Technical assessment confirmed that the seized

bearings did not correspond to standards of resistance and quality, which could pose serious threats to safety of consumers.

- How much trouble can a counterfeit product cause?http://www.skf.com/binary/21-252392/Counterfeiting%2Bbrochure%2B-%2B6940_1%2BEN_tcm_12-252392.pdf

7. April 2016. Operation “TOCHO”.

Customs officers from Operational Units in Madrid and Valencia developed, in cooperation with

National Police, the operational phase of operation “TOCHO”, against an organization involved

in counterfeiting of leather good, smuggling and money laundering.

Organization premises and warehouses, and private homes of its members, were searched in

eastern Spain.

Fabric rolls, dies with brand logos, bags and counterfeit clothes, machinery to produce them, were

intercepted.

600,000 Euros were blocked and 400,000 Euros were seized.

20 detained persons.

8. October 2016. Operation “VISIÓN”

French customs intercepted 75,000 glasses at Paris-Charles de Gaulle Airport, intended for

a company based in Madrid. Operation ‘Vision' started following information provided by French

Customs on those seizures.

The companies to which the goods were addressed were surveilled.

Customs and Police officers seized 246,120 fake glasses of a well-known brand, imported from

Asia.

The alleged responsible for the importation and distribution was arrested, a Chinese citizen, and

four searches were carried out at warehouses in Madrid.

9. September – November 2016. Operation “BIG BLACK”.

13.09.2016. 6 containers with clothing shipped from China arrived at the port of Barcelona.

Customs Risks Analysis Unit in Barcelona decided to select them all for control.

All containers were shipped by two different companies to a well-known textile company. But

both the proceeding as the the route taken by the goods during shipping and importing was not a

usual one, leading the Barcelona Customs to investigate further.

After verifying that the addressee, a textile company supposedly receiving the incoming goods,

actually had no knowledge of the transaction and had not made any such order, Customs

officers decided to physically inspect the containers, finding a total of 25,360 counterfeit jackets

and 101,400 counterfeit shirts.

Subsequently, on 14.11.2016, the ongoing investigations detected another shipment of 5

containers from one of the same Chinese companies. After proceeding to inspect the goods, a

further 28,278 jackets and 30,800 shirts were seized, in this case labelled with other, equally

counterfeit, brands.

10. 11,696 fake T shirts; country of provenance: USA

06.09.16. Risk Analysis Unit in Ceuta inspected 221 cases shipped from United States that had

been declared as containing T shirts.

The customs representative of the importer had requested the change of location to a warehouse

for temporary storage.

The merchandise was initially shipped from USA to France, and then moved to Algeciras

covered by a customs transit declaration.

11,696 fake T shirts.

One natural person and one legal person charged.

11. COSMETICS

30.11.16. Customs risk analysis unit in Alicante selected

for control a container shipped from Dubai and addressed to

Alicante. Declared content: deodorants.

16,512 counterfeit spray deodorants found.

1 person arrested.

12. Bedspreads and cushion covers

20.03.17. Customs Risk Analysis Unit. Container from China intercepted at the port of Melilla

with 36,805 fake items, as bedspreads and cushion covers.

13. Soccer balls, toothbrushes, colour pencils

18.09.17. Customs Risk Analysis Unit at the port in Algeciras selected a container for

inspection, in transit from China to Guinea Bissau.

It was declared to contain cardboard boxes.

64,000 items seized (soccer balls, toothbrushes and colour pencils)

14. Tights, car filters, silicone tubes

December 2017.

Risk Analysis Unit - Customs at the seaport in Melilla intercepted 3 containers from China with

counterfeit goods.

- 38,240 tights

- 120,110 car filters,

- 10,000 silicone tubes,

- 30,238 pairs of socks.

4 legal and 3 natural persons involved.

15. Jewellery

24.01.18. Customs Risk Analysis Unit at the port of Alicante selected for inspection a

consignment of 53 packages from China, with destination Algeria. Declared content: jewellery.

13,211 counterfeit necklaces, bracelets and earrings seized.

24.04.18. Customs and Guardia Civil intercepted in Alicante seaport a container with

different counterfeit goods from China that had arrived at the port of Valencia, declared

as jewellery, handbags and handkerchiefs.

More than 50.000 fake items were seized.

March 2018. Algeciras Customs Risk Analysis Unit

March 2018. Customs Risk Analysis Unit at the port of Algeciras selected 6 containers from

China, in transit to Dakar (Senegal). The following counterfeit goods were seized:

- 59,520 Colgate toothpaste tubes,

- 4,320 Adidas sportswear garments,

- 15,050 Samsung batteries.

- 1,300 Saint Laurent and Moschino bags,

- 18,250 Samsung chargers and hands-free,

- 72,000 Mac and L´Oreal makeup bases,

- 8,300 Gucci, Prada, Lacoste, Emporio Armani and Montblanc sunglasses,

- 125 Gucci bags and

- 939 Chanel, Louis Vuitton and Burberry wallets.

16. Operation ‘Battery’ – Example of inland operation

April 2018. Customs officers dismantled in Madrid an illegal industrial premise where counterfeit

batteries and USB flash drives labelled with logos of well-known brands were manufactured

The operation was launched when customs investigators were informed on suspicious

movements taking place at unusual times in an industrial district Madrid. Further investigations

narrowed down the search to two warehouses situated between two Chinese restaurants that

were different to typical restaurants of this type, and which were strategically located on the

corner of an alley installed with security cameras.

Customs officers raided the premises. In one of the warehouses, the agents determined that the

measurements of the registered premises were inconsistent with the exterior dimensions of the

warehouse. Two individuals of Chinese nationality attempted to escape from the back entrance

with the keys to the warehouse and a green plastic bag containing documents identifying clients

and an inventory of the merchandise. They were immediately detained by customs agents and a

wall separating the two sections of the warehouse was discovered. One side of the warehouse

housed the service agency, which had no connection with the illegal activity, while the other side

contained an area not visible from the street.

Material seized

- 4 machines for manufacturing batteries; each machine is designed for a different size of battery.

- 1 machine for heat sealing the blister packaging for the batteries.

- 1 machine to assemble the finished package.

- 1 compressor.

- Batteries: 226,400 units.

- USB flash drives (various storage capacities): 5,100 units

- SD memory card adapters: 176 units

- 250 boxes with thousands of units of diverse material for assembly, labelling and packaging

08.05.18. Customs and Police officers carried out a search on 7 premises located Valencia,

seizing more than 25.000 fake Panasonic batteries.

26.06.18. Customs and Police Officers dismantled in Valencia two illegal batteries factories.

Five individuals were arrested and eight are under investigation in an operation that allowed to

seize about 1.325.000 batteries that pretended to be top quality. Ten inspections and three

searches were carried out in Valencia, Badajoz and Valladolid, finding around 80.000 batteries

already on sale in different shops.

The agents decided to proceed urgently due to the potential danger of the products. The batteries

were produced without any type of quality control and could disable electrical appliances, cause

fires or even explode, with the subsequent risk for users.

This operation was carried out by agents from Customs Surveillance in Valencia and Madrid,

National Police in Valencia, Badajoz and Valladolid.

In July 2018, the EU and Vietnam agreed on final texts for theEU-Vietnam Free Trade Agreement (FTA) and the EU-VietnamInvestment Protection Agreement (IPA).

ARTICLE 12.59Active Involvement of Customs AuthoritiesThe customs authorities shall, on the basis of risk analysistechniques, be active in targeting and identifying shipmentscontaining import and export goods suspected of infringingintellectual property rights. They shall cooperate with rightholders, including allowing the provision of information for riskanalysis.

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@IPKey_EU