New agency to improve the enforcement of IP rights at the Mexican border

A new autonomous customs body looks set to give a significant boost to Mexico’s fight against counterfeits, particularly with regard to fake goods entering the country.

By means of official decree recently published in the Official Federation Gazette, the National Customs Agency of Mexico is to create a new customs body that is autonomous with regard to regulatory and adjudicatory functions, but still financially dependent on the Secretariat of Finance and Public Credit; it will be an important customs, foreign trade and tax authority.

This new agency represents a significant organisational improvement, which will facilitate improved customs operations, inspection services, import export compliance and compliance with regard to the collection of contributions and revenues applicable to foreign trade operations.

What is more, the National Customs Agency will be entitled to coordinate with the armed forces in order to improve and preserve security at access points, in accordance with the applicable legal provisions, with the main purpose of eradicating corruption at Customs.

Main functions

The National Customs Agency will have the following powers:

  • To direct the customs and inspection services, as well as to carry out corresponding operations in terms of the applicable legal provisions, the verification of the lawful seizure of imports and of goods in transit, including verifying their origin; also to seize or secure merchandise whose legal stay in the country is not fully proven;
  • To manage the current registry of importers and exporters in certain industries;
  • To provide other national bodies and institutions with access to the information necessary to avoid tax evasion or avoidance in customs matters, and other infractions, in accordance with international laws and treaties on customs matters;
  • To monitor and ensure due compliance with tax and customs provisions, related to the entry, transit or exit of merchandise from or into the national territory and, where appropriate, to exercise review and enforcement powers provided for in said provisions; and
  • To serve as a consultative body for the federal government in customs matters.

Relation to the IP sector and legal remedies

From an IP perspective, this agency represents a great opportunity to strengthen the observance and protection of IP rights.

A big problem over the years has been that Mexican customs authorities lack legal powers to act ex-officio. For example, Customs could not secure and seize a shipment entering Mexico at the border, even if such shipments infringe IP rights. This is because customs authorities can only take action by means of a written warrant of injunction issued by the competent authority, namely the Mexican Institute of Industrial Property (IMPI), the General Prosecutor´s Office (FGR) or a judge.

Even though Mexico is part of numerous international treaties, such as the recent implementation and adoption of the US Mexico Canada Agreement (or NAFTA 2.0), so far, Customs has not been able to act and seize counterfeit goods without the need of an injunction issued by the competent authorities, which in practice represents a real problem to the rights holders looking for expedited protection.

The creation of the new agency and considering the international treaties undertaken by Mexico, has boosted hopes that Customs may actually be granted the power to act without an injunction, in order to secure and seize infringing goods that are clearly violating IP rights. However, we are still waiting for the Internal Regulations of the National Customs Agency of Mexico, which will clarify this in due course.

Current legislation gives various legislative paths to combat counterfeits at customs while taking into account the specific nature of each case.

In accordance with the judicial and administrative enforcement bodies of Mexico, a rights holder can respond to a potential infringement by an infringement action, to be filed and ruled before the Mexican Institute of Industrial Property; or by a criminal complaint, to be prosecuted before the Specialised Unit for Investigation of Crimes against Copyright and Industrial Property.

These remedies must be exercised by the rights holder or its legal representative, while taking into consideration the applicable legal requirements. In some cases, the proper path shall be an infringement action – especially when dealing with confusingly similar trademarks and the goal is just an economic sanction (fine) against the infringer – or a criminal action when dealing with fake goods and accurate falsifications of trademarks, and the goal is to send a stronger message to counterfeiters.

It is hoped that the creation of the agency – which should work jointly and in cooperation with other authorities – should strike a significant blow against counterfeiting in Mexico and help to ensure the full protection of IP rights on the ground.

Oliver Silva C.