Anti-fraud commissioner tackles China on cigarette smuggling

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Cigarette smuggling and fake designer goods will top the agenda when Europe's Anti-Fraud Commissioner Algirdas Šemeta meets Chinese officials in Shanghai this week. The commissioner told EURACTIV the EU has an "enormous problem" with illegal goods entering the European market from China.

Šemeta said the European Commission is investing considerable resources in tackling cigarette smuggling, an illegal racket typically used to fund criminal gangs. He said Chinese authorities have raided thousands of factories and customs authorities have seized millions of counterfeit cigarettes.

The commissioner will spend this week in China discussing customs cooperation, supply-chain security, copyright issues and patent protection.

"We still have an enormous problem when it comes to cheap and illegal products entering the EU from China. In fact, China accounted for about 60% of all products suspected of infringing IPR [intellectual property rights] which were detained by customs last year. That is why I have put this point high on the agenda for my discussions in Shanghai," said Šemeta.

He said it is in China's interest to show it takes counterfeiting and piracy seriously. "This is the only way to increase global trust in Chinese products and to protect their own companies that play by the rules," he said, adding that Chinese brands are now becoming the latest victims of bootleggers.

Šemeta, who is responsible for customs, taxation and the fight against counterfeiting, says there has been "real progress" in EU-China customs cooperation in recent years.

"I think the Chinese are also becoming more sensitive to the damaging effects of counterfeiting on research, innovation and jobs, and this provides further motivation for them to tighten their enforcement," the commissioner said.

He noted that Beijing has beefed up its law enforcement over the past five years and introduced new legislation on intellectual property, but there is still room for improvement.

The pressure on China has been ramped up as European designer brands expand into Chinese cities targeting middle-class consumers.

He said China is Europe's fastest growing export market and the biggest source of EU imports, prompting him to schedule a trip to China to discuss customs issues during the first year of his mandate.

To read the interview in full, please click here

The European Commission released a report on customs in July which showed that 64% of counterfeit goods entering the EU market originate in China. Cigarettes accounted for 19% of seized goods, with other tobacco products accounting for 16%.

Over five billion illegal cigarettes were seized by customs in 2008, prompting the European Anti-Fraud Office (OLAF) to dispatch a liaison officer to Beijing specifically to work with Chinese authorities on the problem.

Last year the EU signed an Action Plan with China designed to step up IPR customs enforcement which it plans to extend until the end of 2012.

Meanwhile, the EU has launched an investigation into whether Chinese plastic bag manufacturers are avoiding high EU import tariffs by channelling exports through a single firm that is subject to lower duties.

The Commission said it has evidence that anti-dumping measures imposed on imports are being "circumvented" by a major Chinese firm, leading to unfair trading.

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