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Cablegate: Estonian Customs Conference: Enforcing Ipr at The

VZCZCXRO0371
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTL #0113/01 0801201
ZNR UUUUU ZZH
R 201201Z MAR 08
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 0563
INFO RUEHMO/AMEMBASSY MOSCOW 2586
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 03 TALLINN 000113

SIPDIS

DEPT FOR EUR/NB KATHERINE GARRY
DEPT PLEASE PASS TO USTR FOR LMOLNAR
DHS FOR ICE AND CBP
HELSINKI FOR JANE MESSENGER
DOC FOR ITA/MAC/OIPR CASSIE PETERS AND ITA LEAH MARKOWITZ
DOC PLEASE PASS USPTO

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ETRD KIPR ECON EUR EN
SUBJECT: ESTONIAN CUSTOMS CONFERENCE: ENFORCING IPR AT THE
BORDER


1. (SBU) Summary: A seminar sponsored by the U.S. Patent
and Trademark Office (USPTO) and Embassy Tallinn brought
together Estonian, Finnish and U.S. customs inspectors in
the city of Narva, on the Russian border, for two days of
discussion on intellectual property rights (IPR) and border
enforcement. Participants heard from the Ambassador and
key local leaders about the importance of IPR protection
for innovation. Speakers displayed samples of seized
counterfeit and copyright infringing goods, discussed risk
identifiers for suspect shipping, and led the participants
in panel discussions and case studies of IPR infringement
scenarios. The event received press coverage from national
TV as well as newspapers in Tallinn and Narva both in
Estonian and Russian, and supported Tallinn's MSP goal of
promoting economic growth and prosperity. Russian Customs
officials were invited, but did not attend. End Summary.

If You Can Make It, They Can Fake It

2. (U) On March 11-12, the USPTO and Embassy hosted an IPR
border enforcement seminar for over 40 Estonian customs and
border inspectors. This year's conference, the third
funded and supported by the USPTO in Estonia since 2006,
was held in the Estonia's eastern city of Narva. As the
easternmost checkpoint in or out of the European Union
(EU), Narva was an ideal location, as Estonia seeks a
greater share of international trade into the EU from the
Far East. Experts from the Department of Homeland
Security, Customs and Border Protection (DHS/CBP), DHS
Immigration and Customs Enforcement (ICE), the Finnish
National Board of Customs, and the Estonian Tax and Customs
Board showed numerous samples of seized pharmaceuticals,
fashion accessories, clothing, etc. While counterfeiters
once concentrated almost exclusively on high-end luxury
goods, today's makers of bootleg products produce anything
and everything they can make a profit on. Samples included
fishing rods, perfumes, energy drinks, cigarettes and
branded lighters, light switches, circuit breakers,
batteries, cellular phone parts, toothbrushes, toys of all
descriptions, slippers, track suits, and all manner of
other garments ... you name it. U.S. Customs officials
estimated that over 80 percent of the counterfeit goods
they seize originate in China.

3. (U) Senior officials from Finland's National Board of
Customs and the port of Kotka outlined many of the risk
indicators they look for both from shipping and labeling
patterns. (Note: They estimate that 600,000 containers
transit the Kotka port each year, or roughly 30% of all
goods passing into Russia. End Note.) Red flags during
examination of paperwork include: inconsistencies in bills
of lading, suspect senders, brokers or receivers,
suspicious routes (especially via Dubai), undervaluation of
merchandise, and other indicators.

4. (U) Finnish Customs also outlined indicators they focus
on during physical inspection, include co-mingling of
different brands shipped in the same container, spelling
mistakes on packaging, mismatched labeling or product
sizes, luxury products of poor quality, and many other
identifiers that tip off seasoned inspectors. One amusing
case involved a shipment of over 54,000 units of empty tin
cases for Cognac. The shipment was transiting Finland en
route to Russia from China, in violation of geographical
indicator (GI) rights. DHS/CBP and DHS/ICE confirmed that
they look for many of the same risk indicators when
inspecting shipments.

Working with Rights Holders, and Border Inspection Tour

5. (U) Speakers from all three countries said they will
typically send digital photographs of seized goods to
legitimate rights holders for expert analysis of the
workmanship and labeling of the product. Goods confirmed
to be counterfeit are destroyed, and fines may be assessed.
All stressed that close cooperation with rights holders was
essential, especially in identifying rare or technical
goods, and very high-quality fakes. In one key difference,
however, DHS/CBP itself makes the final determination of IP
infringement by an importer, whereas in Estonia, customs
officials depend heavily upon the rights holder to make the

TALLINN 00000113 002 OF 003


actual determination that an IP rights infringement has
occurred. At this point, Estonian customs will refer the
case to investigators, who in turn will refer the case to
prosecutors if necessary. (Note: Estonian Customs'
dependence on right holders is due to limited cooperation
between them. Industry considers the Estonian market
insignificant, and that small quantities of counterfeit
goods do not pose a major economic loss for them. In the
rare cases that industry makes the effort to provide expert
opinion, Estonian Customs is inclined to give heavy weight
to it. End Note.)

6. (U) In keynote remarks at the conclusion of day one of
the seminar, the Ambassador noted the vital role that
trademark and copyright protection has in spurring
innovation, and adding value to the economy. The Finnish
Ambassador, Jakko Kalela, echoed these remarks, as did the
Mayor of Narva, and an Estonian Member of Parliament (MP)
who serves on the Economic Affairs Committee with
responsibility for IPR issues.

7. (U) The presenters shared best practices based upon
their collective experience examining import shipments,
working with reputable and suspect shippers, and
identifying risk patterns in trade. The Estonian
participants clearly demonstrated that they are seeing many
of the same tricks by illegal importers, and have developed
similar techniques for countering trademark violations,
even though their market is much smaller than neighboring
Finland and Russia.

8. (U) Day two of the conference began with a tour of the
Narva Customs and Border Control checkpoint. Estonian
Customs showed all participants their checkpoints for
pedestrians, private vehicles and commercial trucks,
including radiation detectors, vehicle x-rays, and short-
term warehousing and cold storage for goods seized pending
final disposition. Panelists followed this tour with
sessions on copyright issues. All participants noted the
decrease of pirated copyright materials crossing borders,
due largely to the fact that pirated materials have moved
to the Internet. Also, Finland's 'zero tolerance policy'
has almost wiped out Estonian production of bootleg CDs and
DVDs for 'suitcase pirates', as the policy makes owning
even one copy of pirated materials a crime. In Estonia,
all copyright materials seized by Customs are examined by
the Estonian Organization for Copyright Protection (EOCP)
which represents right holders. The cooperation between
Customs and EOCP serves as a model also for trademark right
holders.

9. (SBU) In cooperation with Embassy Moscow and the
Russian Embassy in Tallinn, Embassy invited Russian customs
officials to participate in the conference and USPTO
offered to pay all expenses for their participation.
Unfortunately, Russian Customs declined to send any
representatives to the conference. The Russian Consul
General in Narva, however, appeared at the opening of the
conference and the welcome dinner, and noted that Customs
inspectors from Ivangorod - the Russian border point across
the Narva river - would have liked to participate. All
participants said that Russian Customs Officials could have
greatly contributed to the information exchange, had they
been present.

10. (U) Comment: DHS/CBP and ICE confirmed that our
Estonian colleagues' technology and risk analysis for
inspecting goods for import or transit are very much on par
with U.S. standards. The seminar allowed over 40
inspectors from all four regions of Estonia to exchange
best practices with their Finnish and U.S counterparts.
The training indicated the need for closer international
cooperation between Customs Agencies, especially in light
of the rising tide of imports and transit goods -
legitimate and counterfeit alike - from China. In written
evaluations, participants rated the panel discussions and
cases studies very highly. End Comment.

11. (U) Post would especially like to thank Embassy
Helsinki and Embassy Moscow for their assistance organizing
this conference.

TALLINN 00000113 003 OF 003

12. (U) This cable was cleared by USPTO and DHS.

PHILLIPS

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