Criminal Court Acknowledges Customs Powers to Inspect and Detain Goods in Transit

Intellectual and Industrial Property Right (IPR) holders have, in their local legislation and in international treaties, different tools to combat piracy and anti-counterfeiting.

These may include recall of the so-called border measures which consist of quick procedures to avoid Customs releasing goods that they are suspicious is infringing IPRs.

In Argentina, border measures are regulated by (i) Law 24,425 that ratified the TRIPS Agreement, which, under section 51 provides that members shall adopt procedures to enable a rights’ holder, who has valid grounds for suspecting that the import of counterfeit trademark or pirated copyright goods may take place, to lodge an application in writing with competent authorities, be they administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods and, at the same time, (ii) by article 46 of Law 25,986 (as amended by Law 26,458), which prohibits the import or export of goods which infringe IPRs, under either suspensive or definitive operations.

In the case under analysis,[1] a truck in transit in Argentina transporting toys from the Republic of Paraguay to the Republic of Uruguay was inspected by Customs at the border crossing in Salto.

On the basis that the toys might infringe IPRs, the truck was detained to formally consult with the IPR holder in question, who later confirmed that the goods were counterfeit. Therefore, Customs detained the goods and formally denounced the operation before the Federal Criminal Courts.

Both the First Instance Federal Court and the Court of Appeals in the City of Paraná, Province of Entre Ríos, dismissed the case. Said decisions were appealed by the Prosecutor General before the Criminal Court of Cassation (the “Court of Appeals”).

The Court of Appeals accepted the appeal introduced by the Prosecutor General, revoked the lower court’s decision and ordered to continue with the prosecution of the case.

The Prosecutor General mainly stated that goods in transit constitute imports, as imports not only comprise operations to be nationalized in Argentina, but also goods in transit which are a particular type within the import genre. Moreover, the Prosecutor General stated that article 46 of Law 25,986 expressly prohibits the import or export of goods which infringe IPRs, under either suspensive or definitive operations, which, in his opinion includes suspensive importations in transit.

As previously mentioned, the Court of Appeals revoked the lower’s court decision.

In so deciding, the Court of Appeals first analyzed whether the case under examination was within the scope of an import. To that end, it defined import as the bringing of goods into any territory under Argentine sovereignty in which a uniform customs duties system and economic prohibitions on imports and exports are applied, concluding that the case under analysis is considered an import, stressing that said conclusion is not altered by the fact that the goods are in transit to another country. Moreover, the Court of Appeals upholds the Prosecutor General’s argument in the sense that a suspensive in transit operation constitutes an import as the latter not only comprises imports to be nationalized in the country.

On the other hand, the Court of Appeals concluded that the case under analysis was also within the scope of the absolute prohibition set forth in article 46 of Law 25,986 which prohibits the import or export of goods under either suspensive or definitive import which infringe IPRs.

For all the above, the Court of Appeals accepted the appeal introduced by the Prosecutor General, revoked the lower court’s decision and ordered to continue with the prosecution of the case.