Thursday 21 May 2020

Planned changes to fees charged by the New Zealand Customs Service – what’s new and what does it mean for IP rights holders?

The New Zealand Customs Service (Customs) has fixed fees that it charges for clearing imported and exported goods (goods clearance fees). Those fees are set to change, and this will impact intellectual property (IP) rights holders who have border protection notices in New Zealand.

Following a cost recovery review in 2019, changes to Customs’ goods clearance fees were scheduled to take place on 1 June 2020. [1] The scheduled changes included:

  • increases on transaction fees charged for imported and inward cargo
  • decreases to most transaction fees charged for exports  
  • an increased hourly rate charged for services provided outside of standard hours
  • the introduction of recovery of certain costs incurred by Customs’ services for IP rights holders, including recovery of costs for storing and disposing of goods, and legal proceedings costs
  • the removal of the $5,000 security bond required by Customs upon lodgement of a trade mark or copyright protection notice.

Border protection notices 101

IP rights holders can lodge border protection notices (also known as ‘Customs Notices’) with Customs. A Customs Notice is a formal request for Customs to detain any imported goods that infringe specific IP rights.

Customs Notices can be filed to protect the following:

  • Registered trade marks: Customs will detain any counterfeit goods that use an identical or confusingly similar mark on the same or similar goods covered by the relevant trade mark registration specified in the Customs Notice.
  • Copyright works: Customs will detain any counterfeit goods that feature the same copyright work, or are substantially similar to the copyright work, specified in the Customs Notice.

The current, but soon to change, process requires a security bond of $5,000 to be paid by the IP rights holder to Customs when a first Customs Notice is lodged. The purpose of the security bond is to cover Customs’ potential costs of dealing with any significant importations of counterfeit products relating to a Customs Notice. But security bonds have rarely been used in the past and the upfront outlay of $5,000 does deter some IP rights holders from lodging Customs Notices in the first place.

Changes deferred until June 2021

In March this year, due to disruptions caused by COVID-19, the Government agreed to defer the fee reviews of all aviation and border sector agencies for 12 months.

The fee changes mentioned above are now deferred until 1 June 2021 – except for removal of the security bond. The Government agreed to continue with the removal of the security bond, as it is a change that will help to protect the IP of businesses and local operators.

Security bonds no longer required and existing bonds to be returned!

From 1 June 2020, IP rights holders will no longer have to pay $5,000 to lodge a Customs Notice. Going forward, no security bond will be required.

Instead, Customs will recover the costs of storing/disposing of infringing goods and legal proceedings directly from IP rights holders. We will have to wait and see how the new fee recovery process will work in practice.

For existing security bonds held by Customs, IP rights holders (and their agents) can expect to hear from Customs over the coming months regarding the process for returning their security and providing new indemnity forms.

We can help

If you have any questions about border protection measures, or any issues relating to the sale of counterfeit goods that are causing problems for your business both in New Zealand and around the word, please get in touch with us and we’ll let you know how we can help.