Fake products are a big concern in Brazil. The government and companies claim that imports of counterfeit goods result in less jobs and tax collections. This article explains more about this type of importation.
At first glance, t-shirts from Adibas, shoes from Nikke and HiPhones may seem harmless to the Brazilian economy and even though these names might sound funny, they are responsible for compromising trademark rights, upsetting big corporations and the Brazilian government.
Every year, tons of counterfeit goods enter Brazil. Data from the Industry Federation of Rio de Janeiro (Firjan) suggest that this market is worth an estimated USD 2.2 billion per year. This not only impacts on tax collection but also on job generation - piracy currently impedes the creation of nearly 2 million positions.
According to Firjan, the textile industry is one of the areas that suffers from the largest impact of counterfeit importation. Firjan claims that what they call piracy steals 20% of the sales from this sector, leading to an annual estimated loss of BRL 1.56 billion. The electronics, medical and cosmetics markets are also listed as being affected.
Most counterfeit goods that enter Brazil either come from China or Paraguay. However, Uruguay and Bolivia are also exporting fake products to Brazil on a large scale.
Fiscalization and Punishments
Various companies promote actions to stop the sale of counterfeit goods in Brazil. For example, Anvisa, the National Health Surveillance Agency, complies lists of fake health-related products, how to detect them, how to identify original products and which manufacturing batches are counterfeit.
However, the main efforts to reduce the sale and import of counterfeit products are made by the Federal Revenue who are responsible for Brazilian customs. The Federal Revenue frequently promotes campaigns against piracy and confiscates counterfeit cargo.
How Counterfeit Imports Are Dealt With
If custom authorities identify fake products they will retain them and contact the holder of the trademark rights. After the notice, the company then has a period of 10 days to present a complaint and ask for the judicial apprehension of the goods. If this complaint does not happen and all the other import conditions have been met then goods are free to be customs cleared.
Brazilian legislation also defines that the import of counterfeit goods can be classified as smuggling. Consequently, guilty parties can be imprisoned from two to five years. Other sanctions and punishments relating to intellectual property and trademark violation can be applied as well.
The “Legal” Import of Counterfeit Goods
First and foremost remember that importing counterfeit goods is illegal. A brand, model or item is usually protected by trademark laws and cannot be sold without consent of the rights’ owner.
In some cases, goods that are under intellectual protection abroad are considered part of the Brazilian public domain. Essentially, patents and trademarks are only valid in the country where they originated, unless they are also registered in other countries. If a product is not patented or trademarked in Brazil the product can be sold without restrictions.
Due to international agreements, companies have a certain amount of time to claim their rights in other countries after the patent requirement happened. So the procedure when considering if certain products can be imported or not is to contact the entity responsible for patents in Brazil: Instituto Nacional da Propriedade Industrial (INPI), or National Institute of Industrial Property.