Chapter IV Investigation and Treatment According to Functions and Powers

Article 21 The Customs shall monitor and supervise imported and exported goods. If it finds any imported or exported goods involve any IPR filed with the GAC and the use of relevant IPR by the importer or exporter or manufacturer has not been filed with the GAC, it may require the consigners or consignees to declare the conditions of IPR of their goods and submit relevant documents within the prescribed period.

If the consignees or consignors fail to declare the conditions of IPR of their goods and submit relevant documents in accordance with the provisions of the preceding paragraph, or the Customs has reasons to suspect the said goods of infringing the IPR filed with the GAC, it shall suspend the release of the said goods and notify the IPR holder in writing.

Article 22 IPR holders shall give a reply according to the following provisions within three working days upon receipt of the Customs' written notice prescribed in Article 21 herein:

(1) If believing relevant goods have infringed their IPR filed with the GAC and requesting the Customs to detain the said goods, they shall submit the written application for detaining the suspected infringing goods and provide guarantee according to Article 23 or 24 herein; or

(2) If believing that relevant goods have not infringed their IPR filed with the GAC, or not requesting the Customs to detain the suspected infringing goods, they shall give a written statement of the reasons thereof to the Customs.

The IPR holders may inspect relevant goods upon consent of the Customs.

Article 23 The IPR holders that request the Customs to detain the suspected infringing goods in accordance with Item 1 in Paragraph 1 of Article 22 herein shall provide guarantee to the Customs according to the following provisions:

(1) If the value of the goods is less than 20,000 yuan, a guarantee equivalent to value of the goods shall be provided;

(2) If the value of the goods is between 20,000 yuan and 200,000 yuan, a guarantee equivalent to 50 percent of the goods' value shall be provided and the amount of the guarantee shall be no less than 20,000 yuan; or

(3) If the value of the goods exceeds 200,000 yuan, a guarantee of 100,000 yuan shall be provided.

The IPR holders that request the Customs to detain the goods suspect of infringing the special use right of their trademarks in accordance with Item 1 in Paragraph 1 of Article 22 herein shall provide an overall guarantee to the GAC according to Article 24 herein.

Article 24 The IPR holders with their special use right of trademarks filed with the GAC may submit to the GAC the letter of guarantee issued by a bank or a non-bank financial institution upon approval of the GAC, to provide an overall guarantee for their application for Customs protection of their special use right of trademarks.

The amount of the overall guarantee shall be equivalent to the sum of expenses for warehousing, safekeeping and disposal of the suspected infringing goods that the IPR holders applied to the Customs for detainment in the previous year. If the IPR holders have not applied to the Customs for detaining any suspected infringing goods or the expenses for warehousing, safekeeping and disposal were less than 200,000 yuan in the previous year, the amount of the overall guarantee shall be 200,000 yuan.

From the date of use of their overall guarantee approved by the GAC to Dec. 31 of the year, the IPR holders that request the Customs to detain the imported or exported goods suspected of infringing their special use right of trademarks filed with the GAC according to Article 16 of the Regulations do not need to provide any guarantee separately, unless the IPR holders fail to pay relevant expenses according to Article 25 of the Regulations or bear liability of compensation according to Article 29 of the Regulations and the GAC issues the notice on bearing the guarantee liability to the guarantors.

Article 25 Where an IPR holder submits an application according to Item (1) in Paragraph 1 of Article 22 herein and provides the guarantee according to Article 23 and 24 herein, the Customs shall detain the suspected infringing goods and notify the IPR in writing. If the IPR holder has not filed any application or provide the guarantee, the Customs shall release the goods.

Article 26 The Customs that has detained the suspected infringing goods shall send the detainment voucher for the detained suspected infringing goods to the consignees or consignors.

The consignees or consignors may inspect the goods detained by the Customs upon consent of the Customs.

Article 27 The Customs shall, after detaining the suspected infringing goods, conduct investigation on the said goods and other relevant situations. The consignees or consignors and IPR holders shall assist the Customs with the investigation and provide relevant information and evidences truthfully.

The Customs that conducts investigation on the suspected infringing goods may request the competent IPR department to provide consulting opinions.

Where the IPR holder and the consignees or consignors reach an agreement on the suspected infringing goods, provide a written application with the relevant agreement attached and request the Customs to release the said goods, the Customs may terminate its investigation unless it holds there is any suspected crime.

Article 28 Where the Customs investigates the suspected infringing goods but fails to confirm whether the goods infringe the relevant IPR or not, it shall notify the IPR holder and the consignees or consignors in writing within 30 working days upon detainment of the said goods.

Where the Customs fails to confirm whether the goods infringe the relevant IPR or not, the consignees or consignors may request the Customs to release the goods after providing a guarantee equivalent to the value of the goods. If the Customs agrees to release the said goods, it shall handle the issue according to the provisions in Paragraph 2 and 3 of Article 20 herein.

Article 29 Where the Customs fails to confirm whether relevant goods infringe the IPR of the IPR holder, the IPR holder may apply to the People's Court to order the infringement be stopped or the property be preserved according to Article 23 of the Regulations.

Within 50 working days upon detainment of the suspected infringing goods, the Customs that has received the written notice from the People's Court on assistance in detaining the relevant goods shall give assistance. If the Customs has not received the notice from the People's Court on assistance with detainment, or the IPR holder request the Customs to release the relevant goods, the Customs shall release the said goods.

Article 30 Where the Customs has made the decision on confiscating the infringing goods, it shall notify the IPR holder in writing of the following information to the Customs knowledge:

(1) The name and amount of the infringing goods;

(2) The name of the consignees or consignors;

(3) The declared import or export date of the infringing goods, the date of the detainment by Customs and the date when the punishment becomes effective;

(4) The origin and destination of the infringing goods; and

(5) Other information concerning the infringing goods that the Customs may provide.

If the People's Court or the competent IPR departments need the Customs' assistance in obtaining any evidences relevant to the imported or exported goods when handling the infringement disputes of the parties concerned, the Customs shall give assistance.

Article 31 In case the Customs suspects any articles carried or mailed in or out the border by an individual of infringing the IPR as prescribed in Article 2 of the Regulations, and exceed the reasonable amount or the amount for personal use, it shall detain such articles, unless the passenger or receiver or sender announces abandoning the said articles to the Customs with consent from the Customs.

The IPR holder shall give assistance when the Customs is conducting investigation on the infringing articles. If the inward/outward passengers or the receivers or senders of posts believe their articles detained by the Customs do not infringe the relevant IPR or are for personal use, they may give a written statement thereof to the Customs and provide relevant evidences.

Article 32 Where the Customs' investigation confirms imported or exported goods or entering or exiting articles have infringed any IPR, such goods or articles shall be confiscated by the Customs pursuant to the provisions in Paragraph 1 of Article 27 and Article 28 of the Regulations; while if it is impossible to identify the parties concerned, the Customs may confiscate the said goods or articles three months after the day the Customs makes relevant announcement.

Where any IPR infringement act involving import and export goods are suspected of any crime, the Customs shall transfer the case to the public security authority.