Biznes&Baltija

December 11, 2001

War on Contraband Expands Scope of Domestic Policy

by Oleg Malinin

The large-scale destruction of record amounts of seized counterfeit cigarettes (almost 25 million) took place yesterday in Ropazi county. This public event, organized by the Coalition for Intellectual Property Rights, served not only as an example of enforcement in action but also to mark a new procedural precedent for trademark protection.

According to Romans Baumanis, CIPR representative in the Baltic states, these consignments of counterfeit cigarettes were seized in connection with three separate criminal cases. This is the first time in Latvian legal history that a ruling to destroy counterfeit products was taken independently of judicial procedures. The decision was made by the Security Police and State Revenue Service, in consultation with legal experts.

The first contraband case came to light in unusual circumstances. Fire broke out in a house in Viski village of Daugavpils district on December 30, 2000, and the homeowner was burned to death. Police found metal containers nearby full of Marlboro and L&M brand cigarettes without the required Latvian excise stamps, totaling 1162 master cases.

On June 6, 2001 almost 5.5 million Benson&Hedges brand cigarettes were found hidden inside the tanks of water boilers during an inspection of MSC Latvija company premises at the Riga Free Port. According to expert analyses by trademark owner British American Tobacco, the seized cigarettes were determined to be counterfeit. Another shipment containing 1598 master cases of counterfeit Benson&Hedges lacking the required state excise stickers was found at the end of last year on the ship "Sea Baltic".

All three criminal investigations were discontinued because no suspects - the owners of the contraband cargoes - were ever identified. While being held at the bonded customs warehouse Spektrs-K, pending their owners' decision as to their further fate, the seized Marlboro, Benson&Hedges and L&M cigarettes were all found to be fake. According to Romans Baumanis, the counterfeits were made in China, but the expeditor of the cargo is listed as an offshore company registered in Gibraltar. In fact these firms are just a façade behind which officially there are no physical persons to incriminate. In this case there is no one to whom to assign any guilt.

Yesterday's incineration ceremony was attended by senior Latvian government and law enforcement officials, diplomats from the EU, Lithuania, Estonia, Russia, US and the European Commission Delegation in Latvia, and the trademark owners of the counterfeited cigarettes. State Revenue Service chief Andrejs Sonciks remarked that this public action demonstrates Latvia's unequivocal position of support for legal businesses, and intolerance of the illegal business on the gray and black markets.

Photo: close-up of Marlboro, Benson&Hedges, Marlboro Lights cartons inside the furnace flames (courtesy EPA - A.F.I.)