According to the currently effective Customs Anti-Smuggling Act (“CASL”), penalties for certain violations may be reduced or waived if the circumstances are deemed minor. The criteria for such reductions or exemptions are provided in the Standards for Penalty Reduction in Customs Anti-Smuggling Cases (the “Standards”).

  Under the current Standards, penalties apply to events such as smuggling goods for import or export and unloading, transporting, receiving, concealing, purchasing, or reselling smuggled goods.[1] However, if the after-duty value of imported goods does not exceed TWD 5,000 (about USD 150), the penalty is waived.

  On the opposite, if a traveler proactively declares imported goods that infringe on patents, trademarks, or copyrights and are not genuine parallel imports upon entry into Taiwan, they are subject to a fine up to three times the value of the declared goods. Furthermore, the goods will be confiscated.[2] Simply said, no waiver applies when travelers declare infringing items.

  Comparing the above two stipulations, an unjustifiable disparity generates - smuggled IPR-infringing goods are exempt from penalties while the voluntarily declared ones are not. Specifically, if the smuggled imported goods infringe on IPRs with the after-duty value not exceeding TWD 5,000, no penalty is applicable. Conversely, where the individual traveler brings into Taiwan and voluntarily declares to the customs of such infringing goods, there is not provision as of today to exempt the penalty.

  In addition, the customs do not levy taxes on the imported goods entering the local market. This is a loss of governmental financial income.

  To combat IPR infringement and strengthen border control measures, the customs introduces a revision. Penalties will apply to importation of smuggled goods, as well as their purchase and resale, if they infringe on IPR. This is to ensure a more balanced enforcement approach.

  Legislatively, Article 4 of the Standards will be amended. Under the amendment, even if the value of the goods does not exceed TWD 5,000, penalties will still be imposed if the goods infringe on patents, trademarks, or copyrights and are not genuine parallel imports.

  Yet, interestingly, how the customs enforce the new law can be challenging because the customs may lack the required level of knowledge to distinguish between genuine and counterfeit goods.

  Last but not least, willfulness or negligence remains required for a penalty. Therefore, customs does not penalize a traveler unknowingly wearing counterfeit apparel upon entering Taiwan if it is done without negligence.