Large seizure of counterfeit cigarettes
At the end of March 2001, our Dubai office was informed by a source in Egypt that a container of cigarettes bearing our client's brand was currently in Port Said, rumoured to be bound for Bulgaria. No further information was available at that stage - were the cigarettes counterfeit? where were they being stored and, more importantly, when would they be leaving Port Said?
We received a faded bill of lading a few hours later setting out the shipment details that suggested the consignment had come from Shekou in China. The fact that it had originated in China was a good indication that the cigarettes were counterfeit - China is a well-known manufacturing base for all kinds of counterfeit goods including cigarettes.
The source was asked to confirm that this same container was being used for the onward shipment, the name of the vessel being used for the shipment and also the routing of the vessel. The initial report was that the container was due to leave Port Said within 24/48 hours. Knowing the difficulties of taking enforcement action in Port Said at such short notice, we took the view that seizure in Bulgaria (the destination) was more likely through our client's contacts.
That same day our source confirmed that the cigarettes had been transferred to another container and were allegedly leaving for Varna in Bulgaria. We were given the vessel name and the container number. Before we could set up a seizure in Bulgaria this information needed to be verified. Had the vessel left Port Said? What routing was the vessel taking? Was the new bill of lading for this container available? What brands of cigarettes were on board?
With the vessel name and container number we were able to contact our investigation division in London to confirm the routing of the vessel.
Investigation
Our information services immediately checked their closed maritime databases for details regarding the vessel. One data base confirmed that the vessel, carrying the identified container of suspect counterfeit cigarettes, had indeed left Port Said (although 2 days earlier than the date indicated on the bill of lading) and was sailing via Istanbul, Turkey, Thessaloniki, Greece and Marsaxlokk, Malta for onward transit to Burgas in Bulgaria.
Another data base was, however, showing that although the vessel had sailed, the suspect container was still in Port Said! Our information services therefore contacted the local Community System in London and managed to persuade them to check with the freight terminal in Port Said to verify that the container had been loaded aboard the vessel on the date in question.
As the suspect container was to be transshipped in Malta, our information services contacted the local Maltese shipping operator and ascertained the exact schedule and movements of the container. The suspect container was scheduled for transshipment in Malta in 6 days time! It became apparent that the discrepancy in the maritime databases was due to the fact that the shipping agent had deliberately withheld the shipping manifest information. Furthermore, the copy bill of lading presented to our Dubai office turned out to be no more than instructions, from the consignors to the freight company, which were never acted upon!
Our information services also managed to identify the owner of the container using another closed database as well as further details regarding the shipper and receiver of the container.
The information was checked on a daily basis, and our London team kept informed.
London office - seizure in Malta
A two-day transit stop for transshipment in the Malta Free Port provided us with a window of opportunity - the suspect container could be seized then rather than at its final destination! We immediately instructed our Maltese lawyers. They contacted the Chief of Police responsible for monitoring the activities of the Free Port who checked the register of vessels and confirmed the date of arrival of the vessel and suspect container.
The Maltese Chief of Police was, however, initially reluctant to commence criminal enforcement action. The Police had recently had their 'fingers badly burnt' by two seizures of competitors' cigarettes that turned out not to be counterfeit - their reputation was at stake! What proof did we have that this consignment was counterfeit? If it was, why had it not been seized in Egypt? If seized, how quickly could samples be verified? The Police were finally coaxed into cooperation, persuaded by the supporting documentation and a tenacious Maltese lawyer. They waited...
Meanwhile, we liaised with our client's testing laboratory in Europe, arranging for expedited analyses of samples on the allocated dates and results to be returned immediately to the Maltese lawyers.
The vessel entered Malta Free Port one day earlier than scheduled! The police intercepted the unloading and opened the container in the presence of the Customs Officials and a representative of the ship's agents. The container was full of the branded cigarettes. Samples were immediately dispatched by courier to the European laboratory and a swift analysis indicated that the cigarettes were clearly fake.
On the basis of this information the Customs officially seized
723 master cases of cigarettes containing a total of 7,230,00
cigarettes. The Maltese Customs were however demanding a sum
of LM135, 000 (more than £200,000 STG) by way of guarantee
to maintain the detention. The outraged client refused to
pay what they considered to be an unreasonable sum. It was
only after the matter was elevated to the Ministry of Finance,
and EC and TRIPS requirements as to reasonableness of a guarantee
emphasized by the Maltese lawyer, that the required guarantee
was reduced to LM 30,000. The situation was saved and civil
court proceedings filed within the allocated time against
the Bulgarian consignees of the counterfeit cigarettes. These
proceedings are currently underway.
