India and Brazil Request Consultations at WTO Over EU Seizures of Generic Medicines

Mike Palmedo
May 13, 2010

Yesterday, India and Brazil requested formal consultations with the European Union (EU) concerning its repeated seizures of generic medicines.  This request for consultations is the first step in the World Trade Organization (WTO) dispute settlement process.  If the parties do not reach a negotiated conclusion, a Dispute Settlement Panel could be formed to arbitrate the dispute and - if it finds a violation has occurred - authorize retaliatory measures. 

European customs agents seized at least 17 shipments of generic versions of medicines patented in the EU, often at the request of companies that held the European patents.  However, these medicines were not patented in either their country of origin (India) or their destinations in various Latin American and African countries.  In one instance, a shipment of AIDS medicines purchased by the Clinton Foundation was seized by Dutch authorities as it travelled from India to Nigeria via the Netherlands. 

India and Brazil argue that such seizures of goods in transit are illegal under the WTO.  The EU’s Council Regulation (EC) No 1383/2003 authorizes customs officers to seize shipments “when goods are suspected of infringing an intellectual property right.”  This applies both to goods being imported into the EU and to goods transshipped through EU ports to other destinations.  Brazilian Ambassador Roberto Azevedo told a Third World Network reporter that this aspect of the Council Regulation violates GATT Article 5 (guaranteeing freedom of transit) and GATT Article 10.3 (on the administration of trade regulations), as well as many different provisions in the TRIPS Agreement. 

Informal talks on this dispute have been underway for months, and the EU seems to recognize that some change to its regulation is necessary to comply with international law.  EU Spokesman John Clancy told Bloomberg that “We have signaled our intention to modify our legislation.” However, the request for consultations by India and Brazil seems to indicate their growing impatience with these informal talks.

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