IPOPHL’s e-commerce MOU cited as ASEAN example for building online trust, IP awareness

October 18, 2022

The e-commerce Memorandum of Understanding (MOU), which the Intellectual Property Office of the Philippines (IPOPHL) helps implement, has been cited as a best practice in cultivating trust online to deter illicit alcohol trade in the ASEAN region. 

The report titled “Tackling Illicit Alcohol in Southeast Asia” and published in September 2022 by the Transnational Alliance to Combat Illicit Trade (TRACIT), cited the e-commerce MOU as an example that ASEAN members could replicate to combat counterfeit alcohol online.

Putting in place enforcement measures online will be vital as e-commerce is seen to primarily fuel illicit alcohol to its $4 trillion growth in 2022, according to the TRACIT report also co-authored by the Asia Pacific International Spirits & Wines Alliance, the Alliance Against Counterfeit Spirits and the EU-ASEAN Business Council.

The MOU is an agreement among 18 e-commerce platforms, brand owners and industry groups. Signatories aim to establish a code of practice for protecting IP rights online through the development of an efficient notice and takedown procedure and preventive measures.

“The MOU commits platforms to respond in a timely manner, and IP owners commit to taking swift Notice & Takedown steps in [an] attempt to stop counterfeits at source,” the TRACIT report added while noting the MOU’s feedback mechanism. 

To recall, the MOU has led to heightened removals of IP infringing posts on Lazada and Shopee, which are both signatories to the effort.

Aside from these platforms, other signatories include Zalora, the American Chamber of Commerce of the Philippines, British Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines and Philippine Retailers Association, to name a few.

The partnership is a result of IPOPHL’s collaboration under the UK Prosperity Fund ASEAN Economic Reform Program with the British Embassy and consulting firm Rouse.

Beefing up IP enforcement, awareness in ASEAN

The TRACIT report also warned that the ASEAN “is estimated to be the region with the highest consumption of unrecorded alcohol by 2025.”

Citing data from various sources, the report said Myanmar had the highest share of unrecorded alcohol consumption to total alcohol consumption at 66.7% in 2021. For the Philippines, the ratio was at 44.4%, placing it together with Malaysia at 5th with the biggest share of unrecorded alcohol out of nine ASEAN countries monitored. 

In tax leakage value, the Philippines incurred the second biggest loss in illicit alcohol at $438 million*, just a little below the $441 million of Vietnam.

“This has implications on the economic pillar of ASEAN’s Community Vision 2025 that envisions a highly competitive region, with equitable economic development. Moreover, it impairs a number of UN SDGs [United Nations’ Sustainable Development Goals], including… SDG 9 that looks to promote innovation by guaranteeing protected intellectual property…” the report read.

The consequences in illicit alcohol include health risks, deaths, revenue losses to government and increased financial resources diverted to organized crimes as profits from illicit trade are used to finance other illegal activities.

According to TRACIT, factors triggering illicit alcohol include lack of awareness and inadequate penalties and enforcement, among others.

As chair of the ASEAN Network of IP Enforcement Experts (ANIEE), IPOPHL Deputy Director General Teodoro C. Pascua said the Philippines will be working closely with ASEAN’s Customs Enforcement and Compliance Working Group (CECWG).

“ANIEE will draft a work plan this year with the CECWG on information sharing and capacity-building to help customs authorities distinguish counterfeit from original products. We aim to help customs authorities across ASEAN adopt best practices in monitoring and intercepting counterfeit goods across the supply chain,” Pascua said, noting that ANIEE will be engaging ASEAN’s foreign partners from the private sector for the activities. 

“The private sector is critical as they know how best to distinguish their products from fakes. As imitation techniques of counterfeiters have been increasingly more sophisticated, working hand in hand with the private sector through information sharing would make possible the early detection of counterfeits,” said ASEAN Working Group on IP Cooperation (AWGIPC) Chair and IPOPHL Director General Rowel S. Barba.

The AWGIPC and ANIEE are two of several bodies fulfilling the strategic goals and initiatives set out in the ASEAN IP Rights Action Plan 2016 – 2025. The 10-year roadmap aims to transform ASEAN into an innovative and competitive bloc through the use of IP.

* Values were compared using various years and databases. For Myanmar, only beer was taken into account.