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Farewell, China: Ukraine does not let parcels with Xiaomi gadgets

Author : Angelina Avdeyeva

10:04, 30 May 2017
Farewell, China: Ukraine does not let parcels with Xiaomi gadgets

Author : Angelina Avdeyeva

Ukrainian Customs Service, as well as the Russian one, does not allow the production of this brand

10:04, 30 May 2017

Read the original text at 112.ua.

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In Russia, a scandal erupts between private individuals ordering Xiaomi smartphones for personal use in China and a customs office that does not allow the production of this brand across the border at the request of the Russian representative of the right holder. The situation has become so widespread that some Chinese sites, for example Gearbest, have temporarily suspended sending of Mi-smartphones to Russian customers, and Russia became the first country where such a situation became possible. But about two weeks ago, the Ukrainian community of Xiaomi began receiving complaints from private individuals that some of their individual orders (parcels) suffered the same fate. Would the Ukrainian users of foreign Internet shops expect the same sad fate as the Russian ones?

What happened in Russia?

At the end of last month it became known that the Russian customs, at the request of the representative of the Xiaomi owner in Russia, began blocking the parcels of individuals to the country and returned them back to foreign online stores. The right holder in the territory of the Russian Federation is "Smart-Orange" company, which cooperates with RDC Group - the official distributor of Xiaomi.

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The phenomenon is becoming more massive - special groups in social networks appear in Russia, where users write about their problems with the parcels. Not only Xiaomi devices got under the "ban" - it became known that smartphones Sony, Philips and even Chuwi, also reach their new owners not in 100% of cases.

Experts say about violation of Russian legislation by the customs service. The procedure for "determining" the goods as counterfeit is as follows. Customs officers send the photo of the devices to the rightholder, who determines that the goods are counterfeit, and in this subjective manner initiates its return to the sender. Custom service explains its actions by the requirements of the Universal Postal Convention, art. 18 of which regulates the ban on counterfeit and pirated products. In order to determine the parcels pirated, it is guided by instructions from the regional rights holder.

Under Russian law, counterfeit goods can be recognized only by the court, but not by customs, and even more - not by photography.

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In response to the actions of the custom service, fans of Xiaomi in Russia have created a petition and hope that it would be considered by the customs service, and a dubious ban would be lifted. In addition, the letter was sent to Xiaomi, hoping that the company would pay attention to the current situation.

The purpose of the distributor is to block all Xiaomi shipments to the country, which are not carried out through their "official" channel. The company assures that under the guise of private individuals, devices are ordered by "wholesalers" and then resold in the country. In addition, the representative of the copyright holder insists that not all equipment sold in China is suitable for use in their country - after all, the supported communication standards might differ significantly, the quality control should be slightly different, and it spoils the users' impressions of the brand.

In parallel with these events, Xiaomi reported about its plans to actively combat against "gray" supplies in Russia, and in late April the company entered the market of this country. According to the company, there are about half of counterfeit devices of the brand in Russia. In addition, Xiaomi says that since Smart Orange is not an exclusive distributor of products in Russia, in the future, perhaps other companies will have to coordinate their supplies with Smart Orange.

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The current situation in Russia might become a precedent on a global scale. Previously, Chinese brands did not fight their own parallel imports and were calm about alternative supplies from foreign online stores. And this, in turn, contributed to the global expansion of goods from the Middle Kingdom.

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And what about Ukraine?

Since the end of April, Ukrainians, who buy products of this brand "directly" from China, have also complained that they cannot receive parcels with Xiaomi equipment, ordered in foreign online stores - this was reported by a representative of one of the Chinese shops, Connected with the Ukrainian community. Buyers specify that the postal service has warned them that the parcels are sent back to the sender.

As of the beginning of May, In the all-Ukrainian community of Xiaomi "Mi Community" has received several complaints from the individuals. "People think that we are monopolizing the market, but this is not true, we have nothing to do with the ban," says Dmytro Lupych, coordinator of the Ukrainian community.

Apparently, we are not talking about the same mass phenomenon as in Russia, or we have not yet acquired such a serious scale.

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In Ukraine, Xiaomi representative is Olexander Shevchenko, information about whom is listed in the official register on the website of the State Fiscal Service (GFS).

The Ukrainian Customs Service confirms that, in accordance with the current legislation, only this repersentative (and only he) can allow or prohibit, block delivery of the parcels on the rights of a representative of the rightholder. The delay can reach 10 days. Then they make a decision – either the rightholder appeals to the court, or does not prevent the customs from completing the customs clearance.

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We applied for a comment to the representative of the rightholder - whether there was a request on his part and whether it would concern private shipments. According to him, there is a request, and it corresponds to Article 398 of the Customs Code of Ukraine, but parcels containing 1-2 items of goods are not banned. In addition, Olexander Shevchenko said that in parallel with him, other persons somehow registered the same rights.

There is no information about them in the register.

Why is this happening?

This situation might happen not in all countries of the world, but only in those where the so-called national principle of exhaustion of rights operates (like in Russia), as opposed to the international one (which, in particular, operates in Europe).

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But briefly, Ukraine does not have intellectual rights mechanism, although Verkhovna Rada recently planned to adopt an amendment that would lead us to the national principle. And the actual availability of the customs register, in which the protected objects are brought in, brings us to the Russian practice, where the producer, not the buyer, decides where his goods can be sent. As a result, it turns out that if a certain country has a registered rightholder representative, it can determine who has the right to import goods into the country and thus fully control imports, prices and assortment in the country. And this applies not only to those who import machinery and other goods on a commercial scale. This can also happen to private individuals, as it is now happening with Xiaomi, for example.

Why now?

The representative of Xiaomi copyright holder in Ukraine appeared long ago to combat parallel shipments on a commercial scale. But it is interesting that the problems with the parcels of individuals in Ukraine and Russia began about the same time, which might indicate on the possible coordination of the described actions. In this context, the above-mentioned position and Xiaomi's comment on plans to combat "gray" supplies fit well. If the ban on purchases for individuals is part of this plan, rather than the initiative of official distributors, then it can be said that this is not a Russian precedent, but a new strategy for a Chinese company, the consequences of which are hard to imagine. We also asked the company to comment on the situation, but there is no answer yet.

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Mi-community in Ukraine

Dmytro Lupych, coordinator of the Mi-community in Ukraine, says that the community supports the fight against large supplies of counterfeit goods, but at the same time stands for an open, free and competitive market, observance of civil and private rights to purchase goods. Given that the standard of living and purchasing power in Ukraine are low, people should have an alternative opportunity to buy in those places, which give more profitable opportunities, this is their right. "The ban on imports is a monopoly of the market," the community says.

Vladyslav Chechetkin, head of Rozetka.ua

Ukrainian online retail speaks in support of the free market by analogy with the European one. According to Vladyslav Chechetkin, this situation is beneficial to those who are trying to lead the ban process, and ultimately lose everything: "The brand loses its share because it becomes more expensive. Buyers pay more because there is no competition. The budget loses money, because legal ways are impossible, so everyone would use the illegal ones. Corruption would grow, because it would be necessary to smuggle."

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The Association of Information Technology Enterprises of Ukraine comments on the situation with restraint and says that there is no evidence of copying Russian experience in our country, and believes that the Ukrainian market will not follow the Russian way.

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