Parallel Imports In Cambodia

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SMCS Risk has been working with brand manufacturers and brand distribution companies in Cambodia since 2006 and has been constantly asked the question – “Are parallel imports illegal in Cambodia and is the current system fair?”

A parallel import, often referred to as grey product and implicated in issues of international trade, and intellectual property, is a non-counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are only goods that are genuine and authentic and do not include anything that is copied, re-branded or changed in any way from its original format.

Parallel importing raises a number of legal concerns for manufacturers/brand owners, importers, distributors and consumers in Cambodia and although Article 11 (a) of Cambodia’s Trademark Law stipulates a right on registered trademark owners to the exclusive use of their trademarks in relation to goods their marks are registered for, both manufacturers, importers and distributors, need to be aware of their rights and obligations under both intellectual property, trademark and consumer law in Cambodia, simply because uncertainty remains about actual enforcement by authorities against parallel imports under Cambodia’s Trademark Law.

Cambodian Authorities will state that the law in Cambodia prohibits the trade of parallel imports, however there is still a systematic abuse of the law and lack of enforcement, with many brands and products being openly imported and distributed in Cambodia by companies who do not have the agreements with the brand manufacturers or owners. A recent article in the Cambodian Phnom Penh Post highlights issues some brands in the auto trade are facing.

The primary reasons for engaging in parallel importing are that the product is available overseas for a lower price than in Cambodia, or that the product is not available in Cambodia through official channels.

Whilst the parallel import trade in Cambodia is driven by a culmination of a monetary benefit and uncertainty around the enforcement of breaches, brand owners and distributors should register their trademark to obtain protection against parallel imports.

For information on how you can register your trademarks and protect your brands in Cambodia, please contact SMCS Risk.