The Gray Blog

A Blog dedicated to news, laws and trends involving the parallel market.

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Parallel market resellers and electronic residue fees in Spain

June 13th, 2007 Electronics, Europe, Spain, Taxes none Comments

The Spanish affiliate of LG Electronics, the Korean electronic manufacturer, has renewed its claims that Spain is losing millions of Euros in taxes as a result of parallel market sales. According to LG Spain, the failure to pay import taxes gives parallel market importers a substantial advantage over the authorized reseller.

In addition, LG Spain and its partners, claim that the country is injured because parallel market importers fail to pay electronic residue fees. Under Spanish law all manufacturers and importers of electronics are obligated to register with the Registry of Industrial Businesses for Residues of Electronic Aparatuses and Electronics [Establecimientos Industriales para Residuos de Aparatos Eléctricos y Electrónicos (REI)] The purpose of the REI is to then determine the percentage of materials that each manufacturer is introducing into the marketplace in order to calculate the electronic residue handling fees that the manufacturer must pay. Of the approximately 10,000 manufacturers in the Spanish market only approximately 10% are allegedly registered.

LG Spain’s battle against parallel market resellers of , principally, CD and DVD players and recorders in Spain has been on-going for several years. In November of 2005, LG Spain reported that it has lost over 10 million Euros to parallel market imports the previous year. In response, LG announced an ambitious two-stage strategy of notifying unauthorized resellers and launching legal actions against those that did not reach amicable settlements. (Under European law importing products bearing copyrighted works without the consent of the copyright owner is actionable. See article regarding CD Wow case earlier in this blog).

There were no subsequent press releases regarding the success or failure of this approach. Clearly, the latest statements suggest that the parallel market sales continue to pose a problem for LG Spain.