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Cablegate: Madrid Weekly Econ/Ag/Commercial Update Report -

VZCZCXRO6049
RR RUEHRN
DE RUEHMD #2101/01 3181535
ZNR UUUUU ZZH
R 141535Z NOV 07
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 3784
INFO RUEHSS/OECD POSTS COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 3171

UNCLAS SECTION 01 OF 03 MADRID 002101

SIPDIS

SENSITIVE
SIPDIS

EUR/WE
EEB/IFD/OMA

E.O. 12958: N/A
TAGS: EAGR ECON EFIN ELAB ETRD KIPR PTER SOCI TBIO
SP, EINV
SUBJECT: MADRID WEEKLY ECON/AG/COMMERCIAL UPDATE REPORT -
NOVEMBER 5 - NOVEMBER 9


MADRID 00002101 001.2 OF 003


Not for Internet Distribution.

Table of Contents:

KIPR: GOS IPR conference, bilateral
EFIN: Finance Ministry investigates suspicious financial
transactions involving 500 euro notes
PTER/EFIN: Police monitor some 700 mosques for possible
terrorism finance ties
EINT: OECD Study shows Spanish high-speed internet slow and
expensive
TBIO/EAGR: Spain abstains on EU vote on Austrian agriculture
biotechnology ban
ETRD/TBIO: EU biodiesel board vs US biodiesel imports
ELAB: Incentives for delaying retirement

GOS IPR CONFERENCE, BILATERAL

1. (U) The Ministry of Industry, Tourism and Trade sponsored
a November 7-8 "Conference on Intellectual Property Rights in
the Digital Environment" that included representatives from
the USG (Associate Register of Copyrights David Carson),
France, the UK and Korea, as well as representatives of
content providers, Internet Service Providers (ISPs) and
consumers. Secretary of State for Telecommunications
Francisco Ros opened the conference. The content provider
and ISP representatives aired their well-known disagreements.
The Spanish government spokesmen did not take sides.
However, the Secretary of State's Chief of Staff, Juan
Junquera Temprano, made a very strong statement to the effect
that copyright levies are not compensation for peer to per
file sharing. This was important because the logical
conclusion to this statement is that peer to peer file
sharing therefore either has to be suppressed and/or
compensated in some other way. Carson's presentations on the
Digital Millennium Copyright Act were well received.

2. (SBU) DCM Llorens, accompanied by Carson, U.S. Patent and
Trademark Office Senior Counsel Michael Shapiro and Economic
Officer, participated in a November 7 bilateral with
Secretary of State Ros on Intellectual Property Rights

SIPDIS
issues. The DCM congratulated Ros on the conference
initiative and reiterated per the Special 301 demarche our
interest in deeper IPR cooperation with Spain. Ros responded
that perhaps more judge-to-judge meetings would be a good
idea. We will follow up on this idea. The DCM hosted a
lunch for GOS officials and stakeholders that participated in
the conference on November 8. That also went well, although
content providers expressed frustration with ISP lack of
willingness to assume more responsibility for protecting
intellectual property on the internet and with the government
for not being more decisive. The Ministry of Industry
representative urged the relevant industries to agree upon a
notice system to begin with. (Comment: This conference was
certainly a worthwhile event, but it is clear that the GOS
will not undertake major IPR initiatives prior to the March
2008 parliamentary elections. We think the judge-to-judge
initiative is a good idea, although only likely to pay
dividends in the medium term. We think the Ministry of
Industry's idea to pursue a notice system for now, leaving
takedown for later, is the most promising avenue for more
short-term success in protecting copyrights on the internet.
We will be exploring with stakeholders the possibility of
making this happen. End Comment.)

FINANCE MINISTRY INVESTIGATES SUSPICIOUS FINANCIAL
TRANSACTIONS INVOLVING 500-EURO NOTES

3. (SBU) An estimated 30 percent of all the 500-euro notes
issued by the European Central Bank circulate in Spain, which
has long given rise to suspicions that money laundering is a
big problem in the country. In 2005, there were 2,140
suspicious transactions involving 500-euro notes. The
Finance Ministry has also added the number of suspicious
transactions for 2003, 2004 and 2006 and says there were
13,500 such transactions involving over 6 billion euros. The
Ministry of Finance is creating an additional 30 suspicious
transaction inspection units. Inspectors working at the
Ministry had requested the formation of 100 such units.
(Comment: There is no doubt that there is a problem in Spain
with respect to money laundering. Banks are probably
relatively compliant on money laundering matters, but the GOS
needs to do a better job of monitoring real estate agencies,
notaries and other non-banking institutions.) (El Pais,
11/4/07)


MADRID 00002101 002.2 OF 003


POLICE MONITOR SOME 700 MOSQUES FOR POSSIBLE TERRORISM
FINANCE TIES

4. (SBU) Many of the mosques are not registered and are
really more informal gatherings of the faithful. In Spain,
religious organizations have to register in order to qualify
for tax and/or other benefits. An unnamed Ministry of
Interior official is quoted as being "worried" about the
funds that might be raised in Spain's mosques. (Comment:
Stories about mosques being under surveillance have appeared
in the press in the past. We are trying to find out more
about the form that this reported surveillance takes.) (El
Pais, 11/4/07)

OECD STUDY SHOWS HIGH-SPEED INTERNET SLOW AND EXPENSIVE

5. (U) According to the OECD study, in October 2007,
downloading speed in Spain was 6.901 megabytes per second,
somewhere in the middle of the OECD, compared with 8.860
megabytes per second in the U.S. and 93.693 megabytes in the
leader, Japan. Monthly high-speed internet bills amounted to
USD 67.70 in Spain, at the high end of the OECD, compared
with USD 53.10 per month in the U.S. Finland had the lowest
bills at USD 31.10 per month. (Comment: This information
comes as no surprise. Embassy consumers of home internet
uniformly report relatively lengthy high-speed internet
connection times and high prices, despite some competition to
the dominant carrier, Telefonica.) (El Pais, 11/6/07)

SPAIN ABSTAINS ON EU VOTE ON AUSTRIAN AGRICULTURE
BIOTECHNOLOGY BAN

6. (U) Spain's anti-biotechnology minister of the environment
recently took a small, small step in favor of agriculture
biotechnology. In two previous European Union (EU) Member
State votes on Austria's ban of agriculture biotechnology,
Spain along with a majority of Member States supported
Austria, denying the European Commission (EC) the ability to
take action against Austria. However, in a third vote on
October 31, 2007, the minister changed Spain's position from
one supportive of Austria's agriculture biotechnology ban to
"abstention" in the vote. In doing so, she criticized
Austria for not putting forward a credible defense of its ban
of agriculture biotechnology policy for all EU Member States.

7. (U) As a result of this last round of voting, it appears
that the EC now has the ability to acquire that Austria end
its ban. However, some are reporting that the EC may go easy
on Austria, only requiring that it end its ban of imported
corn for use in the feed and processing sectors. If the EC
takes this action, it appears that Austria would retain the
ability to ban the planting of agriculture biotechnology,
which would still appear to be a contravention of the EC's
international biotechnology responsibilities.

EU BIODIESEL BOARD VS US BIODIESEL IMPORTS

8. (U) The European Biodiesel Board (EBB) has asked the
European Commission (EC) to apply all the trade measures
possible to counter the effects of a U.S. biodiesel subsidy
scheme. The EBB claims that U.S. biodiesel producers benefit
from domestic raw material subsidies and a $1.00/gallon
biodiesel blending subsidy (B99) that encourage U.S.
biodiesel exports to the European Union at landed prices
below break-even prices for European-produced biodiesel. The
EBB has asked the EC to force a change in U.S. legislation
through any and all means at its disposal, including
countervailing duties or a World Trade Organization complaint.

9. (U) According to the EBB, the B99 subsidy also encourages
triangular trade with biodiesel producers and traders from
third countries like Malaysia and Indonesia. Reportedly,
these producers export biodiesel to U.S. blenders who
"splash" (blend) it with mineral diesel, which then qualifies
them to receive the $1.00/gallon-B99 subsidy. The biodiesel
is then exported (dash) to Europe, where it then becomes
eligible for additional European subsidy schemes. The EBB
claims the B99 has created a surge of biodiesel exports to
Europe through this "splash and dash" loophole, with total
imports of biodiesel at 700,000 tons since January 2007, as
compared to 90,000 tons in all of 2006.

INCENTIVES FOR DELAYING RETIREMENT

10. (U) For those willing to prolong their work life beyond
65 there soon will be an incentive of up to 15% increases in

MADRID 00002101 003.2 OF 003


their retirement packages. The Minister of Labor and Social
Issues, Jesus Caldera announced that a new law will be
approved by the Senate in the coming days. In an agreement
reached by labor unions and employers, workers will see their
pension grow at least 3% for every year worked beyond 65 with
the maximum being 15% once reaching 70. Employers will not
be liable for social security contributions for workers over
65. The Minister noted that 17% of Spaniards are over the
age of 65 and the longevity increases every year. Life
expectancy in Spain is one of the highest in the world at 80
years. Currently, 47 percent of Spaniards retire before 65,
and the average retirement age is 63.5.
AGUIRRE

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