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Cablegate: Brazil: Copyright Piracy Six Months Later

VZCZCXRO9666
PP RUEHRG
DE RUEHBR #1781/01 2360959
ZNR UUUUU ZZH
P 240959Z AUG 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 6460
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 2734
RUEHSO/AMCONSUL SAO PAULO 7846
RUEHRG/AMCONSUL RECIFE 5331
RUEHBU/AMEMBASSY BUENOS AIRES 4214
RUEHAC/AMEMBASSY ASUNCION 5607
RUEHMN/AMEMBASSY MONTEVIDEO 6415
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHNSC/NSC WASHDC
RUCPDO/USDOC WASHDC
RHMFIUU/DEPT OF JUSTICE WASHDC
RUEAHLC/DHS WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 001781

SIPDIS

STATE PASS USTR - CRONIN/SULLIVAN
NSC FOR FEARS
AID/W FOR LAC
TREASURY FOR OASIA
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/SHUPKA
USPTO FOR PINKOS
DOJ FOR MERRIAM
HOMELAND SECURITY CENTER FOR ICE OIA BRYAN EVANS
ALSO FOR ICE NATIONAL IPR COORDINATION CENTER

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KIPR KCRM ETRD BR
SUBJECT: Brazil: Copyright Piracy Six Months Later

REF: Brasilia 993

1. (SBU) Summary. In January 2006, a USG interagency community
closed U.S. industry's petition, based upon lax enforcement of
copyright piracy, to strip Brazil of GSP eligibility. Since then,
both the Brazilian government and U.S. firms report advances in
terms of seizures and law enforcement. Brazil's National
Anti-Piracy Council (CNCP), they state, has been effective in moving
its 99-point anti-piracy action plan forward. Particularly
noteworthy has been the realization by Brazilian government and
industry that while copyright piracy hurts U.S. firms, it injures
Brazilians even more. Meanwhile, the U.S. Mission continues to work
cooperatively with Brazil in training local law enforcement with
respect to copyright piracy. Although one of the leaders among
Brazil's cadre of IPR lawyers acknowledged the progress in terms of
enforcement actions, he argued that the situation as a whole has not
really changed. More still needs to be done, he said, to strengthen
border controls, tighten legal penalties, and promote more active
efforts by states and localities (especially in Rio de Janeiro).
All would agree, however, that as Brazil moves forward, maintaining
the momentum will require constant and permanent vigilance and the
continued expenditure of government/industry resources. End
Summary.

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MPA's Views
-----------
2. (SBU) Local Motion Picture Association Executives (MPA) were
fairly upbeat on the progress Brazil has made since the beginning of
the year. Looking at the situation in terms of the specific USTR
follow-up criteria (below), they noted that:

-- Enforcement actions on the Brazil-Paraguay border have shown a
great improvement. During the first six months of 2006, Brazil
seized 6,999,848 pirate burned optical discs and 29,860,173 blank
optical discs, the latter figure representing more than 90 percent
of the total of blank discs seized in all of Latin America. (Note:
While the lion's share of the Brazilian seizures took place on the
Brazil-Paraguay border, some did occur elsewhere.)

-- The GOB has conducted anti-piracy raids in key black markets
(for instance, in Sao Paulo at the Stand Center and Avenida 25 de
Marco, and in Brasilia at the Feira Paraguaia) with very positive
results. Nevertheless, many of these sites remain operational and
continue to pose an IPR threat. (See reftel.)

-- The National Anti-Piracy Council (CNCP) has launched educational
and media campaigns against piracy to raise awareness of the
anti-piracy fight. For instance, the CNCP participated in the
Customs Union anti-piracy campaign (UNAFISCO), launched at Bahia's
carnival in 2006.

-- Problems persist with respect to prosecutions. Criminal law
enforcement is slow and very seldom the indicted are convicted or
actually serve jail time when they are. The MPA's anti-piracy arm
(ADEPI) oversees more than 8,200 cases and so far in 2006 only 15
have resulted in sentences.

-- The CNCP has been very active and played a very important role
in encouraging the establishment and formation of joint state and
municipal IPR teams to focus on priority locations. Nevertheless,
in key cities such as Sao Paulo, Campinas, and Rio de Janeiro, as
well as in state capitals, pressure must be continually applied to
keep momentum going.

-- The CNCP is continually working to implement the Action items in
its National Action Plan, although many of the priorities, such as
focusing mainly on black markets, educational campaigns and border
controls, demand constant and permanent vigilance and resources.

-- All industries continue to participate in the CNCP and it is a

BRASILIA 00001781 002 OF 002


vital forum for the Brazil's valuable anti-piracy efforts.

GOB Self-Assessment: We're Doing Great
--------------------------------------
3. (SBU) Not surprisingly, Ministry of External Relations (MRE)
officials awarded the GOB stellar grades for its early 2006
copyright piracy performance. They reported that the amount of
goods seized (measured in Brazilian reais) increased 24 percent from
January to March 2005 compared to the corresponding period in 2006.
Their two-month (January-February 2006) figures reflected the
dramatic increase in seizures of blank and pirate optical media that
the six-month MPA numbers demonstrated. In addition, they produced
a list of raids in major raids which took place during the first
quarter of 2006 in major cities such as Brasilia, Boa Vista,
Fortaleza, Recife, Natal, Salvador, Belo Horizonte, Rio de Janeiro,
Angra, Sao Paulo, and Foz do Iguacu. The continuing series of
enforcement actions in Foz at the Friendship Bridge from January to
March 2006 resulted in the seizure of 37 autos, 22 trucks, and
R$33,375,639 in contraband. Our MRE contacts, however, did not
produce statistics demonstrating any significant increases in
convictions for piracy offenses.

4. (SBU) For its part, Brazilian customs observes that its
seizures increased 32.3% (measured in reais) from June to January
2006 compared to the same period the year before. Meanwhile, the
upcoming opening of an expanded customs inspection station at the
Foz Bridge should increase the GOB's monitoring capacity even more.


Dissenting Opinion from the Local IPR Bar
-----------------------------------------
5. (SBU) A Rio-based attorney specializing in IPR cases was less
optimistic. In a conversation with AmConsulate Rio's ECON/POL
assistant, he acknowledged that the Ministry of Justice and Customs
had stepped up enforcement but wondered whether this increased
activity was sustainable. Customs inspections are either lax or
non-existent at night, he observed, thereby allowing contraband to
freely enter the country after-hours. Moreover, he added, the GOB
has declined to "seriously review" its criminal procedure code to
facilitate the application of criminal penalties to IPR violators.
Finally, while the states of Sao Paulo and Rio Grande do Sul have
created IPR task-forces, Rio, he stated, has not (although it has
set up anti-piracy police units).

Budding USG-Brazil Training and Law Enforcement Cooperation
---------------------- ------------------------- ----------
6. (SBU) Brazil has proven receptive to embarking upon a law
enforcement dialogue with the U.S. on anti-piracy issues. Over the
past year, Brazilian and U.S. delegations have exchanged visits and
conducted periodic consultations on a wide range of issues, from IPR
information sharing to customs procedures. In addition, in
conjunction with ADEPI, Mission has used INL and USTDA funding to
conduct a series of copyright piracy training sessions throughout
the country for law enforcement personnel. DHS trainers work with
Brazilian counterparts to sensitize these officials to the issues
involved in working with copyright piracy.

Sobel

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