JORDAN IPR - TWO STEPS FORWARD, A HALF STEP BACK

UNCLAS SECTION 01 OF 02 AMMAN 006508

SIPDIS

SENSITIVE

STATE FOR NEA/LEA - S. WILLIAMS
STATE ALSO FOR EB/TPP/MTA/IPC - B. SOILA
PASS TO USTR - E. SAUMS

E.O. 12958: N/A
TAGS: KIPR ECON ETRD EAID KTIA PHUM JO
SUBJECT: JORDAN IPR - TWO STEPS FORWARD, A HALF STEP BACK

REF: A. AMMAN 6435

B. AMMAN 2790

C. AMMAN 2574

SENSITIVE BUT UNCLASSIFIED. FOR USG USE ONLY.


1. This is an action request. See para 9.


2. (SBU) SUMMARY: Jordan's parliament began debate on the
temporary copyright law and FTA-compliant amendments to it in
mid-July. Although MPs did not conclude deliberations before
adjourning, the chief government proponent of the amended
copyright law states that the package will pass with only
minor revisions. A cabinet decision in late April to
dramatically boost censorship fees came as a surprise to
distributors of copyright-protected, imported audiovisual
works, who see the resulting increased "price gap" between
legal licensed audiovisual items and pirated works as
promoting copyright piracy. The Prime Minister was
approached by local and international industry
representatives in mid-July to reverse the decision, which
may not comply with WTO or FTA obligations. The Minister of
Trade is now also actively involved in seeking a remedy, but
the fix may take weeks. We do not believe the demise of the
censorship commission is in the offing, though this would put
a quick end to the need to raise revenues. The good news
from Jordan is that intellectual property rights (IPR)
setbacks are now more likely to be these types of inadvertent
secondary problems; the government may not always get it
right the first time, but it has shown its commitment to the
fundamentals of IPR protections. END SUMMARY.

Copyright Law: FTA-Compliant Amendments Likely to Pass
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3. (SBU) Jordan's parliament took up the temporary
copyright law on July 13, when it was presented to the Legal
Committee of the Lower House, along with amendments intended
to bring it more closely into compliance with its WIPO and
FTA commitments. The amendments track closely with proposals
the USG had made late last year (Ref C). (NOTE: The
Government had met its goal to approve the FTA-compliant
copyright amendments as part of a USAID-sponsored "Conditions
Precedent" exercise tied to an AID cash transfer. END NOTE.)
National Library Director Mahmoud Talhouni said that the
text and amendments had passed smoothly through committee
with the exception of Article 36 which specified the grounds
upon which his National Library enforcement unit could
conduct a search for IPR violations. The current law notes
that the library can do so on "suspicion" of a violation. In
committee and then in the open parliamentary debate on July
18, a few vocal opponents argued that the library should only
act on a "strong suspicion." He said that the government did
not object to the change, so long as the government could
still determine what constituted a "strong suspicion." Seven
of the proposed amendments to the law have passed in
parliament in separate votes, said Talhouni, but parliament's
summer session was adjourned (Ref A) before it could finish
its work on copyright. He said that he expected the
remainder of the amendments to pass when parliament resumed
work.


4. (SBU) The argument on "strong suspicion" is not trivial
as it relates to constitutional provisions regarding searches
and seizures. As it stands, the copyright law allows the
National Library enforcement unit to enter any premises in
the country -- not just shops -- and critics (and even some
well wishers) wish to check that sweeping power in some
rational manner.

Censorship Fees Favor the Pirates Over Legal IPR Works
-------------- --------------


5. (SBU) Murad Bushnaq (protect),licensed Warner Brothers
distributor and head of the Jordan Intellectual Property
Association (JIPA),has been leading the charge on the issue
of censorship fees. Based on an April 26 cabinet change to
regulations regarding the independent Audiovisual Media
Commission (AMC),the AMC is authorized to charge a per unit
fee for every imported audiovisual work entering the country
(including film reels, videotapes, DVDs, video CDs, software,
PC games, audio CDs, audio tapes, and floppy discs). While a
"per title" fee remains as before (now USD 4.20 per title),
there is a steep 15 percent additional fee per unit for
visual items, and 10 percent for audio items. If a
distributor were to import 500 DVDs, for example, the USD
4.20 per title fee grows to USD 445.20. The AMC is imposing
this censorship fee for what it calls its "approval and
control" service. (COMMENT: On a strictly fee-for-service
basis, one could argue the GOJ should stick to the cost of
one review of any given title. END COMMENT.) This fee
structure does not apply to locally produced audiovisual
materials. (NOTE: Possibly a violation of national
treatment obligations under the WTO and/or FTA. END NOTE.)
However, local movie theaters and production companies must
pay a separate fee equal to three percent of their registered
capital initially and one percent annually thereafter. At
least one owner of a major production company is threatening
to move to Dubai.


6. (SBU) As Bushnaq sees it, the new fees increase the
price that consumers will have to pay for AV products, thus
increasing the price gap between pirated works and
legitimately sold items and pushing more people to buy from
the copyright pirates who still set up shop in parts of
downtown Amman. When asked about the new censorship fees,
National Library Director Mahmoud Talhouni (protect) voiced
agreement with the notion that this only increases piracy and
adds a burdensome workload for his IPR enforcement unit. The
strictly numbers-oriented critics of the new plan, say that
the government should support the censorship authority via
fines on those who sell unapproved items. More politically
astute observers say that, provided censorship is not a major
goal of the current government and given that there was a
workable, per-title fee system before, reverting to the old
fee structure would be the best way forward for now.


7. (SBU) COMMENT: The AMC and its censorship board are
unlikely to be closed anytime soon, though this would resolve
the need for revenues. Therefore, we need to look at the
alternatives. In its zeal to run a tight ship and to tap
revenue in the short term to pay for its services, the
government is reducing its revenue streams in the long run.
Over the long term, this misplaced effort to collect revenue
will close down legitimate operators (or drive them to move
distributorships in neighboring countries) and reward the
pirates and censor-busters who don't pay taxes or fees
anyway. END COMMENT.


8. (SBU) Bushnaq told us that an industry group on August 1
called on Deputy Prime Minister and Minister of Industry and
Trade Mohammad Halaiqa, who indicated that he was opposed to
the fee-collection scheme. Bushnaq predicted that, in the
end, the new fees would be dropped, but only after another
cabinet decision and publication of new regulations in the
government gazette, which could take weeks if not a month or
two. In the meantime, he believed it was best to keep the
pressure on to get the fee decision reversed.


9. (SBU) ACTION REQUEST: Embassy plans to discuss the
censorship fees issue with senior GOJ officials, raising our
objections. Any additional guidance from the Department
would be welcome.
HALE