MPA RECOMMENDS TERMINATION OF BRAZIL'S GSP

UNCLAS SECTION 01 OF 03 BRASILIA 002599

SIPDIS

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SENSITIVE

E.O. 12958: N/A
TAGS: KIPR ETRD IPR
SUBJECT: MPA RECOMMENDS TERMINATION OF BRAZIL'S GSP
REVIEW, WITH CONDITIONS

THIS CABLE IS SENSITIVE BUT UNCLASSIFIED - PLEASE
PROTECT ACCORDINGLY.


1. (SBU) Summary. According to a Business Software
Alliance representative, the International Intellectual
Property Alliance (IIPA) will likely communicate to USTR
on Monday October 3 the action it recommends taking on
Brazil's GSP Review. In a written submission to IIPA,
the Motion Picture Association (MPA) has recommended
that Brazil's GSP review be terminated, conditioned on
an understanding that the GoB will accomplish various
copyright enforcement measures over the next six months.
Topping MPA's wish list is a GoB commitment to perform
raids in certain marketplaces twice a month. According
to MPA Vice President for Latin American Operations,
Steve Solot, a significant clamp down on well-known
marketplaces could lessen the importance MPA would place
on the other sought after action items. Based on a
discussion with Sao Paulo Consul General September 21,
representatives of the music, and business software
industries appear generally to be on-board with this
approach, although the BSA representative later
cautioned against assuming IIPA's final position. End
Summary.


2. (SBU) During an anti-piracy seminar in Brasilia on
September 28, Andre de Almeida of BSA told Econoff that
the International Intellectual Property Alliance (IIPA)
plans to discuss formulation of its recommendation on
Brazil's GSP Review with copyright industry
representatives in Brazil via teleconference on
September 29. The IIPA review of Brazil's trade
benefits under the Generalized System of Preferences
(GSP) dates back to its 2001 petition in which it
charged the GoB with ineffective protection of
copyrights. The review has been extended three times
since June 2004; the current review period ends
September 30 (reftel). Almeida added that IIPA plans to
send its recommendation to USTR on Monday, October 3.

MPA Recommends Termination with Conditions


3. (SBU) On September 22, Steve Solot, Senior Vice
President of the Motion Picture Association's (MPA)
Latin American Operations, shared with post a copy of
MPA's recommendation to the IIPA regarding the GSP
Review. MPA has recommended that the Review be
terminated, with the understanding the GoB would achieve
six enforcement measures within the next six months;
otherwise, MPA would urge copyright industries to resume
action against Brazil. Solot identified crackdowns in
certain well-known pirate marketplaces as the most
important action MPA is seeking. The other five
measures deal with 1) ensuring Brazilian customs
provides pirated products with the same high-priority
treatment as counterfeit products; 2) formulation of a
strategy for centralizing imports of blank media; 3)
dissemination of educational campaign materials; 4)
urging inclusion of IPR courses within studies for
prosecutors judges, and in police academies; and 5)
stimulating creation of anti-piracy councils at state
and municipal levels. The substantive text of MPA's
submission to IIPA is provided in para 9.


4. (SBU) Solot confirmed for Econoff that MPA understands
should the review be terminated, any "resumption" would
entail industry filing a new petition. Solot explained that
termination seemed the best option for ensuring the current
constructive relationship between the private sector and the
GOB continues. Nonetheless, he would hope the dialog
surrounding a decision to terminate could be used to focus
GoB attention on needed action in the marketplaces;
significant progress in this area, he noted, would lessen
the importance MPA would place on the other action items.
While Solot acknowledged the progress the GoB has made in
seizing large amounts of pirated products, particularly at
the border with Paraguay, he argued that allowing small
venders to sell undisturbed in the marketplaces sends a
wrong signal to society-at-large.


5. (SBU) In a conversation September 16, the Executive
Secretary of the CNCP, Marcio Goncalves, told Econoff that

SIPDIS
increased action against sale of illicit products in
marketplaces was in the works. He explained that the
Secretary for National Public Security (SENASP) had recently

SIPDIS
joined the CNCP and was tasked with mobilizing state and
municipal level actions, including raids on local
marketplaces; he noted that SENASP does not have direct
authority over state and municipal level police forces, but
holds substantial sway. On September 19, SENASP announced
that it was coordinating state police actions against
piracy, beginning with operations in four states; press
reports followed about crackdowns in a number of markets.


6. (SBU) Looking at the additional actions being sought by
MPA, Solot thought it should not be difficult to get
Brazilian customs to issue explicit instructions to agents
to give the same treatment for pirated products (copyright)
as counterfeit products (trademark) (action 2). He
expressed some doubt about the practicality of a strategy to
centralize all imports of blank media in a single port
(action 3) and admitted that it was not an idea that had
been presented previously to the CNCP and that MPA's
recommendation included input "from a number of staff." On
action item 4, Solot said the ball was actually in the
private sector's court - he understood that public sector
funds had been set aside to fund an education campaign, but
the CNCP was waiting for the private sector to develop the
content. The action item (5) that calls for CNCP to urge
inclusion of IPR in the studies of prosecutors, judges, and
police is already included in the CNCP's 99-point national
action plan. MPA's final action item for the GoB is to
create state and municipal anti-piracy councils, more or
less mirroring the national council. Only Rio and Porto
Alegre currently have such councils, although additional
states have already moved to establish specialized
departments within their police forces to combat piracy.
Solot said creation of such councils typically depends
heavily on private sector involvement and they would expect
to play a large role in development of future councils.

Where Do Other Copyright Industries Stand?


7. (SBU) According to Solot, initially copyright industry
representatives in film, music and business software had
planned to formulate a joint recommendation for IIPA.
However, Solot said BSA sent its own recommendation to IIPA
the week of September 12, calling for an extension of the
review. Nonetheless, in a meeting with Sao Paulo Consul
General on September 21, representatives from all three
sectors seemed to support the general approach - termination
with conditions. All noted that the GoB reaction to another
extension would be extremely negative, creating a
potentially counterproductive environment.


8. (U) Post will review GoB actions to date to combat piracy
and provide input for Washington agencies' consideration
septel.

Text of MPA's Recommendation


9. (SBU) "The MPA local recommendation is based not only
on evaluation of specific enforcement efforts undertaken
by the GOB, and specifically the National Anti-Piracy
Council (CNCP),since its creation in late 2004, but
also on political factors and the important role of
MPA's local Anti-Piracy Program Manager as a private-
sector member of that Council.

The recommendation is also based on the successful
enforcement activities undertaken in Brazil, achieved
directly or indirectly due to the work of the CNCP, as
documented in the monthly reports prepared by Carlos
Alberto de Camargo.

The MPA local recommendation is a result of evaluation
by Carlos Alberto de Camargo, Marcio Goncalves and the
undersigned, and has been approved by our MPAA DC
office.

The local MPA recommendation is an attempt to conciliate
political and enforcement factors by recommending
termination of the investigation with the understanding
that the following 6 items (considered "deliverable")
must be achieved within the next six months (by March
30, 2006),or MPA will recommend resumption of the
investigation and corresponding possible loss of
benefits for Brazilian exports:

1) Maintain continued enforcement actions at least
twice a month, based on recommendations from private
sector, in each of the well-known pirate markets as
follows:
- Sao Paulo: Stand Center, 25 de Marco, Galeria Page,
Santa Ifigenia, Lapa e Santo Amaro;
- Rio de Janeiro: Uruguaiana
- Brasilia: Feira do Paraguay
- Pernambuco: Feira de Caruaru
- Campinas: Camelodromo.

2) Provide specific instructions from the CNCP to
customs authorities on the Paraguay border to ensure
that commercialization of pirate products receive the
same high-priority treatment as contraband of
cigarettes, arms and drugs.

3) In conjunction with private-sector representatives,
CNCP to design a strategy to centralize all imports of
blank media such as CDR and DVDR in a single port of
entry, such as Santos.

4) CNCP to ensure that educational campaigns developed
in conjunction with the private-sector are disseminated
as public service announcements by television networks
and other media.

5) CNCP to urge the inclusion of intellectual property
rights and piracy as mandatory subjects of study for
prosecutors, judges and in police academies.

6) CNCP to stimulate the creation of state and
municipal anti-piracy councils in priority capitals and
states of Sao Paulo, Rio de Janeiro, Minas Gerais,
Bahia, Distrito Federal, Pernambuco, Rio Grande do Sul
and Parana (Municipalities - Sao Paulo, Rio de Janeiro,
Belo Horizonte, Salvador, Fortaleza, Belem, Campinas,
Ribeirao Preto) with a minimum of three such State
council and three municipal councils initiated by end-
2005, based on models currently in existence in Rio
Grande do Sul."

CHICOLA