NEXT IPR STEP: COMBATING TRANSSHIPMENT

UNCLAS SECTION 01 OF 02 DUBAI 003360

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: TC PREL PGOV ZR ECIN ETRD AE
SUBJECT: NEXT IPR STEP: COMBATING TRANSSHIPMENT

REF: DUBAI 05 4626

1.(SBU) Summary: The Brand Owners Protection Group (BPG) held
its public launch May 29, 2006 in Dubai. BPG -- open to
membership across the Arabian Peninsula -- seeks to collate and
share brand owners' information on counterfeiting and piracy and
to engage national and regional government authorities. The UAE
has the lowest software piracy rate in the Middle East and North
Africa, according to statistics from the International Data
Corporation. However, Abu Dhabi has failed to take action
against the illegal distribution of pay TV signals for nearly a
year. The Dubai government established an IPR Committee to
integrate its ministries' efforts against counterfeit goods. End
Summary.

Dubai Businesses Establish Brand Owners Protection Group
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2.(U) A new organization to fight counterfeiting, the Brand
Owners Protection Group (BPG),held its public launch May 29,
2006 in Dubai, publicizing its goals and inviting other
businesses to join its fight against counterfeiting in the GCC
and Yemen. BPG -- established in late 2005 -- is a non-profit
organization licensed by the Dubai Department for Economic
Development. BPG is based in Dubai -- largely due to the city's
importance as a transshipment hub for all goods, including
illicit ones -- but open to membership across the Arabian
Peninsula.

3.(U) Omar Shteiwi, chairman of BPG and Nestle's Regional
Intellectual Property Advisor, told PolEconoff BPG seeks to
collate and share information on counterfeiting and piracy among
brand owners and engage national and regional government
authorities with this information. BPG members acknowledge that
UAE authorities have made significant gains fighting
distribution outlets and want to curb the transshipment of these
goods on the Arabian Peninsula. It is also conducting an
economic impact study on the cost of IPR violations in the UAE,
scheduled for completion by the end of 2006. The group then
hopes to expand its economic impact study to include Saudi
Arabia in 2007. BPG plans to hold customs training in the UAE
and conduct a media campaign to raise public awareness of the
costs of illicit trade.

4.(SBU) Founding BPG members include manufacturers Beiersdorf,
BMW, British American Tobacco, Daimler Chrysler, General Motors,
Johnson and Johnson, Nestle, Philips, Proctor and Gamble, and
Unilever, as well as legal representatives Al Tamimi and Co.,
Clyde and Co., Rouse and Co. International and Saba and Co.
Representatives from other businesses contemplating membership,
such as Kraft, Estee Lauder and Adidas, also attended. Most
told PolEconoff they remain undecided about paying the annual
fees -- 10,000 USD per year as a voting member or 5,000 USD per
year as a non-voting member -- but whole-heartedly support BPG's
efforts.

Data Indicate UAE Has Lowest Software Piracy Rate in MENA ...
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5.(U) A May 23 article in the English-language daily Gulf News
reported that for the second straight year, the UAE has the
lowest software piracy rate in the Middle East and North Africa.
The International Data Corporation -- an information technology
market research and forecasting firm -- recently released
statistics indicating that the UAE's 2005 34 percent piracy rate
-- identical to 2004 -- continues to be far below that of its
neighbors and many European states. (reftel)

6.(SBU) Brand-holders and IPR groups such as the Arabian
Anti-Piracy Alliance (AAA) believe optical disk piracy rates --
which include software, music, movies, video games etc. --
continue to decline in the UAE. As an example of recent
enforcement actions that have helped maintain the low piracy
rate, Abu Dhabi police raided businesses selling pirated optical
media in December 2005. Police confiscated 67,000 pirated CD's
and arrested six individuals involved. AAA CEO Scott Butler
told Econoff that as a result of such raids, piracy rates of
optical media in Abu Dhabi have been reduced by 75 percent.

... But Problems Remain
--------------

7.(SBU) Although the UAE -- and particularly Dubai -- has an
excellent record in combating software and optical disk piracy,
problems remain. In September 2005, AAA met with
representatives of the federal Ministry of Interior and the Abu
Dhabi police to discuss instances of a local cable company
illegally redistributing pay TV signals to commercial and
residential buildings in Abu Dhabi. At the request of the
police, Embassy arranged for a December roundtable meeting

DUBAI 00003360 002 OF 002


between Abu Dhabi police and representatives of the pay TV
companies. The stakeholder representatives explained the method
of the piracy, and the economic loss their companies were
suffering. Abu Dhabi police claimed they could not take action
because they did not have sufficient training on this type of
piracy. To respond to this concern, AAA coordinated a signal
theft training January 15-16, 2006. Despite this training, Abu
Dhabi police has not taken any action against the local cable
company. AAA has raised this issue with the Ministry of Economy
(which formally regulates IPR issues),and the Embassy is in the
process of setting up a meeting with the MinEcon official
responsible for piracy issues.

Dubai Establishes IPR Committee
--------------

8.(SBU) In April, Dubai government entities announced the
creation of a unified committee to combat all types of IPR
infringement. According to Khalid Babiker al Nour -- Dubai
Customs IPR unit's legal advisor -- the unified approach is
necessary to effectively deal with the problem. He stressed the
importance of sharing information between entities such as
Dubai's Department of Health and its Department of Economic
Development to make enforcement more effective. Yousef Ozair
Mubarak, manager of the Dubai Customs IPR Unit, told PolEconoff
the committee meets roughly once a month to coordinate actions,
while more informal cooperation and information sharing are
continuous. He pointed to recent successes intercepting
counterfeit pharmaceuticals as a direct result of the closer
collaboration with Dubai's Department of Health.

9.(SBU) Comment: BPG's expanding focus on regional
transshipment of counterfeit goods illustrates that
anti-counterfeit enforcement in the UAE is largely successful
and businesses are moving to the next issue. Although
transshipment remains a major concern, Dubai's new IPR Committee
is another positive sign that UAE government officials remain
engaged on the issue and are actively improving their
capabilities.

10.(U) This cable was cleared with Embassy Abu Dhabi.
BURNS