NEW PUBLIC AND PRIVATE EFFORTS TO COMBAT PIRACY IN

UNCLAS SECTION 01 OF 02 MEXICO 001522

SIPDIS

SENSITIVE
SIPDIS

FOR WHA/MEX, WHA/EPSC, AND EB/TPP/IPE
USDOC FOR ITA/MAC/NAFTA/ARUDMAN
TREASURY FOR IA - JASPER HOEK
DEPT PASS TO USTR FOR J MELLE

E.O. 12958: N/A
TAGS: ECON PGOV KIPR MX
SUBJECT: NEW PUBLIC AND PRIVATE EFFORTS TO COMBAT PIRACY IN
MEXICO

REF: A) 2005 MEXICO 893; B) 2005 MEXICO 3999

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SUMMARY
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1. (U) Two new, potentially confrontational, efforts to
combat contraband and piracy have recently been announced.
On March 6, President Fox issued a decree to create a new
Inter-Ministerial Commission to better coordinate
enforcement of contraband and the illegal economy among GOM
agencies and trade associations. A week later, private
sector groups excluded from Fox's commission created an NGO
to demand an effective response from IPR enforcement
authorities and to promote legal reforms to pursue and
sanction IPR violations. End summary.

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COMMISSION TO COMBAT CONTRABAND AND ILLEGAL ECONOMY
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2. (U) On March 6, President Fox issued a decree through the
Ministry of the Government (Interior) to create an Inter-
Ministerial Commission to "prevent and combat the illegal
economy by inhibiting contraband and the distribution of
illegally imported products in the informal economy." This
goal would be accomplished through improved coordination,
plans, operations, and policies among different government
agencies, as well as increased private sector participation
in the elaboration and modification of foreign trade and
customs regulations. It also hopes to strengthen the rule
of law through close collaboration with the Attorney General
Office (PGR). Proposals on amendments to the federal
judicial system aimed at sanctioning contraband and the
illegal distribution of merchandise would be approved upon
evaluation of their cost and benefit.


3. (U) The Commission will be led by representatives of the
Ministry of the Interior, the Ministry of Public Security,
the Ministry of Finance, and the Ministry of Economy. The
Attorney General, the Chief of the Tax Administration
System, the Customs Administrator, the Federal Fiscal
Auditor, the Under Secretary of Industry and Trade, a member
of the Presidential staff, and representatives from
different private associations, chambers and confederations
will act as permanent members of the Commission. For
specific issues, the Commission will be able to invite
representatives from other Ministries, state-run companies,
municipalities and states.

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A NEW NGO TO COMBAT PIRACY
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4. (SBU) Roberto Castaneda, chair of the independent
association Alliance against Piracy (and a manager for
Nike),complained to Econoff and Econ FSN that the creation
of the Inter-Ministerial Commission was done behind their
backs. He said businesses, like Nike and Microsoft, and
trade associations, like Motion Pictures Association (MPA)
and the Mexican Recording Industry Association (Amprofon),
were left out of the Commission. Instead, Presidencia
included larger associations and chambers, such as the
Mexican Employers Confederation (Coparmex) and the Business
Coordinating Council (CCE).


5. (SBU) Due to the "authorities' inability to combat piracy
and contraband, and in order to continue making our voices
heard," Castaneda said representatives of Mexican and U.S.
companies decided to create their own NGO, called the
Institute for IPR and Legal Trade Protection (IPPIC). On
March 16th the private sector, represented by the recording,
software, apparel and movies industries, created the first
NGO in Mexico to combat piracy. Fernando Hernandez, the
president of AMPROFON, and Fidel Lopez, the National Apparel
Chamber's lawyer, were designated President and Director
General, respectively, of the new Institute.


5. (SBU) IPPIC's priorities will be to demand that federal
and local authorities develop a strategy to effectively
investigate and do intelligence work to combat organized
crime; lobby Congress to pass a law that allows PGR to
pursue IPR crimes "ex officio"; and, urge the Ministries of
Economy, Finance, and PGR to create a state policy to combat

MEXICO 00001522 002 OF 002


the illegal economy. The Institute will also provide legal
assistance on IPR issues, trade regulations and re-
conversion proposals for the illegal markets.


6. (SBU) The Alliance against Piracy was the private
sector's first positive effort to coordinate efforts against
IPR violations. Unfortunately, due to a lack of human and
monetary resources it has not been very effective.
Castaneda said that the Alliance against Piracy will not
compete against the recently created NGO, IPPIC. He said
their efforts would be coordinated, but the NGO will have
more access to needed resources.

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COMMENT
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7. (SBU) The new commission demonstrates the GOM's continued
engagement on IPR and their understanding that improved
inter-agency coordination is essential for improved IPR
protection. Unfortunately, cutting out the leading (and
most vocal) private sector participants from their anti-
piracy efforts makes one wonder how serious this effort is.
In addition, it sets up potential conflicts between the
commission and the new IPPIC. Ultimately however, the IPPIC
and the Alliance Against Piracy only want better IPR
enforcement. It will be interesting to see whether this
commission gets off the ground or bogs down like the big
National Plan (reftel) which was announced by PGR in June
2005, was supposed to go into effect last December, but to
date has not amounted to anything. End comment.
KELLY