Special 301 Out-of-Cycle Review Recommendation: Latvia

UNCLAS RIGA 000857

SIPDIS

SENSITIVE
SIPDIS

USTR FOR JENNIFER GROVES, CARROLL COLLEY, RACHEL BAE
COMMERCE FOR CATHERINE PETERS
STATE FOR EB/TPP/IPE JENNIFER BOGER

E.O. 12958: N/A
TAGS: ETRD KIPR ECON LG
SUBJECT: Special 301 Out-of-Cycle Review Recommendation: Latvia

REF: 1) STATE 149667, 2) STATE 66966


1. (SBU) Summary: Latvia's performance since April 2006 on
IPR-related issues shows continued improvement in the number of
police raids conducted, amount of goods seized or destroyed, and IPR
cases brought to prosecution. However, Latvia has not shown
improvement in a number of areas that were highlighted in the 2006
Special 301 Report Notification, the most notable of which is the
failure to implement penalties that would act as a deterrent to IPR
crimes. While applauding Latvian advances, Post recommends that
Latvia remain on the Special 301 Watch List for the upcoming cycle.
End Summary.


2. (SBU) Pol-Econ Off received from the MFA copies of Latvia's
submission to the USTR for the current Special 301 Out-of-Cycle
Review. The Latvian government notes improvement in the first six
to eight months of 2006 in the seizure of IPR-infringing material (5
million EUR worth in the first half of 2006, compared to 7 million
EUR in all of 2005),the number of police raids per week (up from 3
per week in 2005, to 6-8 weekly this year),criminal cases initiated
(92 cases to date this year, compared to 53 last year),and cases
submitted to the Prosecutor's Office (32 in 2006, 19 in 2005).


3. (SBU) Additionally, the Justice Ministry's Deputy State
Secretary, Laila Medin, stated that the government has presented to

SIPDIS
the Saeima (Parliament) amendments to the Civil Procedure Code and
the Copyright Law that bring Latvian laws into compliance with EU
directives on IPR protection and introduce civil ex parte search
orders. She said the Saeima has not passed these revisions due to
the recent elections, but should address the changes when the new
Saeima is seated. Changes to these laws were mentioned as a goal
for Latvia in the 2006 Special 301 Notification cable (reftel 2).



4. (SBU) However, in the Out-of Cycle Review period since April
2006, Latvia has shown little improvement in several key areas
highlighted in Latvia's 2006 Special 301 Notification cable; namely
deterrent sentencing, speed of judicial proceedings and prevention
of internet-based copyright violations. The most notable
short-coming is the continued lack of deterrent sentencing for IPR
crimes. The Latvian government's submission to the USTR notes 14
convictions in the first 7 months of 2006, but none of these
involved jail time for offenders. The 14 convictions resulted in 9
fines, 4 community service penalties and one suspended sentence.
One industry group, The Coalition for Intellectual Property Rights
(CIPR),stated that the statistics of the Latvian Prosecutor General
Office shows that Latvian courts typically sentence offenders to
only about one-tenth of the maximum fine that is allowed by law, and
that to CIPR's knowledge, no defendant has ever received a prison
sentence.


5. (SBU) The MFA's lead on IPR issues, Under Secretary of State
Maija Monika, told Pol-Econ Off that she also is not aware of any
IPR offender being sentenced to jail. She attributed this to the
fact that IPR crimes are not viewed in Latvian society as serious
offenses, and that judges reflect that common societal view when
handing down sentences.


6. (SBU) Medin responded to the sentencing issue saying that the
Justice Ministry is concerned that jail sentences may not be
appropriate for many IPR offenders, as inmates often deepen their
connection to criminal activities during times in prison. She said
the Justice Ministry feels that community service or fines can be
more effective in punishing IPR violations without putting the
offender in a prison setting. Medin did not immediately have
information on how much IPR offenders are currently fined or how
many hours of community service they are sentenced to, though she
will try to obtain such figures. Medin stated that the Justice
Ministry's future sentencing goal would be to use a combination of
jail time and probation, but such sentencing would require
legislative changes (they can currently choose jail time or
probation, but not a combination of the two) and may take two years
to implement. When asked if she felt the sentencing in Latvia was a
deterrent to IPR crimes, she stated that it is too early to tell, as
the federal probation system is only three years old, with probation
previously being handled at a municipal level. When asked if the
judiciary views IPR crimes as serious, she replied yes, but added
that that judges are in need of further training on the nature of
IPR violations. Comment: It would be beneficial for Post and USTR
to explore if there is an appropriate means/venue for the USG to
assist in such judicial training.


7. (SBU) The 2006 Special 301 notification cable for Latvia also
encouraged the GOL to improve the speed of judicial proceedings on
IPR violations. CIPR states that law enforcement investigations
remain slow, with cases of illegal factories manufacturing
counterfeit cigarettes that are still technically under
investigation since 2001. Medin said she will investigate if the
Justice Ministry has statistics on the average length of
prosecutions. CIPR also notes that the Economic Police lack
essential equipment and internet access needed to prevent
internet-based copyright violations, an area noted as in need of
improvement in the 2006 Special 301 report notification.


8. (SBU) While applauding Latvia's improvements in seizures of goods
and in initiating IPR-related criminal cases, the failure to
implement deterrent sentencing that would clearly meet Latvia's
TRIPS obligation is a continuing area of concern. Until the GOL can
demonstrate that the current system of fines and community service
contributes to creating an environment which reduces IPR violations,
Post recommends that Latvia remain on the Special 301 Watch List for
the upcoming cycle. We believe it is also important to note that
the lack of deterrent sentencing in the IPR area also reflects a
more generalized problem in the Latvian approach to law
enforcement/prosecution, where suspended sentences, probation and
small fines, as opposed to prison sentences, are common practice.
The current shortcomings in the IPR arena thus reflect broader
challenges to strengthening rule of law in Latvia's still young
democracy.


BAILEY