BRAZIL'S NATIONAL PLAN TO COMBAT PIRACY: AN UPDATE ON

UNCLAS SECTION 01 OF 02 SAO PAULO 000910

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR WHA/BSC AND EB/TPP/IPE
STATE PASS TO USTR FOR MSULLIVAN
STATE PASS EXIMBANK
STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE
NSC FOR FEARS
USDOC FOR 4332/ITA/MAC/OLAC
USDOC FOR 3134/USFCS/OIO
USDOC ALSO PASS PTO/OLIA
TREASURY FOR OASIA, DAS LEE AND JHOEK
DOL FOR ILAB MMITTELHAUSER
DOJ FOR CMERRIAM
AID/W FOR LAC/AA

E.O. 12958: N/A
TAGS: KIPR ETRD ECON KJUS BR
SUBJECT: BRAZIL'S NATIONAL PLAN TO COMBAT PIRACY: AN UPDATE ON
IMPLEMENTATION EFFORTS

REF: A) Brasilia 599


1. SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY


2. (U) Summary. At the July 26 Sao Paulo meeting of Brazil's
National Council to Combat Piracy and Intellectual Property Crimes,
the public-private Forum Against Piracy and Illegality (FNCP)
officially became an autonomous unit of the Council. The meeting
reviewed the past year's implementation of the Council's 99 measures
to combat piracy and outlined the FNCP's proposed actions during
this election year. These FNCP actions include presentation of a
petition to all candidates for political office recommending public
policies to combat piracy, a national public/private awareness
campaign, and continuing public debates to gather support and
momentum. The Council and the Sao Paulo State Interagency Committee
Against Piracy closed the meeting with a detailed review of their
2006 -2007 action plans to combat piracy, defined by a combination
of law enforcement, educational, preventive and economic measures.
End Summary.


3. (U) July marked the first autonomous meeting of the FNCP, an
organization conceived within the National Council to Combat Piracy
and Intellectual Property Crimes (itself formed in November 2004),
and composed of private, state, and social enterprises joined
together to combat piracy in its various forms. The role of the
FNCP is threefold: (1) to formulate a permanent discussion and
debate framework on combating piracy, (2) to be a channel of
communication between the state-sponsored federal Council and
society at large, and (3) to continuously enlist the active
participation of all current and future members of FNCP in the
ongoing national struggle to combat piracy.


4. (U) FNCP President Paulo Rosa, also the President of the
Brazilian Association for the Recording Industry, introduced a
petition for signature that would be presented to all political
candidates, containing suggested public policies to be implemented
in the fight against piracy, contraband and copyright violation.
All members present were urged to sign, and the petition is expected
to be delivered to candidates within 15 days. Rosa hopes that the
petition will stimulate debate during the election campaign,
especially if presented in terms of loss of jobs and tax revenue,
both of which directly affect all voter communities. According to
FNCP sources, piracy accounted indirectly for the loss of 496,000
jobs in 2005, and resulted in another approximately 154,000 jobs not
being generated in the formal economy. It caused a loss of USD 2
billion in tax revenues for the federal government, while the
manufacturing sector was denied production and sales worth USD 5.4
billion.


5. (U) At the meeting three federal Congressional Deputies, all up
for re-election, each reiterated that piracy is not a problem that
is coming across the Paraguayan border in stuffed shopping bags, but
rather a structured, illegal trade activity conducted within Brazil
by well-organized gangs. According to FNCP Executive Secretary
Alexandre Cruz, this illegal trade has grown 25% in the past 12
months. Not only is the problem endemic among the Brazilian public,
it also encompasses many legitimate businessmen and government
officials. The President of the Parliamentary Investigative
Committee (CPI) on Piracy, Federal Deputy Luiz Antonio Medeiros,
whose testimony led to the incarceration of Brazilian-Chinese
businessman (and counterfeit smuggler) Law King Chong in 2004,

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stated that both Sao Paulo and Brasilia are major centers in Latin
America for pirated, counterfeit and smuggled goods. He cited as an
example the plaza in front of the Congress in Brasilia, known as the
"Paraguayan Marketplace." Although located in direct sight of law
enforcement officials, the market manages to sell all types of
counterfeit and pirated goods. Deputy Julio Semeghini mentioned
that it is not surprising to see high-ranking government officials
in the crowded market purchasing products side by side with the
public.


6. (U) The meeting closed with the National Council to Combat
Piracy and Intellectual Property Crimes and the Sao Paulo State
Interagency Committee to Combat Piracy presenting their current and
future plans to combat piracy. Both organizations pursue a
combination of preventive, educational, economic, and law
enforcement measures in combating piracy. Each works in
coordination with local, state and federal law enforcement and has
been successful in lobbying the government to obtain increased
funding for law enforcement operations to combat piracy.


7. Comment. (SBU) The formation of the FNCP is a positive step in
Brazil's continuing fight against piracy. Its members cross the
broad spectrum of industries that are affected by these illegal
actions, from the recording, motion picture, and software industries
to manufacturers and publishing companies. Working as an autonomous
unit, FNCP should be able to serve as a channel between public and
private forces, stimulating continued debate, awareness and action
against this ever increasing problem. Brazil cannot afford to
weaken its present position given the high economic cost in lost
sales, impact on jobs, and lost tax revenues. End Comment.

McMullen