IFPI ISRAEL: UPDATE ON COPYRIGHT LEGISLATION

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 004300

SIPDIS

NEA/IPA FOR BELGRADE
DEPARTMENT PLEASE PASS TO USTR E.SAUMS

E.O. 12958: DECL: 10/27/2016
TAGS: ECON ETRD KIPR IS
SUBJECT: IFPI ISRAEL: UPDATE ON COPYRIGHT LEGISLATION


Classified By: Acting Economic Counselor Jason N. Witow for reasons 1.4
(b) and (d)


1. (C) Summary: In a October 26 meeting with the Managing
Director and Legal Advisor of the International Federation of
Phonographic Industry (IFPI) in Israel, Econoff emphasized
the need to focus concerns about the Copyright Bill and the
Copyright Tribunal Bill into a coherent argument that the USG
could draw from in negotiations with the GOI. Itshak
Sheffer, managing director, said that the Copyright Tribunal
Bill was more damaging in some ways than that the Copyright
Bill. IPFI offered to provide Post with an English
translation of the Copyright Tribunal Bill within two weeks.
IFPI noted that the Copyright Bill institutes discrimination
against foreign recording producers, for the first time ever
treating foreign recordings differently from Israeli
recordings. IFPI predicted that a debate on these two pieces
of legislation will commence within the next two months in
the Knesset Economic Committee. IPFI urged direct USG
engagement with the Israeli Ministry of Justice (MoJ) as the
most effective way to change the legislation. End summary.

--------------
Copyright Tribunal Bill
--------------


2. (C) The Copyright Tribunal Bill was passed to the Knesset
in July 2006 as government-sponsored legislation. While the
recording industry only expected the MoJ to attempt to
legislate changes in the way that royalties are collected,
IFPI's legal advisor Eyal Price said the provisions of this
legislation "are far beyond the worst that we had imagined."
IFPI offered to provide Post with an English translation of
the bill within two weeks. The two provisions of the
legislation of most concern to the international recording
industry are the consolidation of royalty collection so that
it can be carried out by only one government approved
organization, and the requirement that tariffs (royalties) to
be collected are pre-approved by a government committee. If
the legislation passes, Sheffer said, these two provisions
could effectively end the presence of IPFI in Israel. He
added that the proposal to require pre-approval of tariffs by
a government committee would mean the end of royalty
collection. Canada was the only country, that Sheffer is
aware of, which has moved towards a pre-approval system for
tariffs -- and "it's a disaster!"


3. (C) The Ministry of Justice can expect domestic support
for the collectivization of royalties collection, as Israeli
performers and authors do not have a well functioning system
for collecting royalties. In addition, Sheffer said he is
worried that Israeli artists will push forward legislation
permitting copying of content for personal use -- in effect
legalizing piracy -- with limited compensation to be provided
to rights holders in the form of an small tax on the digital
media which can be used for copying. A draft of a digital
media tax bill was completed by the MoJ in early 2005, but
work on the legislation has stalled.

--------------
Copyright Bill
--------------


4. (C) Price described the problem with the Copyright Bill
succinctly saying, "the Ministry of Justice wants to limit
the rights provided to foreign recording producers." Price
said that given the globalization of world music production,
even Ministry of Justice assurances that the bilateral
U.S.-Israel treaty would continue to ensure rights for U.S.
producers, is not sufficient to protect the interests of U.S.
industry. Price also said two items which do not appear in
the current draft legislation -- penalties for circumvention
of technical protection and rights management information --
concern IFPI.

--------------
Next steps
--------------


5. (C) Sheffer explained that since the Knesset Economics
Committee was flooded with input on the copyright
legislation, he expects the committee's legal advisor Eti
Bendler will need at least a month to examine the public
comments and seek clarification from the Ministry of Justice.
Once this process is complete, the Economics Committee will
hold public hearings on the legislation and IFPI plans to
testify. Sheffer said that while Economic Committee Chairman
Moshe Kahlon initially appeared unenthusiastic about the
legislation, a combination of pressure from the Ministry of
Justice staff (pushing to move the legislation forward) and
the overwhelming response to the committees' call for public
comments, moved the Copyright Bill and the Copyright Tribunal
Bill to the top of the Economics Committee's agenda.

********************************************* ********************
Visit Embassy Tel Aviv's Classified Website:
http://www.state.sgov.gov/p/nea/telaviv

You can also access this site through the State Department's
Classified SIPRNET website.
********************************************* ********************
JONES