CZECH REPUBLIC: AMBASSADOR PUSHES IPR PROTECTION

UNCLAS SECTION 01 OF 02 PRAGUE 000293 SIPDIS SENSITIVE SIPDIS STATE FOR EUR/NCE EFICHTE AND EB/IPE JBOGER STATE PASS USTR FOR JCHOE-GROVES AND WMOORE COMMERCE FOR 4232/ITA/MAC/MROGERS COMMERCE PASS USPTO STATE PASS LIBRARY OF CONGRESS E.O. 12958: N/A TAGS: KIPR ETRD ECON EZ SUBJECT: CZECH REPUBLIC: AMBASSADOR PUSHES IPR PROTECTION AND BUSINESS CLIMATE IMPROVEMENTS WITH NEW MINISTER OF INDUSTRY AND TRADE REF: A. PRAGUE 274 ¶B. PRAGUE 160 ¶C. PRAGUE 244 ¶D. STATE 7944 ¶1. (SBU) SUMMARY AND COMMENT: The Ambassador focused his introductory meeting with the new Minister of Industry and Trade (MPO) on intellectual property rights (IPR). MPO has the lead on enforcement of WTO and EU IPR legislation, and the Minister was well aware of the piracy issues at markets on the Czech border. This was the first time the Ambassador engaged a Minister-level official in the Czech Government on IPR issues, and the meeting laid the necessary ground work for the Ministry and the USG to work together on a Czech action plan to combat IPR violations. The Ambassador is also meeting with the Minister of Justice, the Minister of the Interior, and the Prime Minister this week. IPR will feature prominently in each of the meetings to get a political commitment for a "zero tolerance policy" on IPR violations. END SUMMARY AND COMMENT. --- IPR --- ¶2. (SBU) During his March 20 introductory call on new Minister of Industry and Trade Martin Riman, the Ambassador stressed the importance of elevated GOCR action to combat IPR violations. The Ambassador highlighted USG and industry concerns regarding IPR violations at the Czech border markets. He urged Minister Riman to be proactive and formulate a Czech "Action Plan" to combat IPR violations, which includes the adoption and public declaration of a "zero tolerance policy." The Ambassador stressed the importance of being proactive and said and offered to work with the Ministry on its action plan. ¶3. (SBU) Minister Riman replied that it was not/not in the interest of the Czech Republic to be on the Special 301 Watch List. He then turned to the Ministry's action person on IPR issues Adela Pristasova and asked her to brief on Czech efforts to combat piracy. Pristasova expressed "serious concern" about IFPI's Special 301 submission and noted that upon his return from Washington where he discussed IPR with both USTR and the Department of Commerce, Deputy Minister Martin Tlapa convened the interagency IPR committee (ref A). The GOCR is currently receiving input from other ministries, police, and customs to reply to the recording industry. The formal response will be ready March 23, and will be shared with the Embassy. Minister Riman welcomed working closely with the Embassy on this issue and offered to hold a DVC with Washington to discuss the matter further. -------------- ENERGY SECURITY -------------- ¶4. (SBU) In response to the Ambassador's question about the Minister's most pressing issues, Minister Riman replied that energy security was most pressing -- both internal Czech policy and the EU policy. Internally, he explained that the current coalition government which includes the Green Party was divided on the nuclear and coal mining issue. He described the EU renewable energy target as "a very expensive hysteria" and said it was a political target that is not/not achievable in reality. He said that the Czech Republic's greatest vulnerability was in the gas sector (vice oil and electricity),and the Czech energy security situation is not as bad as the newspapers make it out to be. -------------- INVESTMENT CLIMATE -------------- ¶5. (SBU) The Ambassador inquired about the possible merger between the government investment promotion authority CzechInvest and government export promotion authority CzechTrade. Noting the widely shared view among U.S. investors that CzechInvest provides significant value added services that stand out in the region, the Ambassador asked when and how the merger is expected to affect FDI inflows. Minister Riman said he wanted to merge the two institutions because he believes it would have synergistic effects. However, since CzechInvest's mandate is written into the law, PRAGUE 00000293 002 OF 002 to change it would require a new legislation. -------------- TRANSPARENCY -------------- ¶6. (SBU) The Ambassador noted the link between transparency and investment climate and said he wanted to continue dialogue on this important topic. He said while the economy is doing quite well now, corruption could have negative impact on FDI inflows in the future. He also stressed the importance of involving the private sector in any transparency initiative. Minister Riman agreed with the Ambassador on the importance of transparency and involving the private sector. He questioned whether the situation was really as bad as the newspapers claimed. (NOTE: a recent poll said corruption was the number one issue on people's minds in the Czech Republic. END NOTE) Minister Riman noted how difficult it was to know exactly how bad corruption was because it's all under the table, but that government and the private sector needed to learn that honesty is good for business. GRABER