ALGERIA 2009 SPECIAL 301 REPORT

UNCLAS SECTION 01 OF 02 ALGIERS 000228

SENSITIVE
SIPDIS

STATE FOR EEB/TPP/IPE (MCGOWAN)
STATE PASS TO USTR (GROVES AND BURKHEAD)

E.O. 12958: N/A
TAGS: ECON ETRD KPIR AG
SUBJECT: ALGERIA 2009 SPECIAL 301 REPORT

REF: A. ALGIERS 30

B. 08 ALGIERS 208

C. ALGIERS 223

D. ALGIERS 164


1. (SBU) SUMMARY: Algeria's IPR posture remained generally
static in 2008, and took a marked turn for the worse in
regard to pharmaceutical market access with the imposition of
a ban on imported pharmaceutical products that are produced
domestically (ref A). Furthermore, it has become clear that
WTO accession is not a near-term priority for Algeria,
meaning that accession talks no longer offer the leverage
that many had hoped as means to encourage Algeria to tighten
its IPR regime. We saw no appreciable improvement in
fighting optical piracy, but we feel that particular Algerian
agencies, notably Customs and the Ministry of Justice, do
want to stop the flow of counterfeit goods into Algeria if
only for health and safety reasons. Even with the country's
recent imposition of certain protectionist policies, we
recommend that Algeria stay listed on the Watch List, as we
are on the verge of engaging in cooperative agreements and
programs that may generate greater attention to IPR
enforcement, although these efforts will have little or no
impact on the government's position favoring generic
pharmaceuticals. END SUMMARY.

ALGERIA'S PAST LEGAL EFFORTS
--------------


2. (SBU) As we reported last year (ref B),Algeria has
developed a legislative framework for IPR protection, even if
enforcement efforts remain sporadic. Algeria made
legislative progress toward IPR protection with the 2003
adoption of modernized IPR laws and subsequent reinforcing
legislation in 2004 to comply with the TRIPs agreement as
part of Algeria's WTO accession process. In 2005, the
Algerian government adopted new implementing regulations
related to copyrights, patents, trademarks and integrated
circuits. Algeria is also a signatory to several
international agreements such as the Bern and Paris
Conventions. Pharmaceutical companies note, however, that
Algerian law does not explicitly protect data exclusivity.
While the legislative base is relatively strong,
implementation and enforcement of these laws have not
translated into widespread, systematic practice.

NEW HIGH: COUNTERFEIT SEIZURES
--------------


3. (SBU) Customs and Ministry of Justice officials do seem
sincere when they tell us that they are committed to
combating counterfeit products. Commercial law attorneys
representing U.S.-based and other foreign firms also told us
in 2008 that cooperation is good with Algerian government
agencies and the courts regarding the seizure of imported
counterfeit products. According to data released by Algerian
Customs, 1.5 million counterfeit items worth 150 million
dinars were seized in 2008, compared to 2.27 million items
worth 100 million dinars in 2007. Of the items seized, 86
percent were cosmetic products, with automotive spare parts
and electrical appliances making up two of the next largest
categories of seized items. Customs claimed that 70 percent
of the counterfeit products were made in China, with 38
percent of them shipped directly from China. Algerian
Customs concluded counterfeit product and illegal trade
agreements in 2008 with several international companies
including Unilever, Phillip Morris International and Nestle.
We have concluded negotiations on a Customs Mutual Assistance
Agreement (CMAA) with Algeria, and hope to see it signed in
the first half of 2009.

NEW LOW: PHARMACEUTICAL BAN
--------------


4. (SBU) Algeria's imposition of a ban on imported
pharmaceutical products that are produced in Algeria (ref A)
completely changes the way in which we assess Algeria's
commitment to IPR issues. At one point in mid-2008, at least
one U.S.-based pharmaceutical company told us that it had
been mostly satisfied with both the legal framework and
enforcement of patents and trademarks in Algeria, and was
instead focused on fighting the ongoing issue of reference

ALGIERS 00000228 002 OF 002


pricing according to lowest-cost generics (ref B). Another
company was, however, facing a patent threat from several
generics allowed to be marketed in the same dosage as the
patent. The pharmaceutical ban may be seen as a Special 301
IPR issue as a barrier to market access for those relying on
intellectual property protection because it specifically
targets non-generics and, until the ban, some 65 percent of
the Algerian pharmaceutical demand had been met by imports.
With this ban in place, other IPR issues in this domain, such
as reference pricing, patent protection and data exclusivity,
have become essentially moot. Ministry of Health officials
have made no apology for the ban, insisting in late 2008 that
the ban is not open for discussion in WTO accession
negotiations (ref A),and informing us in February 2009 that
the ministry's priorities in terms of medications are
quality, price and access for the greatest number of
Algerians.

WTO ACCESSION NO LONGER OFFERS LEVERAGE
--------------


5. (SBU) In the past, we and industry representatives have
relied on the notion that WTO accession talks were the best
venue to address Algeria's weak IPR enforcement regime.
However, it is increasingly clear that Algeria does not feel
WTO accession will occur in the near term, and talks over the
last 24 months offered little progress on accession itself or
on IPR issues. Our new MFA desk officer transferred to
Algiers in February from Geneva, where he was responsible for
the WTO portfollio. He acknowledged that WTO progress had
flatlined for "about a year" and was not optimistic that the
accession process would accelerate in the immediate future.
While Algeria's legal changes since 2003 regarding TRIPS
compliance and other mechanisms were sparked by WTO talks, we
see no indication that ongoing, sporadic negotiations will
provide the leverage that many observers once hoped for to
press Algeria further regarding IPR enforcement.

PIRACY EFFORTS REMAIN STATIC
--------------


6. (SBU) We saw no noticeable improvement in combating
optical or software piracy in 2008, and pirated versions of
movies are widely available for sale not only in markets and
small storefronts, but in European-based grocery chains as
well.

COMMENT: WATCH LIST RECOMMENDED
--------------


7. (SBU) The recent ban on pharmaceutical imports and the
lack of progress on WTO accession talks justify Algeria's
continued listing on the Watch List. It has been only one
year since Algeria was first placed on the Watch List, and we
hope that the signing of the CMAA and possible progress on
cooperative efforts pursuant to our bilateral Science and
Technology Agreement (ref C) will be vehicles for progress on
IPR enforcement in 2009 outside the domain of
pharmaceuticals. We had several fruitful discussions in 2008
and early 2009 with officials in Algerians Customs and the
copyright and trademark offices regarding efforts to step-up
counterfeit detection and interdiction, and several Algerian
officials took advantage of U.S.-sponsored IPR training in

2008. In addition, the Algerian government has made a series
of sometimes conflicting policy pronouncements regarding the
overall foreign investment climate in Algeria (ref D). We
expect more clarity in the second-half of 2009 (in the
aftermath of the April 9 presidential elections) in this
regard. Accordingly, we recommend that Algeria remain listed
on the Watch List as we continue to engage the government.
PEARCE