BRAZIL SCENESETTER: DR. MICHAEL FROMAN, DEPUTY NATIONAL

UNCLAS SECTION 01 OF 07 BRASILIA 000766

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SIPDIS

E.O. 12958: N/A
TAGS: OVIP SENV KGHG ENRG ECON ETRD EINV EFIN PREL BR
SUBJECT: BRAZIL SCENESETTER: DR. MICHAEL FROMAN, DEPUTY NATIONAL
SECURITY ADVISOR FOR INTERNATIONAL ECONOMIC AFFAIRS, JUNE 18-19

(U) This message is sensitive but unclassified, please treat
accordingly.


1. (SBU) SUMMARY: The relationship between the United States and
Brazil is productive and broad-based, with growing economic ties.
Through the financial crisis, Brazil has played a constructive role
in the G20 and has also prioritized concluding the Doha round of
World Trade Organization (WTO) negotiations. Brazil remains
committed to the CEO Forum and your visit provides an important
opportunity to make progress on CEO Forum recommendations. The
country has the potential to play a major role in promoting global
energy security. The Brazilian government seeks to develop a global
market for biofuels and also to bring into production its vast, new
off-shore oil and gas discoveries. In spite of its relatively clean
energy matrix, Brazil is a major carbon dioxide emitter, largely as
a result of deforestation. The Ministry of Exterior Relations (MRE)
has pursued a cautious, defensive approach in international climate
change negotiations, steering clear of any explicit or implicit
obligations to control or reduce emissions. In June, President Lula
suggested in a Reuters interview that Brazil might be willing to
take on targets. This more ambitious stance is something that
Environment Minister Carlos Minc has been advocating for months and
the MRE has been reluctant to adopt. END SUMMARY.

POLITICAL OVERVIEW


2. (SBU) With democracy re-established in 1988 after decades of
military dictatorship, Brazil's democratic institutions are
generally strong and stable. President Luiz Inacio "Lula" da Silva
remains a popular president - one of the most popular in Brazil's
history and indeed in the world today, with recent approval ratings
as high as 68% - as a result of his orthodox economic policies and
expanded social programs. In the Congress, ongoing public scandals
involving the leadership of the Senate and various members of
congress have led to low ratings for the institution among the
Brazilian public. Increasingly, the court system has taken steps to
curb impunity among public officials. These steps have been well
received by a public accustomed to abuses by authorities. Much of
the Brazilian political elite is already looking forward to the
October 2010 Presidential election. Lula is constitutionally barred
from seeking a third term and has designated his Chief of Staff,
Dilma Rouseff as his successor. Lula's personal popularity has thus
far not transferred, and at this point the race remains
unpredictable. Brazilian leaders, however, increasingly have an eye
on the elections in their public statements.


3. (SBU) The United States and Brazil share the basic goals of
fostering hemispheric stability and preventing terrorist and drug
transit activity. The attainment of a permanent seat on the UN
Security Council has been a central goal of Brazil's foreign policy
under President Lula's government. Regionally, Lula has maintained
Brazil's historic focus on stability, seeing dialogue and good
relations with all parties as the best way to achieve this goal. As
a result, Brazil maintains an active dialogue with Venezuela and
Cuba, has worked to foster good relations with Bolivia, has given
its assistance in resolving the FARC hostage crisis in Colombia, and
has stood firmly on the principle of respect for sovereignty in the
region.

ECONOMIC OVERVIEW


4. (SBU) Brazil is the tenth largest economy in the world and
received investment grade from Standard and Poor's and Fitch in

2008. Annual Gross Domestic Product (GDP) grew 5.1 percent in 2008,
and inflation was 5.8%. Prospects for 2009 have been dimmed by the
global economic crisis, taking previous predictions for annual GDP
growth from four per cent to an essentially flat or slight recession
scenario for 2009. Despite this decline in immediate prospects,
Brazil has thus far weathered the crisis better than most major
economies, due in large part to its conservative macroeconomic
policies.


6. (SBU) Brazil is a major producer and exporter. Agriculture
makes up 36 percent of exports, and the agribusiness sector accounts
for 25% of Brazil's GDP. Brazil is a leading exporter of soybeans,
beef, sugar, coffee, and orange juice. Brazil also distinguishes
itself as a major exporter of civilian aircraft, steel, and
petrochemicals. The United States is Brazil's top trading partner
overall, and China has moved into first position as Brazil's primary
export destination.


7. (SBU) Foreign direct investment in Brazil is increasing, with
inflows of USD 44 billion in 2008; USD 6.9 billion came from the
United States. Brazilian investment in the United States almost
tripled between 2001 (USD 1.4 billion) and 2006 (USD 3.9 billion).
President Lula has been actively selling Brazil (including at a
recent Wall Street Journal sponsored investment conference in
Brazil) as a solid investment destination during the financial

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crisis due to its sound macroeconomic policies and relatively strong
economy.


8. (SBU) Despite progress in recent years, income distribution in
Brazil remains grossly unequal, with 10 percent of the population
holding over 50 percent of the nation's wealth. Brazil is home to
50 percent of the people who live in extreme poverty in Latin
America. President Lula's social programs, combined with formal
sector job growth and real increases in the minimum wage, have
reduced income inequalities each year since 2004.


9. (SBU) Millions of Brazilians have moved into the middle class
over the last few years. Nevertheless, roughly forty percent of the
population lives in poverty, a problem that can only be addressed by
sustained long-term growth. Unfortunately, major structural
challenges to long-term growth include a complicated and onerous tax
structure, high interest rates, and cumbersome labor and business
regulations. As a result of its regulatory structure, Brazil ranks
125th in the World Bank Group's Doing Business assessment of
regulatory climate in 181 countries. The informal sector (one of
the largest among large developing economies) constitutes an
estimated 40 percent of Brazil's economy, in large part in response
to the onerous tax and regulatory requirements to participate in the
formal economy. President Lula has vigorously pursued a national
Growth Acceleration Program (PAC) to increase infrastructure
investment in energy, transportation, and sanitation/housing, a
program that has received increased funding as a countercyclical
measure in the face of the economic crisis.


10. (SBU) The global financial crisis has affected Brazilian
companies' exports and access to credit. Brazil's Finance Minister
continues to assert that Brazil is well-positioned to weather the
crisis while he and Central Bank contacts confirm moves to try to
mitigate the effects of the crisis. President Lula, taking a
leading role in the debt over how to handle the economic crisis
including through the G20 process, has criticized actors in
developed countries for sparking a crisis that affects developing
countries. He has called for increased regulation of the global
financial system, increased global access to trade finance, and an
expanded role for large emerging countries like Brazil in
international financial institutions such as the International
Monetary Fund (IMF). The government has reacted to the economic
downturn thus far with a series of piecemeal announcements and
actions aimed at increasing liquidity in the banking system,
stimulating growth through a series of targeted tax cuts, and
seeking to shore up exports.

OVERVIEW ON BRAZILIAN MEDIA AND PUBLIC ATTITUDES TOWARDS THE USA


11. (SBU) In terms of general public opinion, the election of
Barack Obama as president seems to have influenced views of the
United States in a positive way. An Office of Research Opinion
Analysis released in March 2009 found that seven-in-10 Brazilians
believe the Obama presidency will be positive for Brazil and the
world. Economically, Brazilians say their future lies with the
United States and China. Majorities held a favorable view of the
United States (57%) and saw bilateral relations as being good (65%).
However, Brazilians have often seen the United States as an
impediment to Brazil's aspirations for regional leadership.
Pluralities said last year that politically and economically, the
United States was as much a competitor as it was an ally and
partner. As of January, half lack confidence in the United States'
ability to deal responsibly with world problems.


12. (SBU) Brazilian journalists, generally speaking, cannot be
described as "pro-U.S." Some may be favorably disposed toward the
U.S. position on particular issues, such as free trade, and many are
professional and evenhanded in their treatment of the United States,
even if they do not personally agree with U.S. policies. Some
mainstream Brazilian opinion writers demonstrate biases against U.S.
policies, though the trend has started to change with the election
of President Obama. A small segment of the Brazilian public accepts
the notion that the United States has a campaign to subjugate Brazil
economically, undermine it culturally, and occupy with troops at
least part of its territory. Such attitudes and beliefs have
influenced Brazilian reporting and commentary on issues such as the
reestablishment of the U.S. Navy's Fourth Fleet (which has been
characterized as a threat to Brazil) and supposed U.S. nefarious
intentions toward the Amazon. That said, the Brazilian media have
reported favorably on U.S. efforts at the recent meeting of the
General Assembly of the Organization of American States and the
Summit of the Americas, and the Obama Administration overall,
portending a change in perspective with regards to U.S. intentions
in Brazil and the region at large.

SPECIFIC ISSUES: THE CEO FORUM


13. In past Forum meetings, the CEOs prioritized conclusion of a

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Bilateral Tax Treaty (BTT),progress toward a bilateral investment
treaty, and conclusion of the Doha Round. While some progress had
been made in BTT negotiations, it is clear that conclusion of a
treaty will require a strong push at the political level to achieve,
for example, an OECD-standard transfer pricing system which U.S.
BTTs require. Dilma Rousseff will be key to a decision to invest
the political capital necessary to make progress on such issues. On
investment, the USG and the Brazilian government have had productive
consultations on Bilateral Investment Treaty (BIT) elements,
although Brazil is still cautious about negotiating BITs given
historical congressional opposition.

SPECIFIC ISSUES: TRADE


14. (SBU) In recognition of Brazil's growing importance as a world
economy, the USG seeks opportunities for positive bilateral
cooperation on economic issues. After both countries agreed in June
2008 to significantly expand civil aviation opportunities, two U.S.
airlines were granted approval for 21 new frequencies. Further
frequency allocations for 2009 under the agreement have been
allocated. The Brazilian government has expressed interest in
exploring expanded bilateral cooperation on trade issues, bearing in
mind that tariffs can only be negotiated in 4+1 (Mercosul countries
plus external partner) format. Possible ideas Brazil may be
interested to explore include joint Technical Barriers to Trade
(TBT) and/or Sanitary-Phytosanitary (SPS) cooperation, particularly
in developing approaches to third countries; joint agricultural
cooperation to open third country markets; services, which is an
underdeveloped sector; trade facilitation, where Brazil and
industry have expressed a great deal of interest which the Commerce
Department-led Commercial Dialogue has been exploring;
anti-dumping/trade enforcement, given that Brazil is now using this
tool more intensively, there may be scope to explore bilateral
dialogue/best practices. While Brazilian industry has been very
resistant to WTO sectorals such as the Information Technology
Agreement (ITA) or chemicals, and are very focused on maintaining
GSP benefits, there is some strategic thinking going on in the
nationwide and Sao Paulo business associations (CNI and FIESP,
respectively) regarding the need to engage more intensively with USG
on trade, outside the constraints of Mercosul.

SPECIFIC ISSUES: DOHA ROUND


15. (SBU) Brazil has been a significant leader in the WTO's Doha
Round negotiations and was active in trying to broker a deal between
the United States and India. Concluding Doha remains a high
priority for Brazil. However, it has not been receptive to moving
to scheduling before modalities are agreed.

SPECIFIC ISSUES: THE ENVIRONMENT AND CLIMATE CHANGE


16. (SBU) Domestically, Brazil pursues two sometimes-conflicting
goals with regard to the Amazon region. On the one hand, it seeks
to preserve the natural resources and biodiversity found there. To
that end, the law stipulates that landowners in the Amazon region
are supposed to preserve eighty percent of forest on their lands,
and the government has placed large amounts of the forest into
protected areas, such as national parks and indigenous reserves. At
the same time, the national government, states and municipalities
seek economic growth and employment for the approximately 25 million
inhabitants of the region. Thus, since the 1970s the national
government has built a network of roads through the Amazon, which
has opened the region to timber and agriculture (mainly cattle and
soybean) interests.


17. (SBU) Massive and ongoing clearing of the Amazon Forest
releases large quantities of carbon dioxide into the atmosphere.
The Brazilian government estimates that about 75% of the country's
green house gas emissions come from changes in land use and
deforestation. From 1970-2000, Brazil's ranked 6th in the world for
cumulative carbon dioxide (CO2) emissions - the country emitted
51,000 metric tons of CO2 (including land use),about six percent of
the global total. During the same time period, the United States
emitted 137,000 metric tons of CO2 (including land use),about
sixteen percent of the global total, and was ranked number one.


18. (SBU) The Brazilian government has taken a defensive position
on deforestation, most of which is illegal and takes place primarily
on public lands. The government has not been able to establish an
effective presence in the vast Amazon, leaving ranchers and farmers
free to clear government land with relative impunity. Recently, the
national government, some state and local governments,
non-governmental organizations (NGOs),and the business community
have developed initiatives to try to curb the deforestation rate.
In October 2008, the national Amazon Fund received a pledge of up to
one billion dollars from Norway through 2015 and since then Germany
has agreed to contribute several million dollars. To date, this
fund has not approved any projects nor disbursed any funds. The

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State of Amazonas, which includes roughly half the Amazon forest,
created the Foundation Sustainable Amazonas (FAS) to reduce
deforestation by providing regular payments to residents in state
reserves for protecting the forest. The FAS has received pledges of
nearly USD 30 million, including from Marriott Hotels and Coca-Cola.
Various NGOs, such as the Moore Foundation and The Nature
Conservancy, have programs to encourage conservation and to prevent
more of the Amazon from being turned into pastures and soybean
fields.


19. (SBU) The government has stepped up enforcement efforts to stop
illegal clearing and to deny financial credits to farmers and
ranchers operating illegally in the Amazon. These efforts, combined
with a drop in agriculture commodity prices, are expected to result
in a significant decrease in the deforestation rate this year. In
December 2008, the Brazilian government announced as part of its
national climate change plan the domestic goal of reducing the
deforestation rate by about half by 2017.


20. (SBU) Brazil is a relatively "green" country. Hydropower
provides around 85% of Brazil's electricity, and passenger cars now
use more ethanol than gasoline. However, in order to meet growing
demands for electricity that cannot currently be met through
hydropower, the Brazilian government may resort more often to fossil
fuels (which currently provide less than nine percent of Brazil's
electricity).


21. (SBU) In international climate change negotiations, Brazil has
been far less bold and innovative, contending that only developed
countries should be required to assume emission reduction targets.
However, some within the Brazilian government want Brazil to take a
position of leadership on climate change. Although he has yet to
persuade the Ministry of Exterior Relations (the lead on climate
change negotiations),Environment Minister Carlos Minc has said
Brazil and other developing countries should take on emissions
reductions targets in return for financial assistance and technology
transfer. In early June, President Lula suggested in a Reuters
interview that Brazil might be willing to take on emissions targets.
His predecessor, former President Fernando Henrique Cardoso, wrote
an editorial in mid-June calling on Brazil to do just that. While
Minister Minc may have limited influence over shaping Brazil's
negotiating position, President Lula and his closest advisor and
presidential candidate, Minister Dilma Rousseff have much more.
They could steer Brazil's international negotiating policy toward a
more pro-active, ambitious course and away from the current cautious
and defensive tack pursued by the Ministry of Exterior Relations.


22. (SBU) The tremendous international interest in the Amazon has
made many Brazilian officials ultrasensitive on the topic. Further,
a myth has arisen that the United States is interested in militarily
seizing the Amazon either to preserve it or to claim its vast
natural resources.

SPECIFIC ISSUES: G7/8, G20, AND BRICS


23. (SBU) President Lula has said publicly that "the G7 alone is no
longer in a position to make decisions that require truly globally
coordinated responses" and noting that richer countries must
recognize the growing clout of the BRICs. In Paris just before this
week's BRIC Summit in Yekaterinburg, FM Amorim said that the G-8
group is no longer representative of global political and economic
forces. "The G-8 is dead, I have no doubt. I don't know how the
burial will be. Sometimes that happens slowly." GOB remains
sensitive that the G8 plus G5 format not be simply "inviting them in
for coffee" to discuss decisions made by the G8 and has acknowledged
that the format for the Italian Summit plans for broader G5
participation that previous summits. GOB prioritizes the G20
mechanism, while conceding consensus-building can be cumbersome in
this format. As a top-10 GDP country, contacts across GOB believe
Brazil should be at the table in economic decision-making and has a
valuable contribution to make. While the MRE coordinates G20
participation through its Economic Under Secretary, Sherpa Pedro
Mendonca, the G8/G5 process is tracked by its Political Under
Secretary who covers North America/Europe, international
organizations and environment, Vera Machado.

SPECIFIC ISSUES: DEVELOPMENT ASSISTANCE AND FOOD SECURITY


24. (SBU) Development assistance in Brazil is diminishing as
Brazil's economy advances, notwithstanding areas of continued
extreme poverty and sharp regional disparities. Germany and the
European Union lead assistance efforts, much of it dedicated to
forest conservation and sustainable development, while the United
Kingdom is devoting its assistance efforts almost entirely to
climate change mitigation and carbon-free economic growth. USAID
has modest assistance programs in Brazil directed to health and
youth employability in the poor Northeast and to sustainable
development in the Amazon, channeled almost entirely through

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non-governmental organizations. But while the GOB accepts limited
development aid, it does not actively seek assistance, even during
periods of evident disaster assistance needs such as the recent
flooding in the Northeast and in the Amazon. Brazil clearly sees
itself not as a development recipient but as a development partner
in third world countries. Together with Brazil's Ministry of
Foreign Affairs, USAID is developing an MOU that will establish
triangular development assistance relationships with Haiti and with
Portuguese-speaking African countries in the areas of health and
food security. The GOB is confident that it is in an advantageous
position to showcase its tropical agricultural expertise and
experience in HIV/AIDS treatment and actively seeks a partnership of
equals with the U.S. and other developed countries to extend this
success to other countries.

SPECIFIC ISSUES: ENERGY

-AREA FOR COOPERATION: BIOFUELS


25. (SBU) For Brazil, turning ethanol into a world commodity is a
key aspect of increasing energy security. Though Brazilian ethanol
is produced from sugar cane, Brazil sees expansion of the global
ethanol market, regardless of feed stock, as a key interest. In
March 2007, the United States and Brazil signed a Memorandum of
Understanding (MOU) on biofuels cooperation. As a result,
scientists and laboratories from the two countries are
collaboratively researching next generation biofuels technologies.
We are also working together in various multilateral fora to develop
international biofuels standards and sustainability criteria. By
making it easier to treat biofuels as a tradeable commodity, these
standards should foster the emergence of a vibrant global biofuels
market.


26. (SBU) The United States and Brazil are jointly assisting a
group of developing countries in creating their own biofuels
markets, with the goal of reducing their dependence on imported oil.
The joint cooperative effort initially targeted four countries:
Haiti, St. Kitts, El Salvador, and the Dominican Republic. In
November 2008, five new countries joined the group: Guatemala,
Guinea-Bissau, Honduras, Jamaica, and Senegal. Brazil would like to
see the United States aggressively expand these cooperation efforts
to include developing countries in Africa and Southeast Asia, both
as a development tool and as a way to increase the commodity market
for ethanol.


27. (SBU) Modest tax breaks have stimulated the Brazilian domestic
ethanol market and have led new car purchasers to opt overwhelmingly
for "flex-fuel" cars that can run on gasoline, ethanol, or any
combination of the two. In 2008, ethanol surpassed gasoline as the
dominant automotive fuel. Domestic demand consumes 85 percent of
all production. The other 15 percent is exported, primarily to the
United States, making our ethanol import surcharge a continuing
irritant in bilateral relations. The Brazilian government also uses
mandates to promote greater use of biodiesel.

-VAST OIL AND GAS DISCOVERIES


28. (SBU) The discovery in 2007 of potentially massive offshore
("pre-salt") reserves of oil and gas estimated to contain between
30-80 billion barrels of oil equivalent could put Brazil within the
top ten oil countries by reserves. Though the discoveries have
generated a great deal of excitement, industry observers caution
that developments will probably be slow in coming due to the
expensive technological challenges involved with ultra-deepwater
drilling, including a worldwide shortage of equipment such as
drilling rigs.


29. (SBU) Petrobras appears to be overextended internationally and
is hamstrung by limited equipment resources. However, it has
launched a multi-billion dollar procurement initiative and is
reexamining its international priorities so that it can focus on
domestic opportunities, though it remains to be seen how the global
financial crisis will may affect those plans. U.S. oil companies
are poised and ready, in many cases, to take on more exploration
opportunities. Brazil had intended to unveil its long-awaited
proposal for a new oil regime to administer its ultra deepwater
(also known as "pre-salt") oil reserves this week, but reporting
today indicates the proposal will once again be delayed. According
to the Minister of Energy, the new proposed structure will include a
small state-owned company under the auspices of the Ministry of
Mines and Energy, to manage the auctions for pre-salt blocks in the
Santos and Campos Basins. The proposed legislation will contain
safeguards to maintain Petrobras' market position but will remain
open to international oil companies.

-FURTHER ENHANCING ENERGY COOPERATION


30. (SBU) Brazil and the United States have many other common areas

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of interest in the energy sector. The convergence of our interests
offers opportunities to enhance both countries' national energy
security. Building on the success of the biofuels relationship,
Brazil and the United States have identified three new areas of
possible collaboration under a preexisting Memorandum of
Understanding between the U.S. Department of Energy and Brazil's
Ministry of Mines and Energy and established new working groups in
the areas of energy efficiency, clean coal, and nuclear energy. The
United States also has commercial interests, particularly in nuclear
energy, as Brazil looks to expand its civilian nuclear energy
program. For example, Westinghouse is in the running to build four
to eight new nuclear reactors in Brazil over the next ten years.


31. (SBU) The United States would like to parlay these and other
shared interests into support for a hemispheric energy cooperation.
There are many opportunities for joint cooperation including
research and development, energy efficiency, and green technologies.
Brazil has expressed particular interest in exploring energy
efficient housing for low-income citizens under the Energy and
Climate Change Partnership of the Americas.

SPECIFIC ISSUES: THE SEAN GOLDMAN CASE


32. (SBU) American David Goldman is currently pursuing a Hague
Abduction case, involving his son Sean, who was brought to Brazil by
his mother and wrongfully retained here 5 years ago. The case has a
high profile in U.S. and Brazilian media and was raised by both
Secretary Clinton and President Obama during their first meetings
with their Brazilian counterparts. The case is currently in
Brazilian federal court after the maternal family appealed the June
1 decision of the lower court to return Sean to the U.S. Despite
being a party to the Hague Convention on International Child
Abduction, which includes an obligation to resolve all child
abduction cases in a timely manner, the United States currently has
51 open cases with Brazil involving more than 60 children. A recent
op-ed in the Wall Street Journal authored by former State Department
Western Hemisphere Affairs Assistant Secretary Bernie Aronson was
headlined "Brazil Helps Kidnap American Children". Should
interlocutors raise the case, we emphasize that Sean's best interest
would be served by a rapid appeals process in Brazil, and we look
forward to a prompt resolution granting Sean's expeditious return to
the United States.

SPECIFIC ISSUES: DEFENSE COOPERATION


33. (SBU) The first potential watershed in achieving a more robust
defense relationship with Brazil will be the decision on a next
generation fighter aircraft. Boeing's F-18 Super Hornet is a
finalist along with the French Rafale and Swedish Gripen. A
decision will be made in June 2009, with a final contract award in
October. It would be difficult to overstate the significance of
Brazil's Air Force committing to a U.S. aircraft as its primary
fighter for the next generation. Boeing's proposal combines
cutting-edge technology with a strong package of industrial
cooperation. Boeing will has made a strong case that its offset
package offers greater economic benefits to Brazil than its
competitors, but there is still a perception that the USG is not
behind the sale, a perception heightened by the more active advocacy
role taken by the leaderships of France and Sweden.

SECURITY SITUATION IN BRAZIL


34. (SBU) Political and labor strikes and demonstrations occur
sporadically in urban areas and may cause temporary disruption to
public transportation. Naturally, protests anywhere in the world
have the potential to become violent. In addition, criminal
organizations, during 2006, staged several violent campaigns against
public institutions in the Sao Paulo State leading to a large number
of deaths. While it is unlikely that U.S. citizens would be targeted
during such events, U.S. citizens traveling or residing in Brazil
are advised to take common-sense precautions and avoid any large
gatherings or any other event where crowds have congregated to
demonstrate or protest.


35. (SBU) Crime throughout Brazil (especially Rio de Janeiro) has
reached very high levels. The Brazilian police and the Brazilian
press report that the rate of crime continues to rise, especially in
the major urban centers - though it is also spreading in rural
areas. Brazil's murder rate is more than four times higher than
that of the United States. Rates for other crimes are similarly
high. The majority of crimes are not solved.


36. (SBU) Street crime remains a problem for visitors and local
residents alike, especially in the evenings and late at night.
Foreign tourists are often targets of crime and Americans are not
exempt. This targeting occurs in all tourist areas but is especially
problematic in Rio de Janeiro, Salvador and Recife.


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37. (SBU) The incidence of crime against tourists is greater in
areas surrounding beaches, hotels, discotheques, bars, nightclubs,
and other similar establishments that cater to visitors. This type
of crime is especially prevalent during Carnaval (Brazilian Mardi
Gras),but takes place throughout the year. While the risk is
greater at dusk and during the evening hours, street crime can occur
both day and night, and even safer areas of cities are not immune.


38. (SBU) At airports, hotel lobbies, bus stations and other public
places, incidents of pick pocketing, theft of hand carried luggage,
and laptop computers are common. Travelers should "dress down" when
outside and avoid carrying valuables or wearing jewelry or expensive
watches. "Good Samaritan" scams are common. If a tourist looks
lost or seems to be having trouble communicating, a seemingly
innocent bystander offering help may victimize them. Care should be
taken at and around banks and internationally connected automatic
teller machines that take U.S. credit or debit cards. Carjacking is
on the increase in Sao Paulo, Recife and other cities.


39. (SBU) Travelers using personal ATMs or credit cards sometimes
receive billing statements with non-authorized charges after
returning from a visit to Brazil. The Embassy and Consulates have
received numerous reports from both official Americans and tourists
who have had their cards cloned or duplicated without their
knowledge. Those using such payment methods should carefully monitor
their banking online for the duration of their visit.


40. (SBU) While the ability of Brazilian police to help recover
stolen property is limited, it is nevertheless strongly advised to
obtain a "boletim de ocorrencia" (police report) at a "delegacia"
(police station) whenever any possessions are lost or stolen. This
will facilitate the traveler's exit from Brazil and insurance
claims.


41. (SBU) In many countries around the world, counterfeit and
pirated goods are widely available. Transactions involving such
products may be illegal under local law. In addition, bringing them
back to the United States may result in forfeitures and/or fines.

COMMENT


42. (SBU) With growing economic clout and increasing interest in
engaging in global economic issues, Brazil has seen its importance
on the world stage expand significantly. It is a major player in
the region and while the government is largely friendly and open to
the United States, they do not and will not always see eye to eye
with us. Energy and climate change are promising areas for
collaborating with Brazil. Your visit offers the opportunity to
highlight how important Brazil is in this effort and underline our
strong interest in expanding our cooperation. END COMMENT.

SOBEL