GOK AND CORPORATIONS HOST FIRST-EVER TRAINING

UNCLAS SECTION 01 OF 02 KUWAIT 001060 SENSITIVE SIPDIS DEPARTMENT FOR NEA/ARP; EEB/IPE; STATE FOR JASON BUNTIN E.O. 12958: N/A TAGS: KIPR EIND EINT ETRD KU SUBJECT: GOK AND CORPORATIONS HOST FIRST-EVER TRAINING SESSIONS TO COMBAT COUNTERFEITING ¶1. (SBU) SUMMARY: On October 26 and 27, Kuwait's General Administration for Customs held its first-ever training sessions for customs inspectors designed to combat trade in counterfeit goods in collaboration with the Ministry of Commerce, the Brand Owners Protection Group, and American-based companies. This pioneering training session was initiated in an effort to train roughly 150 customs inspectors from Customs and the Ministry of Commerce on how to identify imitation products, effectively communicate intelligence updates, and profile counterfeit product shipments. In conversations with Econoff, officials from Kuwaiti Customs, the Ministry of Information, Microsoft and Ford Motor Company described a commitment to dealing with counterfeit goods. Corporate representatives also detailed the financial commitment their companies are making to combat IPR violations in Kuwait. END SUMMARY. SPIRIT OF ENFORCEMENT STRONG, BUT THE LAW IS WEAK ¶2. (SBU) Econoff met with the GoK official responsible for seizing illicit materials, Tareq Al-Ajmi, Assistant Undersecretary for Press & Journalism Affairs, Ministry of Information on October 6 and Osama Al-Shami, the Kuwaiti Customs official responsible for organizing the training, on October 27. Both Al-Ajmi and Al-Shami frankly discussed the trials and frustrations associated with disposing of materials confiscated during raids, dealing with corrupt inspectors, and their personal concerns about enforcing IPR codes that carry such light penalties for counterfeiters. Repeatedly each official expressed the view that the spirit of enforcement is present in Kuwait, but the weakness of the law prevents IPR codes from being effective. ¶3. (SBU) Al-Shami expressed pride at the inaugural training sessions and declared the training of roughly 150 customs inspectors an overall success. American-based companies such as Philip Morris, Nike and Ford sent materials and representatives to talk about brand integrity and anti-counterfeiting techniques specific to their brands. MICROSOFT: PIRACY ERODES INVESTOR CONFIDENCE ¶4. (SBU) When Econoff spoke with corporate representatives from Microsoft and Ford Motor Company on October 22 and 28 respectively, they also blamed counterfeit trade in Kuwait on light penalties. Microsoft's Country Manager, Ehab Mostafa, claimed that 61% of all Microsoft software used in Kuwait is pirated. Mostafa contended that he is combating piracy and counterfeit products on several fronts and is working with the Ministry of Information to conduct raids on piracy shops. He detailed his plans for a USD 280,000 startup scholarship for a young Kuwaiti to establish an IT business and thus expand knowledge about how piracy erodes confidence levels in the investment environment. Mostafa added that he is managing a study on the loss of competitive advantage by the GoK as a direct result of piracy. Mostafa claims that Microsoft is investing five to six U.S. dollars of every 10 U.S. dollars Microsoft makes in Kuwait, as a show of commitment to the GoK. Echoing Mostafa's concerns, Kuwait Customs's Al-Shami separately acknowledged to Econoff that Microsoft had downgraded its presence in Kuwait as a consequence of rampant piracy. FORD: COUNTERFEITERS TARGET EXPIRED WARRANTY CAR OWNERS ¶5. (SBU) Alexander Liske, Brand Protection Manager, Ford Middle East, told Econoff on October 28 that Ford just recently expanded its brand protection operations into Kuwait. Liske detailed how Ford has hired lawyers, investigators and informants to work with him to target local mechanics selling counterfeit Ford products to car owners with expired warranties. While Liske could not offer quantitative data, he did note that the prevalence of counterfeit products in Kuwait appears to be lower than other Gulf countries. Ford sent Liske to determine how prevalent counterfeit products are in Kuwait. Liske also noted that counterfeiters had many ways to disguise their goods. They could price the knock-off product close to the authentic, so that consumers would not think they were purchasing a counterfeit product or could brand counterfeit items after they pass through customs. Liske praised the Customs' training effort and looked forward to more opportunities in the future for corporate-GoK cooperation to raise awareness and improve IPR enforcement. ¶6. (SBU) COMMENT: Despite a commitment to enforcement, the limited legal consequences for violators continue to encourage IPR scofflaws. Until such time as the GoK moves on the long-pending draft Copyright Law, however, increased KUWAIT 00001060 002 OF 002 government-private sector cooperation on enforcement, as initiated in this training, may represent the best chance to strengthen the protection environment. The private sector's interest and commitment could also help encourage the GoK to move on the law. END COMMENT. ********************************************* ********* For more reporting from Embassy Kuwait, visit: visit Kuwait's Classified Website at: http://www.intelink.sgov.gov/wiki/Portal:Kuwa it ********************************************* ********* JONES