The Power of the Line: How the NIV Section Helps Protect

UNCLAS SECTION 01 OF 02 MEXICO 000398

SIPDIS

STATE FOR EEB/IPE STEPHEN KEAT

E.O. 12958: N/A
TAGS: KIPR ECON CONS CVIS
SUBJECT: The Power of the Line: How the NIV Section Helps Protect
IPR in Mexico


1. (U) Summary: Mexico's federal enforcement agencies continue to
make improvements in intellectual property rights (IPR) protection
and enforcement; however, IPR violations - including piracy,
smuggling, and triangulation - occur with alarming regularity in
Mexico. Some of these illicit activities are unwittingly facilitated
by consular officers who issue visas to the violators. By
understanding the scope of the problem, the U.S. interest in
upholding regulations, and the power of existing law, nonimmigrant
visa sections can be a powerful ally in the fight to protect IPR in
Mexico.

BACKGROUND

2. IPR protection and enforcement is an issue of significant
concern in Mexico, both because of the enormous volume of trade that
takes place between the United States and Mexico as well as the
proven ties between counterfeit and pirated goods and
narco-traffickers and organized crime operating in Mexico. Because
of the proximity of the U.S. to Mexico and the existing trade links
between the U.S. and China, IPR violators commonly transit the U.S.
with their illegal purchases.

3. Over a billion dollars a day in trade crosses the U.S/Mexico
border, much of it legal and beneficial to both economies. However,
an inestimable amount of cross-border goods makes its way to
Mexico's black and gray markets. From unregulated vendors selling
pirated DVDs for fifty cents each, to small vendors selling
clothing, shoes, or perfumes purchased in the U.S. and brought into
Mexico with false certificates of origin, to highly organized
smugglers offering everything from stolen electronics to automatic
weapons, the black market is an integral part of the Mexican economy
and depends heavily on the U.S. to function.
Stories from the Visa Line

4. A successful trafficker requires a United States visa to transit,
for example, through a U.S. airport on a buying trip to China or
Taiwan, or to shop at the outlet malls in McAllen, TX. The stories
below are examples of actual cases that consular officers have seen
on the visa line and the types of cases new officers are trained to
watch for.
Chinese Visas

5. A pattern of extensive international travel is usually a good
sign in a visa interview, however consular officers in Embassy
Mexico City nonimmigrant visa unit began to realize that in some
cases consistent travel to China and/or Taiwan may indicate that the
applicant is in fact a trafficker of smuggled goods. In one case an
officer noticed that an applicant renewing his U.S. tourist visa had
seven Chinese visas in his Mexican passport. The applicant told the
interviewing officers that over the last three years he had traveled
to China and Taiwan at least 50 times. When the officer asked the
applicant why he made so many trips he showed the officer his fake
"Gucci" wallet and "Rolex" watch, and said that he sold such items
in his store in Tepito, a notorious black market area in Mexico
City. The applicant used his U.S. visa both to travel back and
forth from China, and to pick up goods once they had arrived in Los
Angeles. Similar tales have been told by other visa applicants
stating that they applied for U.S. visas make travel to China easier
and cheaper and to allow them to purchase goods in black markets in
Los Angeles.
Triangulation

6. A common occupation listed for applicants in Mexico is "clothing
sales" or "business owner." These are often legitimate vocations,
but not infrequently a brief interview and a close examination of
the applicant's passport and the NIV database will reveal more
worrying activity. A common scenario would be as follows: An
applicant works in an area flea market. She claims that she wishes
to go across the border to buy new products in discounts stores with
the goal of re-selling them in the flea market. When asked about
payment of taxes, the applicant states that she pays approximately
USD 15 in taxes at the border for the USD 500 worth of goods she
purchased for resale. This scenario illustrates an illegal activity
referred to as triangulation - the intentional obfuscation of the
origin of a good in order to circumvent the costly tariff imposed by
Mexican authorities on goods from the country of origin but not on
NAFTA partners. Triangulation undermines U.S. Trade agreements by
negating the advantage that American producers should have in
Mexican markets. It is also illegal in the United States
Crime Begets Crime


7. Cases similar to the one described above, though on a larger
scale also illustrate the link between trafficking in illegal goods
and other illegal activity. In one such case, a married couple who
frequently traveled to Los Angeles to buy significant quantities of
discount clothing for resale in Mexico were issued visas based on
their high solvency and regular travel. A few months after their
visas were issued, posts' Fraud Prevention Unit (FPU) cancelled the

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visas when the husband was arrested for involvement with "Los Zetas"
- a notorious criminal organization associated with drug cartels in
Mexico. This case and others like it demonstrate that the
willingness to participate in one illegal activity can indicate a
proclivity for other illegal behavior.

Taking Action


8. In the cases described above Consuls issued visas to the
applicants because there was no obvious "immigrant intent"; the crux
of Section 214(b) of the Immigration and Nationality Act and the
foundation on which consular officers adjudicate nonimmigrant visas.
These applicants use their visas to travel to or through the United
States and then return to their businesses in Mexico. At first
blush, they appear to be easy renewals. Some of these applicants,
however, are using their visas to contravene U.S. law and as such
violate Section 214(b),which prohibits issuing visas whose purpose
of travel is unlawful.


9. Working in conjunction with the economic section and Immigration
and Customs Enforcement (ICE),the Investigative arm of IPR issues
for DHS, consular officers presented a DVC to entry-level officers
in consular sections throughout Mission Mexico, explaining the
importance of IPR protection and enforcement, describing indicators
that may suggest IPR violations, and reminding officers that per 9
FAM 41:31 N 4.1, visas should be refused if the officer has reason
to believe or know that the applicant will use it to engage in
unlawful activities, thus empowering consular officers to stop IPR
violations when recognized at the visa window. This training and
the attention it focused on the seriousness of IPR issues to the USG
quickly changed how consular officers responded to these cases on
NIV lines across Mission Mexico. Telltale warning signs are now
investigated more carefully to determine if possible illegal
activity is occurring. If it is, then the cases are refused. This
additional training and management support for this new scrutiny has
allowed consular officers to help proactively in achieving USG
policy objectives and has assisted ECON and DHS in their efforts to
present a united Mission-wide front in assisting the government of
Mexico in the ongoing battle against IPR violations. (U)
BASSETT