VZCZCXRO4615
RR RUEHRG
DE RUEHSO #0910/01 2301504
ZNR UUUUU ZZH
R 181504Z AUG 06
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC 5648
INFO RUEHBR/AMEMBASSY BRASILIA 6722
RHEHNSC/NSC WASHDC
RUCPDOC/USDOC WASHDC 2546
RUEHMN/AMEMBASSY MONTEVIDEO 2123
RUEHBU/AMEMBASSY BUENOS AIRES 2414
RUEHSG/AMEMBASSY SANTIAGO 1845
RUEHLP/AMEMBASSY LA PAZ 2977
RUEHPE/AMEMBASSY LIMA 1049
RUEHCV/AMEMBASSY CARACAS 0365
RUEHBO/AMEMBASSY BOGOTA 1428
RUEHRG/AMCONSUL RECIFE 3093
RUEHRI/AMCONSUL RIO DE JANEIRO 7372
RUEHAC/AMEMBASSY ASUNCION 2733
RUEATRS/DEPT OF TREASURY WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEAWJC/DEPT OF JUSTICE WASHDC

UNCLAS SECTION 01 OF 02 SAO PAULO 000910 

SIPDIS 

SENSITIVE 
SIPDIS 

DEPT FOR WHA/BSC AND EB/TPP/IPE 
STATE PASS TO USTR FOR MSULLIVAN 
STATE PASS EXIMBANK 
STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE 
NSC FOR FEARS 
USDOC FOR 4332/ITA/MAC/OLAC 
USDOC FOR 3134/USFCS/OIO 
USDOC ALSO PASS PTO/OLIA TREASURY FOR OASIA, DAS LEE AND JHOEK DOL FOR ILAB MMITTELHAUSER DOJ FOR CMERRIAM AID/W FOR LAC/AA 

E.O. 12958: N/A 

TAGS: KIPR ETRD ECON KJUS BR

BRAZIL'S NATIONAL PLAN TO COMBAT PIRACY: AN UPDATE ON IMPLEMENTATION EFFORTS 

REF: A) Brasilia 599 

¶1. SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY 

¶2. (U) Summary. At the July 26 Sao Paulo meeting of Brazil's National Council to Combat Piracy and Intellectual Property Crimes, the public-private Forum Against Piracy and Illegality (FNCP) officially became an autonomous unit of the Council. The meeting reviewed the past year's implementation of the Council's 99 measures to combat piracy and outlined the FNCP's proposed actions during this election year. These FNCP actions include presentation of a petition to all candidates for political office recommending public policies to combat piracy, a national public/private awareness campaign, and continuing public debates to gather support and momentum. The Council and the Sao Paulo State Interagency Committee Against Piracy closed the meeting with a detailed review of their 2006 -2007 action plans to combat piracy, defined by a combination of law enforcement, educational, preventive and economic measures. End Summary. 

¶3. (U) July marked the first autonomous meeting of the FNCP, an organization conceived within the National Council to Combat Piracy and Intellectual Property Crimes (itself formed in November 2004), and composed of private, state, and social enterprises joined together to combat piracy in its various forms. The role of the FNCP is threefold: (1) to formulate a permanent discussion and debate framework on combating piracy, (2) to be a channel of communication between the state-sponsored federal Council and society at large, and (3) to continuously enlist the active participation of all current and future members of FNCP in the ongoing national struggle to combat piracy.

 ¶4. (U) FNCP President Paulo Rosa, also the President of the Brazilian Association for the Recording Industry, introduced a petition for signature that would be presented to all political candidates, containing suggested public policies to be implemented in the fight against piracy, contraband and copyright violation. All members present were urged to sign, and the petition is expected to be delivered to candidates within 15 days. Rosa hopes that the petition will stimulate debate during the election campaign, especially if presented in terms of loss of jobs and tax revenue, both of which directly affect all voter communities. According to FNCP sources, piracy accounted indirectly for the loss of 496,000 jobs in 2005, and resulted in another approximately 154,000 jobs not being generated in the formal economy. It caused a loss of USD 2 billion in tax revenues for the federal government, while the manufacturing sector was denied production and sales worth USD 5.4 billion. 

¶5. (U) At the meeting three federal Congressional Deputies, all up for re-election, each reiterated that piracy is not a problem that is coming across the Paraguayan border in stuffed shopping bags, but rather a structured, illegal trade activity conducted within Brazil by well-organized gangs. According to FNCP Executive Secretary Alexandre Cruz, this illegal trade has grown 25% in the past 12 months. Not only is the problem endemic among the Brazilian public, it also encompasses many legitimate businessmen and government officials. The President of the Parliamentary Investigative Committee (CPI) on Piracy, Federal Deputy Luiz Antonio Medeiros, whose testimony led to the incarceration of Brazilian-Chinese businessman (and counterfeit smuggler) Law King Chong in 2004,  stated that both Sao Paulo and Brasilia are major centers in Latin America for pirated, counterfeit and smuggled goods. He cited as an example the plaza in front of the Congress in Brasilia, known as the "Paraguayan Marketplace." Although located in direct sight of law enforcement officials, the market manages to sell all types of counterfeit and pirated goods. Deputy Julio Semeghini mentioned that it is not surprising to see high-ranking government officials in the crowded market purchasing products side by side with the public. 

¶6. (U) The meeting closed with the National Council to Combat Piracy and Intellectual Property Crimes and the Sao Paulo State Interagency Committee to Combat Piracy presenting their current and future plans to combat piracy. Both organizations pursue a combination of preventive, educational, economic, and law enforcement measures in combating piracy. Each works in coordination with local, state and federal law enforcement and has been successful in lobbying the government to obtain increased funding for law enforcement operations to combat piracy. 

¶7. Comment. (SBU) The formation of the FNCP is a positive step in Brazil's continuing fight against piracy. Its members cross the broad spectrum of industries that are affected by these illegal actions, from the recording, motion picture, and software industries to manufacturers and publishing companies. Working as an autonomous unit, FNCP should be able to serve as a channel between public and private forces, stimulating continued debate, awareness and action against this ever increasing problem. Brazil cannot afford to weaken its present position given the high economic cost in lost sales, impact on jobs, and lost tax revenues. End Comment. McMullen