Reference ID: 07PRAGUE274       

Created: 2007-03-15 15:42    

Released: 2011-08-30 01:44       

Classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY    

Origin: Embassy Prague

            


VZCZCXRO6665

OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA

RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG

DE RUEHPG #0274/01 0741542

ZNR UUUUU ZZH

O 151542Z MAR 07

FM AMEMBASSY PRAGUE

TO RUEHC/SECSTATE WASHDC IMMEDIATE 8753

INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

RUCPDOC/DEPT OF COMMERCE WASHDC


UNCLAS SECTION 01 OF 02 PRAGUE 000274

 

SIPDIS

 

SIPDIS

SENSITIVE

 

STATE FOR EUR/NCE EFICHTE AND EB/IPE JBOGER

STATE PASS USTR FOR JCHOE-GROVES AND WMOORE

COMMERCE FOR 4232/ITA/MAC/MROGERS

COMMERCE PASS USPTO

STATE PASS LIBRARY OF CONGRESS

 

E.O. 12958: N/A

TAGS: KIPR ETRD ECON EZ

SUBJECT: CZECH REPUBLIC: ACTIONS TO COMBAT PIRACY AT BORDER

MARKETS

 

REF: A. PRAGUE 160

 

     ¶B. PRAGUE 244

     ¶C. STATE 7944

 

¶1. (SBU) Summary and Comment: Post continues to believe that

the Czech Republic should remain off the Special 301 Watch

List. Because of the overall positive assessments in previous

Special 301 reviews, combined with the fact that the

complaints from the recording industry came to our attention

only at the launch of the current Special 301 cycle, the USG

has not engaged the Czech government in a sustained manner on

the border markets. Likewise, there has not been adequate

industry-to-government coordination. Absent this

coordination, placement on the Special 301 Watch List does

not seem to us warranted. Rather some form of special mention

may be more appropriate this year.

 

¶2. (SBU) Summary and Comment Continued: Further, industry

appears split on how to engage the Czechs. The International

Federation of Phonographic Industry (IFPI) argues for

placement of the Czechs on the Watch List because of a lack

of cooperation with local authorities. However, Nike

representatives informed Econoff March 15 that placement on

the Watch List will hurt the already good cooperation with

local authorities that they have. Nike also explains that

they similarly had good cooperation with Greek officials on

fighting piracy, but saw that cooperation came to an abrupt

end after placement on the Watch List.

 

¶3. (SBU) Summary and Comment Continued: Czech law

enforcement, private industry and embassy officials will

coordinate their efforts to meet this challenge. Embassy

personnel will visit the markets to survey their activities,

petition the government for raid and market closure

statistics to measure progress, and encourage Czech

collaboration with Germany and Austria authorities to put an

end to "pirate tourism". In six to eight months, post will

review efforts and determine whether more needs to be done in

focusing attention and action on this issue, such as media

events and public diplomacy.  End Summary and Comment

 

------

Nike Views

------

 

4.(SBU) During a visit to the Cheb Asian Dragon Market on

March 7, 2007 (reftel B), Econoff noted that 30%-40% of

vendors open for business were selling mostly low quality

shirts, sweaters, bags, and footwear with famous brand name

logos like Nike, Reebok, and Dolce & Gabbana, all of which

appeared to be counterfeit. Approximately 5%-10% of the

stalls had DVD and CD displays, again, all of which appeared

to be counterfeit. Despite the conspicuous display of shoes

and textiles for sale, Nike feels differently than IFPI on

how to address the Czechs on the issue. Nike and IFPI are,

nonetheless, in agreement that Czech authorities need to pay

more attention to licensing and monitoring of these markets.

 

-----

Czech Action Plan

-----

 

5.(SBU) Following a March 8 promise to Department of Commerce

Assistant Secretary Bohigian to address music and film

industry concerns regarding the growth of piracy sales at

border markets located around the country, Czech Deputy

Minister of Trade and Industry Martin Tlapa convened an

intra-ministerial meeting March 14 to discuss ways to tackle

the problem. Econoff met with Ministry of Trade and Industry

Trade Policy Coordinator Adela Pristasova to learn the

outcome of the meeting.

 

6.(SBU) Pristasova said that the Czech government places a

high priority on combating IPR theft at the border markets

and plans to continue to address the issue. Unfortunately,

Pristasova said no specific new initiatives were agreed upon

at the March 14 meeting. The ministry will coordinate with

other ministries and members of parliament to see the passing

of the following laws in 2007:

 

-- Law on Consumer Protection and Customs Enforcement amended

to strengthen the provision for registering vendors (vice

stall owner who may live overseas).

-- New criminal code that will increase fines and punishment

 

PRAGUE 00000274  002 OF 002

 

 

for IPR violations.

-- Copyright Act expected to be amended again for further

accordance with EU law

 

7.(SBU) Pristasova stressed that since May 2006 when a new

law on Consumer Protection and Customs Enforcement went into

force that gave greater law enforcement competency to the

Customs Directorate to combat piracy, the number of raids and

seized goods has increased. According to Customs data that

she provided, Customs has been performing a raid every three

calendar days and seizing more than 2600 DVDs and CDs per

raid. Pristasova also explained that the Czech Small Business

and Tradesman Licensing Office, an inspectorate under the

authority of the Ministry of Trade and Industry with 550

personnel, revoked 84 trade licenses and issued 2760 fines

valued at CZK 3,800,000 (USD 200,000) in 2006 against market

place vendors for selling pirated goods.

 

---------

Embassy Action Plan

---------

 

8.(SBU) Throughout the coming year, Post plans to raise

awareness of the piracy issue with Czech authorities through

Ambassadorial engagement at multiple levels, working with

industry groups, and encouraging greater cross border

cooperation with Austria and Germany.

 

¶9. (SBU) The Ambassador will focus attention on the size of

the problem and the harm it has done to both Czech and U.S.

industries in future meetings with senior government

officials. The Ambassador intends to discuss the issue with

Prime Minister Topolanek, Interior Minister Langer, and Trade

and Industry Minister Riman, whom the Ambassador is scheduled

to meet March 20 (septel will follow). The Ambassador also

intends to discuss the issue with Members of Parliament from

regions with large open air markets and directly with

governors and other senior officials when he visits the

border regions.

 

10.(SBU) In the past few months, the recording industry

representatives have provided a wealth of information about

conditions on the border markets. Czech officials are still

working to assess industry claims and to respond to the

situation in the markets. Post will work with industry groups

and GOCR officials to establish a more collaborative

relationship, ideally including support in the form of, for

example, training and conferences for Czech officials.

 

11.(SBU) Post will help direct industry groups and the Czech

government to solicit help from Austria and Germany, which

are the source of customers for the border markets.  Post

believes that German and Austrian officials can better inform

tour companies and operators of "pirate tourism" about the

harm and legality of purchasing pirated goods.

MUNTER