This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BRASILIA 000222 

SIPDIS 

SENSITIVE 

STATE FOR WHA/BSC AND EB/TPP/MTA/IPC 
PLS PASS USTR FOR SCRONIN AND CBURKY 
USDOC FOR 4322/ITA/MAC/WH/WBASTIAN/JANDERSEN/DMCDOUGALL 
USDOC FOR 3134/USFCS/OIO/WH/DDEVITO/DANDERSON/EOLSON NSC FOR MDEMPSEY 

E.O. 12958: N/A 
TAGS: KIPR EIND ECON KCRM PGOV BR IPR
Refs: A) 2003 Sao Paulo 2199 
B) 2003 Brasilia 3868 

¶1. (U) This is an action request - see para 9. 

¶2. (U) Summary: Members of Brazil's Federal Chamber's Investigative Commission (CPI) on Piracy briefed visitors from the U.S. General Accounting Office and Emboffs on January 20. Describing the work of the CPI and the extent of the piracy problem in Brazil, the federal deputies expressed their appreciation of the interest of the U.S. Congress in this issue and signaled their desire for further consultations in Washington. Biopiracy, threats to health and safety, raising public consciousness and addressing the root causes of piracy were among the issues covered. The CPI is making preparations for drafting its final report (expected in June), planning town hall meetings in several cities to engage the public as well as a working group session with private-sector representatives next week in Brasilia. End Summary. 

¶3. (SBU) Just returning from the holidays to an extraordinary session of the Congress called by the President, Brazilian Federal Deputy Luiz Medeiros (PL-SP), met with visitors from the U.S. General Accounting Office and Emboffs on January 20. Medeiros presided over an hour-long session that included expositions from other CPI members on subjects ranging from biopiracy to China, questions and answers from the GAO team, and his own vignettes from investigations. He began the meeting by extolling the CPI's work and reputation. He recognized that piracy in Brazil is intimately linked with corruption, organized crime and the drug trade, citing the case of three shopping centers selling pirated goods in Sao Paulo, owned and operated by the Chinese mafia, that were temporarily shut down last month through the efforts of the CPI and enforcement officials (see ref A). 

¶4. (SBU) Medeiros also highlighted the negative consequences of piracy on economic development as evinced in the case of a Toshiba factory in Brazil considering closure due to the unfair competition from contraband and pirates. According to Medeiros, police discovered a factory assembling Toshiba laptop look-a-likes with used contraband computer parts, posing as a computer repair shop. Before police could initiate an investigation and raid, a federal judge intervened attesting to the legitimacy of the repair shop. The CPI later discovered that the judge in question was himself under investigation in Operation Anaconda, a wide-ranging Federal Police corruption investigation. More than simply a question of tax evasion, job losses and trampled intellectual property rights, pirated, often sub-standard, goods such as medicines and auto-parts present a real threat to the health and safety of Brazilians, he said. 

¶5. (SBU) The extension of the CPI until June 2004 and the formation of a Congressional caucus ("Frente Parlamentar" in Portuguese) devoted to the issue of piracy and tax evasion evidenced the strong public support of the CPI's work, according to Medeiros. Therefore, the CPI has an obligation to provide realistic proposals for improving the situation. Toward that end, the CPI has maintained a very open atmosphere, seeking input from the private sector, law enforcement officials, and the judiciary. While the CPI has supported public awareness campaigns, such as the Anti-Piracy Day activities (see ref B) Medeiros told us that CPI wants to involve the general public in formulating its report. Depending on the availability of funding, the CPI hopes to hold several town-hall meetings in large cities around the country to get feedback from Brazilian citizens on how to effectively combat piracy. He invited Emboff to participate in a working group session with private sector representatives to be held in Brasilia February 4. Medeiros, however, noted the absence of contact from the Interministerial Committee to Combat Piracy (CICP), the executive body formed by the GoB in 2001, although he made no mention of inviting input from the CICP. He said that the CPI would seek modifications to the CICP, but did not elaborate further. 

¶6. (SBU) Approximately 10 deputies on the CPI joined the discussion, many praising the U.S. Congress's interest in their legislative effort to address piracy. Deputy Sarney-Filho (PV- MA), a former Minister of Environment, stressed the need for a wider vision of the problem to include biopiracy and trafficking in protected species. Sarney-Filho encouraged Brazil's support for transnational legislation to address piracy in all of its forms. Other deputies spoke of the difficulties enforcement officials face with minimal resources, inadequate laws (for example, the requirement for indefinite storage of seized goods), and at times an unsupportive judiciary. They asked for information on U.S. legislation and procedures regarding seizures and targeted customs inspections. Vanessa Grazziotin (PCdoB-AM) noted that China receives more than its fair share of criticism as a supplier of pirated goods to the world, saying other Asian and East European countries merit investigation as well. She spoke of the difficulty customs inspectors faced in differentiating between simply contraband goods and pirated goods. Recognizing that poverty plays a significant role in Brazil's piracy problem, deputies discussed the merits of seeking ways to increase the cost of pirated goods as well as lower the cost of legitimate products. 

Comment ------- 

¶7. (SBU) The CPI members clearly stated their desire to produce a useful and relevant document, and to have a long-term impact on the Federal Government's treatment of the piracy issue. They are cognizant of the difficulties ahead, including the five-month timeframe in which they must complete their work. The CPI has thus far managed to avoid becoming politicized. Engaging the general public as fully as they have engaged the private sector will assist in producing a balanced set of proposals and lessen the possibility that the final report is perceived as primarily pro-private sector to the detriment of the larger Brazilian populace. 

¶8. (U) The CPI is working to keep the issue in the spotlight. Since the beginning of the year, the "Estado de Sao Paulo" newspaper, with the country's second-largest circulation, has published at least two articles featuring the Association for Protection of Intellectual Property (ADEPI) and the CPI. One editorial cited the "real possibility" of U.S.-applied commercial sanctions against Brazil due to the country's failure to effectively combat piracy, a reference to the GSP review of last October. A recent RadioBras (Brazil's National Radio) report featured the CPI and the Interministerial Committee as two of the main fronts in the fight against piracy, working to educate and protect the Brazilian public. Maintaining this positive momentum after the CPI's closure will be a challenge, an issue likely to be addressed by private sector representatives at the February 4 working group session with the CPI. 

¶9. (SBU) Meeting with members of the U.S. Congress active on piracy issues is high on the CPI's agenda, and may in part explain their willingness to meet with us at such an inopportune time. IPR trade associations are working to organize a Brazilian legislators' visit to the U.S. in late March, one aim being meetings with members of Congress's two Piracy/IPR caucuses. Mission strongly recommends that the Department facilitate such meetings and looks forward to communicating details of the visit through the appropriate point of contact in the Legislative Affairs Bureau as soon as they are available. 
HRINAK