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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
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Nike Views
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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.
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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.
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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
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