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### Viewing cable 05LIMA3289, PERUVIAN GOVERNMENT STRENGTHENS ANTI-PIRACY EFFORTS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05LIMA3289 | 2005-08-01 20:19 | 2011-05-30 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Lima
Appears in these articles: elcomercio.pe

`

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

` `

    UNCLAS SECTION 01 OF 03 LIMA 003289

    SIPDIS

    DEPT FOR WHA/AND, EB/IPE SWILSON
    COMMERCE FOR 4331/MAC/WH/MCAMERON
    DOC FOR J. BOGER
    USPTO FOR J. URBAN
    LOC FOR S. TEPP
    USTR FOR J. CHOE-GROVES

    SENSITIVE

    E.O. 12958: N/A
    TAGS: ECON ETRD KIPR PE

    id: 37757
    date: 8/1/2005 20:19
    refid: 05LIMA3289
    origin: Embassy Lima
    classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY
    destination:
    header:
    This record is a partial extract of the original cable. The full text of the original cable is not available.

    ----------------- header ends ----------------

    UNCLAS SECTION 01 OF 03 LIMA 003289

    SIPDIS

    DEPT FOR WHA/AND, EB/IPE SWILSON
    COMMERCE FOR 4331/MAC/WH/MCAMERON
    DOC FOR J. BOGER
    USPTO FOR J. URBAN
    LOC FOR S. TEPP
    USTR FOR J. CHOE-GROVES

    SENSITIVE

    E.O. 12958: N/A
    TAGS: ECON ETRD KIPR PE
    SUBJECT: PERUVIAN GOVERNMENT STRENGTHENS ANTI-PIRACY EFFORTS

    ¶1. (SBU) Summary.  The GOP, recognizing that intellectual
    property violations have escalated in recent years, is
    making a concerted effort to improve its anti-piracy
    efforts.  Indecopi, Peru's IPR administrator, continues to
    work closely with the tax agency SUNAT and the police and
    has conducted 14 raids this year, confiscating almost $1
    million worth of pirated goods.  The latest major raid on
    July 20 netted more than 8 tons of merchandise worth
    approximately $300,000.  The GOP is also working to improve
    anti-piracy efforts at Lima's Port of Callao, and has co-
    located an Indecopi official at Customs to help prevent
    pirated goods from entering Peru.  While Indecopi and SUNAT
    have yet to establish a registry of imported blank optical
    discs, officials are soliciting advice from the private
    sector and foreign government officials.  Several illegal
    vendors have recently approached Indecopi to ask for special
    incentives in return for legitimatizing their business.  End
    Summary.

    Actions Against IPR Violators
    -----------------------------

    ¶2.  (SBU) During the first half of 2005, Indecopi, the local
    tax and customs agency SUNAT and the Peruvian National
    Police (PNP) conducted 18 raids on known locations in Lima,
    confiscating $950,000 worth of pirated goods.  To date,
    Indecopi and the police have seized 43,191 VCDs and 34,339
    DVDs.  The agencies are also investigating several local
    distributors, looking for any links between the distributors
    and the importers of blank optical discs.

    ¶3.  (U) Indecopi, SUNAT, and police officials, working from
    information provided by the Anti-Piracy Crusade, raided El
    Hueco, one of Peru's largest informal markets, in downtown
    Lima on July 20.  Over 400 police and customs officers, as
    well as 30 prosecutors, raided more than 250 storefronts and
    stalls in El Hueco at six in the morning.  During the raid,
    officers confiscated more than 8 tons of merchandise,
    including DVDs, worth approximately $300,000.

    Improved GOP Coordination
    -------------------------

    ¶4.  (SBU) Over the past six months, Indecopi and SUNAT
    officials have met with members of the Anti-Piracy Crusade
    in an effort to not only improve coordination but also to
    establish new ideas on how to counter piracy.  On June 15,
    SUNAT Director Nahil Hirsh authorized Indecopi to place an
    overseer at the Customs premises at the Port of Callao.
    (Note:  Callao is Peru's largest port with over 80 percent
    of all container traffic.  End Note.)  The Indecopi
    official, working with Customs, reviews the shipping
    manifests of all imported optical disks deliveries to ensure
    that no pirated materials enter Peru.  If Indecopi finds
    pirated materials in any of the shipments, it now has the
    right to seize them, even before the shipment is cleared by
    Customs.

    ¶5.  (SBU) The Indecopi official will also coordinate with
    SUNAT and Customs on the best way to deal with imports of
    blank optical disks.  According to Hernan Viviano, General
    Manager of Warner Brothers and a member of the Anti-Piracy
    Crusade, Indecopi and SUNAT plan to pinpoint importers for
    future investigations.  While the GOP agencies have yet to
    fully establish a registry of imported blank optical discs,
    officials from SUNAT and Indecopi have been in contact with
    officials from Paraguay about their program.

    ¶6. (SBU) The Anti-Piracy Crusade is also working with
    Indecopi and SUNAT to establish a new regulation that would
    mandate all importers to pay VAT tax on blank optical discs
    at the port of entry.  Importers would then recoup their VAT
    by deducting it from future legitimate sales of blank
    optical discs.  According to Martin Moscoso, head of
    Indecopi's copyright office, the proposed regulation would
    target importers that sell their discs to pirates, who do
    not pay taxes on their products.  These importers would thus
    be unable to recover their losses, making piracy less
    profitable.  Indecopi, SUNAT and the Anti-Piracy Crusade are
    currently putting together a working group, made up of
    government and public sector representatives, which will
    determine the VAT amount to be paid by each importer.  Once
    the draft regulation is finalized, members of the Anti-
    Piracy Crusade members will meet with importers to lobby for
    their support of the bill.

    Missing Link: the Lima Government
    ---------------------------------

    ¶7.  (SBU) Although GOP officials are improving coordination,
    Moscoso points out that they need help from local
    governments, particularly the Municipality of Lima.  In
    October 2004, the Lima Government approved Municipal
    Ordinance 717, which established as a priority the fight
    against intellectual property rights violations.  Under the
    law, the Lima Government is allowed to sanction, close and
    decommission any shops that violate their permits by
    distributing, selling or producing pirated goods.  According
    to Moscoso, the local government has failed to uphold this
    law and instead allows shops to sell "blatantly illegally
    produced products."  The Lima Government, in retaliation,
    claims that it does not have the tools to determine whether
    goods are real or fake and that Indecopi should work more
    closely with local police.

    ¶8.  (SBU) The Ambassador met with Lima Mayor Luis Casteneda
    in early June to discuss this issue.  Casteneda informed the
    Ambassador that he has met with members of the Anti-Piracy
    Crusade and has encouraged them to work with the local
    police to conduct more raids.  He noted, however, that the
    Lima Government is unable to counter piracy through the
    permit process because the permits are too general.

    Illegal Vendors Want Legitimacy
    -------------------------------

    ¶9.  (SBU) During a meeting with Indecopi's Martin Moscoso on
    July 26, he noted that raids are only effective to a point.
    While the GOP has conducted over 15 raids in 2005, he
    argued, to be successful, officials would have to conduct
    raids on a daily basis, which under current budget
    restrictions is unlikely.  Additionally, Moscoso pointed out
    that many police are corrupt and turn a blind eye to IPR
    violations in exchange for a bribe.  Many of the local
    illegal distributors are fed up, as the bribes are becoming
    too costly.  A Commission of sellers from El Hueco met with
    officials from Indecopi, Video Andes (which controls 70
    percent of the legal DVD market) and Sony in mid-July to
    discuss the possibility of formalizing its sales of pirated
    discs.  The commission noted that it would be willing to pay
    taxes and copyright fees, under special agreements.
    According to Moscoso, legal distributors would have to
    approve any type of special commercial agreement.  He
    mentioned that this type of deal occurred in Guadalajara,
    Mexico and could perhaps serve as a model for Peru.

    Comment
    -------

    ¶10.  (SBU)  The GOP's recent ant-piracy actions are an
    indication that IPR is becoming a higher priority.
    Unfortunately, Indecopi, SUNAT and the police all lack the
    financial resources to stamp out IPR violations.  Indecopi
    officials have acknowledged privately that raids only do so
    much, as many of the stalls and shops reopen the following
    day with more pirated goods.  The GOP must get to the root
    of the problem and prevent the illegal reproduction of
    goods.  Vendors wanting to become more legitimate is a step
    in that direction.

    ¶11.  (SBU)  One thing remains clear:  the GOP needs to
    institute a registry to track the 120 million blank optical
    discs that enter Peru annually.  It would be helpful if
    officials from the Patent and Trade Office, as well as U.S.
    Customs, could help deliver this message during the proposed
    IPR training seminar in late October.

    STRUBLE

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