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
SUBJECT:  BRAZILIAN FEDERAL DEPUTIES DISCUSS PIRACY WITH GAO 
 
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