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RUEHTU/AMEMBASSY TUNIS 1948

C O N F I D E N T I A L CASABLANCA 000883 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR NEA/MAG AND NEA/PI 
 
E.O. 12958: DECL: 07/14/2020 
TAGS: ECON PGOV MO
SUBJECT: HACKING ISRAEL AND PIRATING MOVIES: TALES FROM THE MOROCCAN 
BLACK MARKET 
 
Classified By: Principal Officer Douglas Greene 
for reasons 1.4 (b) and (d) 
 
¶1.  (C)  Summary:  The black market still thrives in Casablanca 
despite the Intellectual Property Right (IPR) provisions of various 
bilateral and multilateral agreements to which Morocco is a party. 
Although there are occasional high profile arrests and confiscations 
of pirated goods by GOM authorities, a general lack of opportunity in 
the formal sector continues to draw the talents of technologically 
proficient, entrepreneurial youth.  These young entrepreneurs apply 
their skills to everything from illegally downloading Hollywood films 
to descrambling television satellite signals for unrestricted access. 
 Local computer savvy youth also hack internet web sites for fun, 
profit, or in some cases, as direct retaliation for Israeli military 
actions.  End Summary. 
 
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Derb Ghalef- Anything For A Price 
---------------------------------- 
 
¶2.  (U)  Econoff visited Derb Ghalef, a Casablanca neighborhood 
notorious for its prominent black market medina, where local 
residents boast "anything can be bought for the right price."  Large, 
dirty and noisy, Derb Ghalef bustles with energy and illicit economic 
activity.  Walking through the narrow maze of alleyways, one passes 
innumerable small, seemingly improvised storefronts selling 
everything from televisions, computers and cell phones to household 
goods, automotive parts and knock-off designer clothing.  Product 
inventory is diverse and consumer activity intense.  As Econoff 
wandered the medina, the most popular products appeared to be 
satellite descramblers, cell phones and of course, pirated films. 
 
¶3.  (U)  The business of selling pirated movies on Digital Video Disc 
(DVD) has grown visibly more sophisticated over the past year as 
black market retailers have adopted business practices redolent of 
Western video rental stores while also expanding their presence 
throughout the greater Casablanca area.  While some pirate DVD 
retailers still sell their wares from large, unorganized bins, others 
have designed their small shops to mimic miniature Blockbuster video 
stores, complete with DVDs organized by current releases, favorite 
actors and popular movie genres. 
 
¶4.  (U)  DVD pirates have also begun pricing DVDs according to the 
quality of the reproduction (master copies downloaded from the 
internet are more expensive than dubbed copies filmed in movie 
theaters with hand-held cameras).  Meanwhile, movie pirates continue 
to rely on individual sales agents who set up shop on street corners 
and sell products from portable stands and the trunks of automobiles, 
all in view of local police. 
 
¶5.  (C)  While often ignored by Moroccan law enforcement authorities, 
the profession is not without occasional risk.  On July 14 local 
press reported that Moroccan authorities arrested one of Derb 
Ghalef's more prominent counterfeiters and confiscated more than 
170,000 DVDs.  The police claim it is the largest seizure of private 
DVDs in Morocco to date.  Nonetheless, since the arrest DVD retailers 
seen by Econoff on several street corners appeared unconcerned about 
the arrest and carried on with business as usual. 
 
------------------------------------------- 
Downloading by Day, Hacking Israel by Night 
------------------------------------------- 
 
¶6.  (C)  Meanwhile recent articles in the Moroccan and international 
press report that a group of computer savvy youth in Derb Ghalef 
hacked into over 700 Israeli web sites in response to Israeli 
military actions in Gaza early in July.   The hacker group, which 
calls itself "Team Evil", replaced the home pages of target web sites 
with the following text: "Hacked by Team-Evil Arab hackers u Klll 
palestin people we Kill Israel servers" (sic). 
 
¶7.  (C)  After widespread reporting in the local press, GOM law 
enforcement rounded up an unconfirmed number of Derb Ghalef youth in 
connection with the hacking.  In contrast to the recent confiscation 
of DVDs, these arrests sent a noticeable chill through the infamous 
neighborhood as young computer "professionals" promptly shut off 
their cell phones.  The swift action by Moroccan law enforcement 
demonstrates that while illegal economic activity often receives 
inconsistent attention, potential threats to Moroccan security or 
foreign policy interests command, understandably, a more immediate 
response.  [Interestingly (though perhaps somewhat conspiratorially), 
some business contacts insist the round-up was more about recruitment 
than enforcement, stating that "Team Evil" is now most likely working 
 
for the GOM Ministry of Interior (MOI).  "That's how things work 
here," explained one business contact.] 
 
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Comment 
------- 
 
¶8.  (C)  Morocco continues to face challenges in absorbing its 
considerable informal sector into the formal economy.  To some 
extent, lack of opportunity in the formal sector for its 
entrepreneurial youth encourages them to apply their talents in the 
profitable informal sector.  While IPR concerns here are not solely 
the result of those factors, the issues they raise, once again, 
underscore the importance of supporting the development of the formal 
economy, with greater friendliness toward SMEs. 
 
 
GREENE