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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 
 
------ 
Nike Views 
------ 
 
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. 
 
----- 
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. 
 
--------- 
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