VZCZCXRO6049
RR RUEHRN
DE RUEHMD #2101/01 3181535
ZNR UUUUU ZZH
R 141535Z NOV 07
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 3784
INFO RUEHSS/OECD POSTS COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 3171

UNCLAS SECTION 01 OF 03 MADRID 002101 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
EUR/WE 
EEB/IFD/OMA 
 
E.O. 12958: N/A 
TAGS: EAGR ECON EFIN ELAB ETRD KIPR PTER SOCI TBIO
SP, EINV 
SUBJECT: MADRID WEEKLY ECON/AG/COMMERCIAL UPDATE REPORT - 
NOVEMBER 5 - NOVEMBER 9 
 
 
MADRID 00002101  001.2 OF 003 
 
 
Not for Internet Distribution. 
 
Table of Contents: 
 
KIPR: GOS IPR conference, bilateral 
EFIN: Finance Ministry investigates suspicious financial 
transactions involving 500 euro notes 
PTER/EFIN: Police monitor some 700 mosques for possible 
terrorism finance ties 
EINT: OECD Study shows Spanish high-speed internet slow and 
expensive 
TBIO/EAGR: Spain abstains on EU vote on Austrian agriculture 
biotechnology ban 
ETRD/TBIO: EU biodiesel board vs US biodiesel imports 
ELAB: Incentives for delaying retirement 
 
GOS IPR CONFERENCE, BILATERAL 
 
¶1. (U) The Ministry of Industry, Tourism and Trade sponsored 
a November 7-8 "Conference on Intellectual Property Rights in 
the Digital Environment" that included representatives from 
the USG (Associate Register of Copyrights David Carson), 
France, the UK and Korea, as well as representatives of 
content providers, Internet Service Providers (ISPs) and 
consumers.  Secretary of State for Telecommunications 
Francisco Ros opened the conference.  The content provider 
and ISP representatives aired their well-known disagreements. 
 The Spanish government spokesmen did not take sides. 
However, the Secretary of State's Chief of Staff, Juan 
Junquera Temprano, made a very strong statement to the effect 
that copyright levies are not compensation for peer to per 
file sharing.  This was important because the logical 
conclusion to this statement is that peer to peer file 
sharing therefore either has to be suppressed and/or 
compensated in some other way.  Carson's presentations on the 
Digital Millennium Copyright Act were well received. 
 
¶2. (SBU) DCM Llorens, accompanied by Carson,  U.S. Patent and 
Trademark Office Senior Counsel Michael Shapiro and Economic 
Officer, participated in a November 7 bilateral with 
Secretary of State Ros on Intellectual Property Rights 
 
SIPDIS 
issues.  The DCM congratulated Ros on the conference 
initiative and reiterated per the Special 301 demarche our 
interest in deeper IPR cooperation with Spain.  Ros responded 
that perhaps more judge-to-judge meetings would be a good 
idea.  We will follow up on this idea.  The DCM hosted a 
lunch for GOS officials and stakeholders that participated in 
the conference on November 8.  That also went well, although 
content providers expressed frustration with ISP lack of 
willingness to assume more responsibility for protecting 
intellectual property on the internet and with the government 
for not being more decisive.  The Ministry of Industry 
representative urged the relevant industries to agree upon a 
notice system to begin with. (Comment: This conference was 
certainly a worthwhile event, but it is clear that the GOS 
will not undertake major IPR initiatives prior to the March 
2008 parliamentary elections.  We think the judge-to-judge 
initiative is a good idea, although only likely to pay 
dividends in the medium term.  We think the Ministry of 
Industry's idea to pursue a notice system for now, leaving 
takedown for later, is the most promising avenue for more 
short-term success in protecting copyrights on the internet. 
We will be exploring with stakeholders the possibility of 
making this happen.  End Comment.) 
 
FINANCE MINISTRY INVESTIGATES SUSPICIOUS FINANCIAL 
TRANSACTIONS INVOLVING 500-EURO NOTES 
 
¶3. (SBU) An estimated 30 percent of all the 500-euro notes 
issued by the European Central Bank circulate in Spain, which 
has long given rise to suspicions that money laundering is a 
big problem in the country.  In 2005, there were 2,140 
suspicious transactions involving 500-euro notes.  The 
Finance Ministry has also added the number of suspicious 
transactions for 2003, 2004 and 2006 and says there were 
13,500 such transactions involving over 6 billion euros.  The 
Ministry of Finance is creating an additional 30 suspicious 
transaction inspection units.  Inspectors working at the 
Ministry had requested the formation of 100 such units. 
(Comment: There is no doubt that there is a problem in Spain 
with respect to money laundering.  Banks are probably 
relatively compliant on money laundering matters, but the GOS 
needs to do a better job of monitoring real estate agencies, 
notaries and other non-banking institutions.) (El Pais, 
11/4/07) 
 
 
MADRID 00002101  002.2 OF 003 
 
 
POLICE MONITOR SOME 700 MOSQUES FOR POSSIBLE TERRORISM 
FINANCE TIES 
 
¶4. (SBU) Many of the mosques are not registered and are 
really more informal gatherings of the faithful.  In Spain, 
religious organizations have to register in order to qualify 
for tax and/or other benefits.  An unnamed Ministry of 
Interior official is quoted as being "worried" about the 
funds that might be raised in Spain's mosques. (Comment: 
Stories about mosques being under surveillance have appeared 
in the press in the past.  We are trying to find out more 
about the form that this reported surveillance takes.) (El 
Pais, 11/4/07) 
 
OECD STUDY SHOWS HIGH-SPEED INTERNET SLOW AND EXPENSIVE 
 
¶5. (U) According to the OECD study, in October 2007, 
downloading speed in Spain was 6.901 megabytes per second, 
somewhere in the middle of the OECD, compared with 8.860 
megabytes per second in the U.S. and 93.693 megabytes in the 
leader, Japan.  Monthly high-speed internet bills amounted to 
USD 67.70 in Spain, at the high end of the OECD, compared 
with USD 53.10 per month in the U.S.  Finland had the lowest 
bills at USD 31.10 per month.  (Comment: This information 
comes as no surprise.  Embassy consumers of home internet 
uniformly report relatively lengthy high-speed internet 
connection times and high prices, despite some competition to 
the dominant carrier, Telefonica.) (El Pais, 11/6/07) 
 
SPAIN ABSTAINS ON EU VOTE ON AUSTRIAN AGRICULTURE 
BIOTECHNOLOGY BAN 
 
¶6. (U) Spain's anti-biotechnology minister of the environment 
recently took a small, small step in favor of agriculture 
biotechnology.  In two previous European Union (EU) Member 
State votes on Austria's ban of agriculture biotechnology, 
Spain along with a majority of Member States supported 
Austria, denying the European Commission (EC) the ability to 
take action against Austria.  However, in a third vote on 
October 31, 2007, the minister changed Spain's position from 
one supportive of Austria's agriculture biotechnology ban to 
"abstention" in the vote.  In doing so, she criticized 
Austria for not putting forward a credible defense of its ban 
of agriculture biotechnology policy for all EU Member States. 
 
¶7. (U) As a result of this last round of voting, it appears 
that the EC now has the ability to acquire that Austria end 
its ban.  However, some are reporting that the EC may go easy 
on Austria, only requiring that it end its ban of imported 
corn for use in the feed and processing sectors.  If the EC 
takes this action, it appears that Austria would retain the 
ability to ban the planting of agriculture biotechnology, 
which would still appear to be a contravention of the EC's 
international biotechnology responsibilities. 
 
EU BIODIESEL BOARD VS US BIODIESEL IMPORTS 
 
¶8. (U) The European Biodiesel Board (EBB) has asked the 
European Commission (EC) to apply all the trade measures 
possible to counter the effects of a U.S. biodiesel subsidy 
scheme.  The EBB claims that U.S. biodiesel producers benefit 
from domestic raw material subsidies and a $1.00/gallon 
biodiesel blending subsidy (B99) that encourage U.S. 
biodiesel exports to the European Union at landed prices 
below break-even prices for European-produced biodiesel.  The 
EBB has asked the EC to force a change in U.S. legislation 
through any and all means at its disposal, including 
countervailing duties or a World Trade Organization complaint. 
 
¶9. (U) According to the EBB, the B99 subsidy also encourages 
triangular trade with biodiesel producers and traders from 
third countries like Malaysia and Indonesia.  Reportedly, 
these producers export biodiesel to U.S. blenders who 
"splash" (blend) it with mineral diesel, which then qualifies 
them to receive the $1.00/gallon-B99 subsidy.  The biodiesel 
is then exported (dash) to Europe, where it then becomes 
eligible for additional European subsidy schemes.  The EBB 
claims the B99 has created a surge of biodiesel exports to 
Europe through this "splash and dash" loophole, with total 
imports of biodiesel at 700,000 tons since January 2007, as 
compared to 90,000 tons in all of 2006. 
 
INCENTIVES FOR DELAYING RETIREMENT 
 
¶10. (U) For those willing to prolong their work life beyond 
65 there soon will be an incentive of up to 15% increases in 
 
MADRID 00002101  003.2 OF 003 
 
 
their retirement packages.  The Minister of Labor and Social 
Issues, Jesus Caldera announced that a new law will be 
approved by the Senate in the coming days.  In an agreement 
reached by labor unions and employers, workers will see their 
pension grow at least 3% for every year worked beyond 65 with 
the maximum being 15% once reaching 70.  Employers will not 
be liable for social security contributions for workers over 
¶65.  The Minister noted that 17% of Spaniards are over the 
age of 65 and the longevity increases every year.  Life 
expectancy in Spain is one of the highest in the world at 80 
years.  Currently, 47 percent of Spaniards retire before 65, 
and the average retirement age is 63.5. 
AGUIRRE