VZCZCXYZ0010
RR RUEHWEB

DE RUEHBU #0679/01 1612058
ZNR UUUUU ZZH
R 102058Z JUN 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3850
RUCNMER/MERCOSUR COLLECTIVE
RUCPDOC/USDOC WASHINGTON DC

UNCLAS BUENOS AIRES 000679 
 
EB/TPP/IPE FOR RWATTS 
DEPT PLS PASS TO USTR JCGROVES, KKALUTKIEWICZ 
SAO PAULO FOR USPTO DMAZURKEVICH 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: KIPR ECON PGOV PREL AR
SUBJECT: Staffdel Winters in Argentina - Piracy and Television 
Producers 
 
REF: Buenos Aires 350 
 
¶1. (U) This document is sensitive but unclassified.  It should not 
be disseminated outside of USG channels or in any public forum 
without the written concurrence of the originator.  It should not be 
posted on the Internet. 
 
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Summary 
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¶2. (SBU) Staffdel Winters visited Argentina May 26-27 for meetings 
and events focusing on intellectual property issues and business 
operations of U.S. companies and subsidiaries in the television 
broadcast sector.  The delegation attended a conference on fighting 
piracy and counterfeiting that was organized jointly by the GoA and 
private sector featuring the head of the Supreme Court, the Minister 
of Production, and officials from four neighboring countries. 
Discussions of a proposed media law, which would significantly 
affect U.S. television producers and broadcasters operating in 
Argentina, highlighted questions about the law's content, but also 
doubts about its passage in the near future.  Staffdel also 
discussed piracy issues with industry reps and received briefings 
from Emboffs on the proposed media law and law enforcement 
operations against piracy and counterfeiting in Argentina.  End 
Summary. 
 
--------------------------------------------- - 
GoA Co-Hosts "Fight against Piracy" Conference 
--------------------------------------------- - 
 
¶3. (U) The most significant event during the Staffdel visit was a 
conference entitled the "First International Seminar on the Fight 
against Falsification and Piracy," where Argentine Supreme Court 
President (Chief Justice) Ricardo Lorenzetti and Production Minister 
Debora Giorgi provided opening remarks.  The conference was 
presented jointly by the GoA's Federal Administration of Public 
Revenue (AFIP, IRS-equivalent) and an NGO called the Argentine 
Association of the Fight against Piracy (AALP).  The conference also 
featured the heads of both AFIP and Argentine Customs, as well as 
high-ranking representatives of the Customs or tax authorities of 
Uruguay, Brazil, Chile and Paraguay.  AFIP and the AALP signed a 
memorandum of cooperation during the conference, but the AALP Vice 
President told Econoff on June 2 that the text was still being 
vetted by the GoA, adding that the intent was to increase private 
sector cooperation with AFIP and Customs to achieve better 
protection of trademarks in imports and exports. 
 
¶4. (SBU) Chief Justice Lorenzetti focused on property rights in 
general, commenting that his "presence supports this event and the 
importance of creating public security."  Minister Giorgi noted that 
a lack of respect for IP rights discourages investment, and stressed 
both the importance of innovation for job creation, and of "social 
inclusion" in the GoA's economic policy.  AFIP Administrator Ricardo 
Echegaray highlighted Argentine Customs' trademark fraud 
interdiction program, noting that USD 138 million in counterfeit 
goods had been seized since the program began in March 2007 (when he 
was Customs Director).  He called the program the GoA's biggest 
anti-counterfeiting effort ever.  Some Argentine private sector 
speakers noted concerns about La Salada market (highlighted in 
USTR's 2009 Special 301 report as the largest venue for the sale of 
IP-violating products in Argentina), but GoA officials did not refer 
to it in their remarks.  Pablo Gonzalez Suau, the Legal Sub-Director 
of the Chilean tax authority, said that "IP violations are not 
simply a threat against private property, but even more of a threat 
against the rule of law and the government's ability to guarantee 
the safety of its citizens."  The event received wide press 
coverage, with articles in three major dailies and two other online 
news sources (including GoA news agency TELAM). 
 
--------------------------------------------- -------- 
"Media Law" Expected to Cause Problems - If It Passes 
--------------------------------------------- -------- 
 
¶5. (SBU) In addition to a briefing by Emboffs on potentially 
negative free speech implications of a proposed audiovisual law 
(reftel), Staffdel Winters heard from the private sector on how the 
law could affect operations of U.S. businesses in the broadcasting 
sector.  Roxana Kahale (PROTECT), an attorney who represents the 
Television Association of Programmers (TAP, which includes Disney, 
FOX, MTV, and Turner as members), expressed strong concern over 
several aspects of the draft law.  She questioned both the purpose 
and the real impact of anti-trust provisions, complained that some 
versions of the bill would severely restrict cable advertising (the 
current source of about 50% of revenue for distributors), pointed 
out a discriminatory tax on gross revenue of non-domestic (as 
 
defined by amount of local content used) firms and a vaguely defined 
"social tariff" to be assessed on cable operators, and noted that 
there were no provisions in the bill to prevent cable piracy or 
cable operators re-transmitting satellite feeds to subscribers.  She 
also noted that numerous aspects of the law were vague or would be 
defined later by an appointed board, and said that when she had 
discussed some of those with a Secretariat of Communications 
 
official, the official told her that some of the provisions would be 
applied in a more innocuous way than the draft law seems to be 
written.  According to Kahale, the first thing the official said in 
that conversation was, "This is not a Chavista law." 
 
¶6. (SBU) The Staffdel visited the studios of MTV, Disney, and Fox. 
Each of the firms has grown rapidly in recent years, and is 
optimistic for the future despite expecting difficult economic 
conditions in Argentina during 2009.  None of the three firms were 
particularly negative about the audiovisual law, because they see 
little chance of it passing.  (Their perspective on the 
legislation's content was mixed; they saw many provisions as 
problematic, but others as potentially positive, depending on the 
provision and the individual company's business operations.)  Adrian 
Herzkovich (PROTECT), Vice President of Fox Latin American Channels, 
noted that a proposal to revise or replace the existing media law 
tended to come up every couple of years, and none of them had ever 
passed.  He doubted that anything as controversial as the current 
draft could pass given the current divided political scene. 
 
------------------------------------------ 
Piracy, Counterfeiting, and the Tri-Border 
------------------------------------------ 
 
¶7. (SBU) Staffdel also had meetings to discuss piracy in Argentina, 
with a particular focus on activity in the Tri-Border Area (TBA) 
where Argentina meets Paraguay and Brazil.  CAPIF (The Argentina 
Chamber of the Phonographic Industry) Executive Director Javier 
Delupi (PROTECT) discussed piracy issues with Staffdel on May 26, 
but argued that it made little or no economic sense to produce 
pirated music CDs in Paraguay for sale in and around Buenos Aires. 
 
 
¶8. (SBU) Movie industry reps indicated that the same is probably 
true for pirated DVDs, but noted that their anti-piracy efforts were 
facing an uncertain future.  Alejandra Gonzalez Presedo (PROTECT), 
Vice President of Walt Disney Latin America, told Staffdel on May 26 
that the Motion Picture Agency (MPA) had ceased full-time operations 
in Argentina as of January 1, 2009, and that a coalition of local 
studios (including subsidiaries of U.S. studios, such as Disney) was 
trying to re-initiate action.  However, Gonzalez Presedo said that 
it was proving difficult to find much funding in their current 
budgets, and said more direction from company headquarters would be 
essential for efforts to be effective. 
 
¶9. (SBU) Juan Carlos Alesina (PROTECT), MPA's representative in 
Argentina until the office closed in January, said on May 26 that 
they had been actively investigating about 300 legal cases per year. 
 Of the 300 cases during his tenure that had resulted in criminal 
convictions, he pointed out that only 10 of those convicted had 
actually gone to jail, all of whom had previous criminal charges. 
He noted that this raises questions about the deterrent effect of 
current penalties.  Alesina expressed doubt that the IP environment 
will improve given the lack of political will.  He stated that the 
GoA currently doesn't see increased IP protection in the clear 
interest of Argentina, but might be willing to do so in an 
international negotiation, perhaps in exchange for improved market 
access for Argentine exports. 
 
¶10. (SBU) The Immigration and Customs Enforcement (ICE) Attache at 
post also briefed the Staffdel on ICE's operations in the IP area, 
noting that there was significant traffic in pirated and counterfeit 
products through Argentina (usually originating in Asia) to Paraguay 
and on to Brazil, but also from Paraguay into Argentina.  (Argentine 
trademark-holders at the anti-piracy conference claimed that many 
counterfeits of their products, particularly clothing, were imported 
from Paraguay and Bolivia.) 
 
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Comment 
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¶11. (SBU) Argentina has been on USTR's Special 301 Priority Watch 
List for 14 consecutive years, based on lack of effective protection 
for copyright, trademarks, and patents.  At the root of this 
problem,@$`U;> 
SQ=uring Staffdel Winters' meetings, 
is a lack of political will to address those problems.  Minister 
Giorgi's comments during the conference suggest a reason for the 
lack of political will - that while protecting innovation may be 
 
seen positively in the long term, policies of "social inclusion" 
make implementing them difficult at present, as informal vendors of 
illegal goods would be put out of business.  The conference, 
however, showed public GoA support for fighting IP violations at a 
higher level than has been in evidence in several years.  When the 
smoke clears from the June 28 mid-term Congressional elections, we 
may have a better sense of whether the speeches represented a new, 
more serious GOA approach to IP protection. 
 
¶12. (U) This cable was cleared by Staffdel Winters. 
 
KELLY