VZCZCXRO1087
PP RUEHDE RUEHDH RUEHDIR
DE RUEHRH #1425/01 3001026
ZNR UUUUU ZZH
P 271026Z OCT 09
FM AMEMBASSY RIYADH
TO RUEHC/SECSTATE WASHDC PRIORITY 1788
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHFJUSC/US CUSTOMS SERVICE WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 RIYADH 001425 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR FOR CHRIS WILSON, JASON BUNTIN 
STATE PASS TO DOC FOR STEVEN GARRETT 
DEPT FOR NEA/ARP, EB/TPP/BTA, E FOR U/S ROBERT HORMATS 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR ECON EINV PREL SA
SUBJECT: AUSTR CHRIS WILSON VISIT TO SAUDI ARABIA 
 
REF: A. 09 RIYADH 524 
     ¶B. 09 RIYADH 575 
     ¶C. 09 RIYADH 789 
     ¶D. 09 RIYADH 793 
     ¶E. 09 RIYADH 982 
     ¶F. 09 JEDDAH 297 
     ¶G. 09 RIYADH 1202 
     ¶H. 09 RIYADH 1366 
     ¶I. 09 RIYADH 1375 
 
Summary 
------- 
 
¶1. (SBU) Assistant U.S. Trade Representative for Europe and 
the Middle East Chris Wilson visited Riyadh October 16 to 20 
at the invitation of Deputy Minister of Commerce and Industry 
Abdullah Al-Hamoudi.  In all of his meetings, Wilson 
delivered the clear message that the U.S. government 
recognizes Saudi Arabia's significant progress on IPR 
protection and awareness.  Wilson also said the USG would 
like to see Saudi Arabia make the improvements necessary to 
move beyond the Special 301 process and towards a more mature 
trade relationship.  Wilson candidly requested assistance in 
addressing the challenge of how to recognize Saudi Arabia's 
progress while taking into account high piracy rates, 
particularly in the area of copyright protection.  He noted 
specific action on imposing deterrent penalties on copyright 
violators, actions to support a legal market, like software 
audits, and reports on SAG actions to date would help Saudi 
Arabia make a case for removal from the Watch List.  This 
dilemma was understood and many responded with concrete 
examples of progress on copyright, patent, and trademark 
protection which will be submitted by November 23 for 
inclusion in the Special 301 Out-of-Cycle Review.  Several 
interlocutors requested USG and industry training and 
technical assistance.  The Saudis are eager to have their 
hard work acknowledged and to move our trade and investment 
dialogue to a more positive framework.  End summary. 
 
¶2. (SBU) During his recent five-day visit to the Kingdom, 
AUSTR Chris Wilson met with several Saudi government 
officials and industry representatives, including: 
 
-- Minister of Commerce and Industry Abdullah Alireza 
-- Minister of Culture and Information Abdulaziz Al-Khoja 
-- Chairman of the Board of Grievances Ibrahim Al-Hogail 
-- Saudi Arabian General Investment Authority (SAGIA) 
Governor Amr Al-Dabbagh (septel) 
-- King Abdulaziz City for Science and Technology (KACST) 
President Mohammed Al-Suwaiyel 
-- Saudi Food and Drug Authority (SFDA) President Mohammed 
Al-Kanhal 
-- Director General of the Saudi Customs Authority Saleh 
Al-Khilewy (septel) 
-- Saudi Arabia Standards Organization (SASO) Governor Nabil 
Molla 
-- Assistant Secretary for Economic Affairs at the Gulf 
Cooperation Council (GCC) Mohammed Al-Mazrouy (septel) 
-- Gulf Standards Organization (GSO) Director Anwar 
Al-Abdullah 
-- Deputy Minister of Culture and Information Abdulrahman 
Al-Hazzaa 
-- Deputy Minister of Agriculture Dr. Abdullah Al-Obaid 
-- Intellectual Property experts from the Ministry of 
Commerce and Industry 
-- Pharmaceutical Industry representatives 
-- Copyrights holders representatives 
 
Beyond Special 301, Towards a Knowledge Economy 
--------------------------------------------- -- 
 
¶3. (SBU) Saudi officials, including the Ministers of 
Commerce, and Culture and Information, stressed the 
importance of the U.S.-Saudi trade relationship, though 
expressed concern over the decline in U.S. investment in the 
Kingdom relative to other countries (septel).  Minister of 
Commerce and Industry Alireza called for the Trade and 
Investment Framework Agreement (TIFA) talks to be held at the 
ministerial level to elevate the trade relationship.  The 
next TIFA meeting will likely be held next year in Saudi 
Arabia. Alireza expressed interest in meeting USTR Ambassador 
Kirk at the earliest possible opportunity, either at the TIFA 
talks in Saudi Arabia or on the margins of upcoming trips to 
the U.S. 
 
RIYADH 00001425  002 OF 003 
 
 
 
¶4. (SBU) The Ministers of Commerce and Culture, as well as 
the SAGIA Governor, framed our bilateral work on IPR 
protection within the context of their long-term commitment 
to implementing King Abdullah's vision to develop a 
knowledge-based economy.  Minister of Commerce Alireza said 
he was focused on developing "software more than hardware," 
meaning he is concentrating on education, training, and 
knowledge to grow Saudi Arabia's economy.  Removal from the 
301 Watch List would be one step towards fulfilling their 
longer-term commitment to the King.  Several officials, 
including the Chairman of the Board of Grievances, emphasized 
the religious implications of IPR violations, which are 
considered "haram" or forbidden in Islam as they constitute 
theft. 
 
Copyright Protection 
-------------------- 
 
¶5. (SBU) Several Saudi officials understood the importance of 
implementing a software audit to ensure they are in 
compliance with Saudi law.  The Commerce Ministry has 
selected a company to modernize and upgrade its information 
technology capacity -- a process which includes an audit to 
ensure the Ministry's software is licensed.  The Ministry of 
Culture and Information has committed to working with the 
Commerce Ministry to conduct and publicize its own audit. 
The Commerce and Culture Ministries intend to use their audit 
experiences to encourage other ministries to conduct their 
own audits. 
 
¶6. (SBU) Wilson emphasized the importance of the Saudi 
government's referring a copyright case to the Board of 
Grievances, the Kingdom's highest court capable of sentencing 
violators to imprisonment, in his meetings with the Minister 
and Deputy Minister of Culture and Information.  Deputy 
Minister Al-Hazzaa said that the Violations Review Committee 
(VRC), which he chairs, understands that pirates will only 
reduce their activities once they perceive a real threat of 
punishment.  In that regard, the VRC is working towards 
referring a case to the Board, as demonstrated by the recent 
decisions to fine two violators the maximum penalty (100,000 
SAR each).  Al-Hazzaa said this thorough approach would 
improve the chances that an offender would receive a sentence 
from the Board of Grievances that would actually serve as a 
deterrent because it will demonstrate that the VRC left no 
stone unturned. 
 
¶7. (SBU) Al-Hazzaa said the number of raids, street 
inspectors, public awareness campaigns, and VRC cases had 
increased significantly in the past year, an indication of 
how serious his ministry is about IPR enforcement and 
awareness.  As a new member of the Riyadh City Council, 
Al-Hazzaa said he discussed greater cooperation between his 
Ministry and the police, Interior Ministry, and other 
security forces on copyright protection.  Al-Hazzaa 
reiterated his need for support from the private sector, 
specifically in updating the ministry's website, training and 
deploying inspectors, and raising awareness. 
 
Patent Protection 
----------------- 
 
¶8. (SBU) Pharmaceutical industry representatives lauded the 
King's approval of the Exclusive Marketing Rights agreement 
(septel) and noted progress on data exclusivity protection, 
specifically the June data protection workshop held in 
Riyadh.  The President of the Saudi Food and Drug Authority 
(SFDA), the regulatory body responsible for data protection, 
said his organization would continue to work on data 
exclusivity issues and looks forward to attending the next 
workshop, to be held in Riyadh in November.  Although 
industry representatives were withholding ultimate judgment 
on the newly-formed SFDA's capacity, they applauded the 
SFDA's outreach to industry to date, noting that the SFDA 
accepted 80 percent of industry's input when developing their 
regulatory framework.  SFDA has also officially recognized 
PhRMA, which Wilson noted is a significant step. 
 
Trademark Protection 
-------------------- 
 
¶9. (SBU) The Ministry of Commerce and Industry reported 
significant progress in trademark protection since the 
 
RIYADH 00001425  003 OF 003 
 
 
trademark law was passed in 1999.  The maximum fine has 
increased from 50,000 SAR to 1 million SAR, the number of 
inspectors has grown from 60 to 400, and the number of 
branches has expanded from 18 to 28.  In partnership with the 
Customs Authority, the Commerce Ministry's Department for 
Prevention of Commercial Fraud reports it has brought 361 
cases to the court and seized 22,000 spare parts in the past 
nine months.  The Department requested USG assistance in 
alerting the Customs Authority of counterfeit shipments 
destined for the Kingdom. 
 
Judicial Capacity 
----------------- 
 
¶10. (SBU) The Chairman of the Board of Grievances emphasized 
his court's strong, faith-based commitment to IPR protection, 
and said he had "no doubt" the Saudi judiciary could protect 
investors' rights. The Board has led by example, conducting 
its own 1.5 million SAR audit through Microsoft to ensure its 
software is fully-licensed.  The Board also screens the 
websites it uses to order legal publications to ensure they 
are fully-licensed.  The Chairman said the Board is committed 
to training its judges on IPR protection and values the 
training the U.S. has conducted to date.  The Board members 
"could not underscore more" how interested they are in 
additional training in the U.S.  They could send 10 to 12 
judges to "see the U.S. judicial system at work" to a course 
tailored to their needs and conducted in Arabic.  They 
stressed the importance of Arabic translation in any training 
program. 
 
Origin Labeling Requirements 
---------------------------- 
 
¶11. (SBU) Wilson discussed industry's need for clarification 
on origin labeling requirements with the Customs Authority 
and the GCC Secretariat (septels).  Al-Hamoudi suggested 
creating a mechanism within the TIFA for trade facilitation 
issues to include representatives from the Saudi Ministry of 
Commerce and Industry, Customs Authority, Ministry of 
Finance, and SFDA. 
 
Government Procurement 
---------------------- 
 
¶12. (SBU) Wilson told Al-Hamoudi that the USG would like to 
see Saudi Arabia accede to the Government Procurement 
Agreement (GPA) of the WTO, as committed at the time of the 
Kingdom's WTO accession.  The Department of Commerce is 
prepared to provide technical assistance by hosting a 
workshop, and Al-Hamoudi said his Ministry was working on 
potential dates for the event.  Al-Hamoudi welcomed the 
bilateral cooperation and said he would suggest it as an 
activity under the bilateral TIFA.  The Saudis are conducting 
an internal evaluation in parallel to determine the benefits 
of joining the GPA, and Al-Hamoudi emphasized that bilateral 
technical assistance was different from cooperation in the 
multilateral fora of the WTO. 
 
Comment 
------- 
 
¶13. (SBU) AUSTR Wilson's positive and constructive tone was 
warmly received by all of his Saudi interlocutors, who 
responded with concrete examples of progress made and candid 
requests for assistance.  Indeed, a few key Saudi IPR leaders 
have worked very hard to make significant progress on the IPR 
front in a very short period of time and are eager to be 
recognized.  A proverbial light at the end of the 301 tunnel 
would go a long way towards reinvigorating the select, and 
very essential, few leaders needed to continue to make 
progress on trade issues.  The Saudis are under significant 
pressure to reach the King's ambitious economic and 
development goals, and they are eager to partner with the USG 
and industry to do so. 
 
¶14. (U) AUSTR Chris Wilson cleared on this cable. 
SMITH