VZCZCXRO0366
RR RUEHCHI RUEHDT RUEHNH
DE RUEHHM #0047/01 0411041
ZNY CCCCC ZZH
R 101041Z FEB 10
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC 6305
INFO RUEHHI/AMEMBASSY HANOI 4188
RUEHHM/AMCONSUL HO CHI MINH CITY 6548
RUCNASE/ASEAN MEMBER COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 HO CHI MINH CITY 000047 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS AND EEB/TPP/IPE JURBAN 
STATE FOR EEB/TPP/IPE 
STATE ALSO PASS USTR DBISBEE AND RBAE 
 
E.O. 12958: DECL:  2/10/2010 
TAGS: ECON KIPR EAID ETRD VM
SUBJECT: HCMC ECONOMIC POLICE STRIKE AGAIN, MAKING GRAB FOR FAKE 
VIAGRA 
 
REF: REFTEL: A) HCMC 039 
 
HO CHI MIN 00000047  001.2 OF 002 
 
 
CLASSIFIED BY: Ken Fairfax, Consul General, Ho Chi Minh City, 
Department of State. 
REASON: 1.4 (b) 
¶1. (C) Summary: Economic police in HCMC conducted another 
head-line grabbing IPR bust on January 25, this time breaking up 
a large counterfeit pharmaceutical ring.  The ring ran under the 
guise of a legally-registered local pharmaceutical firm that 
purchased domestically-produced pills then re-packaged them 
under top-selling foreign brands for distribution to dozens of 
pharmacies throughout the city.  City government sources say 
that the serious nature of the threat to consumers makes it 
almost certain that the 14 people arrested will be prosecuted 
criminally.  Notably, Pfizer's Director of Global Security raved 
about the professionalism of Vietnam's police enforcers, 
particularly when compared with its neighbors like Thailand. 
End Summary. 
 
 
 
Fake Pharmaceuticals Under the Cover of Legitimate Company 
 
--------------------------------------------- ------------- 
 
¶2. (SBU) On January 25, 50 members of the HCMC economic police 
conducted simultaneous raids around the city, bringing down a 
major counterfeit pharmaceutical ring and arresting dozens of 
suspects.  Harry Waskiewicz, Director of Global Security for 
Pfizer Corporation, told EconOff that police raided six 
production facilities, six storage facilities, and one packaging 
center.  Media reports noted that the leader, Huynh Ngoc Quang, 
who is director of joint-stock company 'Viet-Phap' (literally 
Vietnamese-French) Pharmaceuticals, a legally-registered 
corporation, managed to escape the initial raid but was arrested 
a few days later and has since been held in solitary 
confinement.  Quang faces criminal charges for producing and 
selling fake medicine. 
 
 
 
¶3. (SBU) Mr. Quang reportedly bought medicine made in Vietnam 
and used Viet-Phap Corporation facilities, as well as other 
outlets around the city, to produce strips and boxes that looked 
like imported pharmaceuticals.  One of Mr. Quang's employees 
told reporters that he worked daily from 9a.m. to 4 p.m. putting 
around 10,000-30,000 fake tablets into 1,000 strips a day.  Once 
in their new packaging, pills were distributed to legitimate 
pharmacies throughout the city.  During the bust, police 
reportedly seized more than 50 boxes of fake foreign medicine as 
well as the equipment for production and counterfeit cases.  Mr. 
Waskiewicz noted that counterfeit Viagra was among the key 
foreign brands being packaged, along with Eli Lilly's Cialis, 
Novartis-branded products, and many others. 
 
 
 
Pfizer Showers Kudos on Vietnam's Economic Police 
 
--------------------------------------------- --- 
 
¶4. (SBU) Mr. Waskiewicz, who has worked on IPR violation cases 
in South East Asia for the last seven years, said that he has 
been "extremely impressed" by the professionalism and the 
initiative of the investigative police in Vietnam.  He noted 
that his security team has had a series of cooperative efforts 
with police on counterfeit pharmaceutical cases involving Pfizer 
over the years, though this bust was by far the largest.  He 
said police launched the investigation entirely on their own 
beginning in October, employing elaborate surveillance and 
wiretapping measures.  Armed with intelligence that Pfizer 
products were among the infringed goods, they notified the 
Pfizer consultant in Vietnam about the investigation and the 
next steps. 
 
 
 
¶5. (C) Mr. Waskiewicz emphasized the sharp contrast between the 
recent HCMC case and similar counterfeit pharmaceutical cases in 
Thailand, in which his team would have to acquire as much 
incriminating evidence as possible and hand over all their 
intelligence to authorities "on a silver platter." At best, Thai 
police would then seize the goods, but would not go a step 
beyond to investigate possible links to other rings, scour 
copies of sales records or prosecute the perpetrators.  In 
contrast, he said, Vietnamese police tend to act totally of 
their own accord. Waskiewicz said he didn't know what motivates 
them, but stressed that Vietnam's investigative police have 
"never once asked for a dime" from Pfizer for their cooperation. 
 In contrast, police in Thailand, he said "won't lift a finger 
 
HO CHI MIN 00000047  002.2 OF 002 
 
 
unless there's a direct financial incentive involved."  He 
surmised that Vietnam's police's motivation might to some degree 
come from a sense of duty, noting that a high level police 
official he'd dealt with on another case had once received FBI 
training and told Waskiewicz he felt obligated to "return the 
favor." 
 
 
 
Don't Mess with the Public's Health 
 
----------------------------------- 
 
¶6. (SBU) The quality of investigations and the willingness of 
police to act, in Mr. Waskiewicz' experience, has been equally 
true when Pfizer has dealt with Hanoi's police force in 
counterfeit cases along the northern Chinese border.  In fact, 
he said he was taken aback when the former deputy director of 
the economic police in Hanoi once said passionately that 
pharmaceutical infringers deserved the "death penalty" for their 
crimes. 
 
 
 
¶7. (SBU) While the death penalty is unlikely in this case, Mr. 
Waskiewicz said it wasn't even a question that the ring leaders 
would be prosecuted criminally.  HCMC police told him that all 
of the suspects were being held in solitary confinement and 
would likely remain there until their trial, possibly more than 
a year out due to the complexities of the case.  Authorities 
also told him that the ringleaders were expected to receive a 
seven to ten year sentence, while the accomplices would likely 
get three to seven years. 
 
 
 
Comment 
 
------- 
 
¶8. (SBU) Three aspects of this story jump out: the praise that 
Mr. Waskiewicz showered on Vietnam's investigative police force, 
his mention that police don't need "incentives" to take action, 
and the quote that FBI training motivated police to better 
enforce Vietnam's IPR law.  Still, GVN authorities are only 
beginning to understand the importance of protecting IPR on its 
own merits.  IPR violations are not pursued with the same vigor 
as crimes that endanger public health or involve politically 
sensitive materials.  Thus, rights holders that have their goods 
counterfeited or copied without associated consumer safety or 
political concerns aren't likely to see deterring penalties, 
i.e. criminal prosecution, applied to their cases.  However, if 
counterfeit products are dangerous to consumers, IP rights 
holders like Pfizer can ride the coattails of harsher 
punishment.  Whatever the motivating factor for increased police 
action on counterfeit goods, the latest crackdowns are an 
encouraging step in the right direction.  End Comment. 
FAIRFAX