Israel Must Face Piracy Problem

TEL AVIV-Israeli Justice Ministry officials are keeping tight-lipped about the outcome of an Aug. 13 meeting between Justice Minister Yossi Beilin and U.S. Attorney General Janet Reno concerning Israel's poor record on prosecution of copyright violators of American recording artists (BillboardBulletin, Aug. 13).
Israel was protesting against its inclusion on a list of 16 countries added to the U.S. trade representative's Priority Watch List of nations violating copyright law. Countries included on the list face the possibility of trade sanctions.
A measure of how important Reno considered the emergency meeting can be gauged from the fact that she invited along Secretary of State Madeleine Albright and 12 legal advisers, far outnumbering Beilin's two embassy staff advisers. At the close of the meeting Beilin would say only that he had reviewed with Reno steps Israel would be taking to counter piracy. Reno gave no hint as to her reaction to the steps outlined by Beilin.
Last winter, the U.S. government placed Israel on the Special 301 Priority Watch List of the 16 worst manufacturers of counterfeit CDs and tapes, joining Brazil, Russia, China, and other nations known for their national piracy problems. The Americans announced that Israel would face $170 million in trade sanctions this November unless piracy is finally curbed.
Observers suggest that the meeting may have been prompted by the recent change of government in Israel and the new administration's enthusiasm to deal with issues inherited from the Netanyahu regime.
Jay Berman, chairman/CEO of the International Federation of the Phonographic Industry (IFPI), says Israel was on his organization's list of countries that caused the most concern with regard to pirated product. Berman believes Israel "most certainly belongs on the Special 301 list."
"The situation is beginning to improve marginally," he says. Last year Israel assembled a special unit to address the specific issues involved with investigating piracy and counterfeiting, but, says Berman, "it has not been fully funded."
As to why Beilin should have met Reno rather than gone through other government channels, Berman says, "In terms of the justice minister's brief, the attorney general is the logical counterpart."
Neil Turkewitz, international senior VP of the Recording Industry Assn. of America, says that Israel should have to show enforcement progress before being removed from the Priority Watch List. "While we are somewhat encouraged by recent developments, the question is really, What is government going to do in funding and overall resources to implement an anti-piracy strategy? We wouldn't contemplate any change in the status of Israel just on their commitment," he says.
In order to be removed from the Priority Watch List, Beilin would have to convince Reno that Israel is serious about cracking down on pirates and that the government has devised a plan of action. Beilin was able to present the text of a new intellectual property act that has passed its first reading in the Israeli parliament, the Knesset. The act will now be debated in the Knesset; it requires two more readings to become law.
Says Berman, "In terms of the subject matter that we believe was raised, the matter of enforcement, and the process of promoting the new copyright law, they're subjects we're quite happy with being discussed and ones which we've raised with the European Commission and the U.S. government."
The facts on the ground, however, will be tough to change. Yohanon Banon is head of the anti-piracy division of the Israeli national group of the IFPI. He claims that his organization has identified the sources of illegal CDs in Israel, yet "no one knows where these CDs go."
The cost to the Israeli police of surveillance and of raiding the hundreds of retail outlets selling the counterfeit products is well beyond its means. Successful closures are barely a pinprick in the thriving underground market. The local music industry is obliged to hire private security firms to track the pirates and prepare cases against them.
In the past year, 60 such cases have been tried in court. The harshest sentence meted out, however, was suspended, with the vast majority ending in easily payable fines.
The International Union for the Protection of Cinemagraphic Creativity has a branch in Israel which is a leading pursuer of the pirates. But branch attorney Gour-Arieh Armarnik observes that even if the Israeli market were effectively policed, piracy would continue to thrive. "There's nothing legally we can do to stop them," admits Armarnik. "Sometimes we catch one of their trucks on our roads and disrupt shipments. But we have no authority over manufacture."
Russian-born pirates have created a lucrative industry in Israel and continue to bulk-ship their counterfeits to Russia. The expanding piracy situation in the quasi-autonomous Palestinian Authority region, which would quickly fill the vacuum generated by any damage inflicted on their Israeli counterparts, is also a major concern.
The U.S. has been pressuring the Palestinians, and they do fear sanctions. However, to date only one pirate plant has been shut down. Armarnik claims the Palestinians show no real desire to shut down one of their few successful industries.

Assistance in preparing this story was provided by Dominic Pride in London and Bill Holland in Washington, D.C.