U.s. Music Biz Urging Stronger Action Against Israeli Piracy

Spurred by concerns about CD piracy in Israel, the U.S. recording industry is urging the U.S. trade representative (USTR) to begin a top-level trade investigation into the nation that could lead to trade sanctions.
Upgrading a lower-level filing lodged with the USTR last year (Billboard, May 15, 1999), the Recording Industry Assn. of America (RIAA), in cooperation with the U.S.-based International Intellectual Property Assn. (IIPA), announced Feb. 18 that it wants the USTR to cite Israel on its top-level "Priority Foreign Country" list of infringing nations, which is expected to be released April 30. The citation would be made in accordance with Special 301, a copyright enforcement provision of U.S. trade law.
If Israel does not address piracy and initiate enforcement changes within 30 days, the U.S. could begin negotiations that could end with trade sanctions.
Israeli record-industry and music-union officials are also calling for action, saying the problem of piracy has become epidemic and, in addition to U.S. losses, is threatening the existence of the domestic recording industry.
Shmiel Sarig, head of operations for ACUM, the Israeli union of music composers and publishers, says, "Whenever a newspaper publicizes the release of a new CD likely to be a hit, it's pirated the next day. It takes 24 hours from release to counterfeit. Every successful recording is a candidate."
However, the Israeli government, citing recent changes in enforcement, is asking the U.S. to withhold the top-priority designation. Arik Kaplich, the inter-ministerial administrator for intellectual property rights at the Israeli Trade and Industry Ministry, says the request is based on steps taken by the government in the past year, including the establishment of a special police force, new legislation to comply with World Trade Organization (WTO) regulations, and a Justice Ministry request for funding for six dedicated attorneys.
Last year, Neil Turkewitz, RIAA executive VP, international, said that Israeli government officials had basically told U.S. industries that if they had a problem, they should "go stand in line" (Billboard, May 15, 1999).
This year, Turkewitz says that "Israel's current record on enforcement is dismal and incompatible with the requisites imposed by the WTO's [Trade Related Intellectual Property Rights] Agreement" and asks the USTR to "act accordingly" if Israel in the next few months does not "take the necessary actions to reverse the present downward spiral."
Says Micky Tunis, managing director of Hed Artzi, Israel's largest record company, "I'm sorry to say that only strict sanctions by the European Economic Community and United States trade representative against Israel can solve Israel's CD piracy problem. I say this sadly and only after three years' familiarity with all sides of the problem."
Warns Tunis, "Under the umbrella of the International Federation of the Phonographic Industry [IFPI], Israel's three largest music companies, Hed Artzi, Helicon, and NMC, spent $4 million combating piracy. But in 2000 we will not put any more money in. The criminals do not face severe enough sanctions. So the situation will worsen."
Yohanon Banon, anti-piracy coordinator of the Israeli branch of IFPI, says that the government does not take the issue seriously. "The problem has increased dramatically since 1998. Sixty-five percent of all CDs and 80% of audiocassettes here are pirated. Forty percent of that is Israeli repertoire. The loss to the Israeli music industry is $24 million and $36 million to the international industry."
He adds, "In 1999 we had a big budget and hired lawyers, investigators, and police. We made 260 police complaints, but almost nothing was done. Why? Ask the police. Around Haifa police headquarters there are 14 illegal CD points of sale. The police even buy from them."
Another USTR Priority Foreign Country citation for Israel has special political ramifications because Israel has long been an important ally of the U.S. In addition, Israel is a significant market and repertoire source.
According to Turkewitz, Israel both imports and exports pirate CDs and is home to a manufacturing base "that goes far beyond requirements for legitimate product," resulting in a sales decline of approximately 50%, as well as reductions in investment in the production of new recordings.
The RIAA and IIPA also asked the USTR to give Priority Foreign Country status again to Ukraine, which in the past two years has become Europe's top pirate country.