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MPAA Testifies in Congress on Piracy-Organized Crime Link

27 Mar, 2003 By: Jessica Wolf

The Motion Picture Association of America (MPAA) has called for the United States and other governments to attack intellectual property piracy groups through the organized crime syndicates that fund, create and help operate them.

MPAA president Jack Valenti testified March 13 in front of the U.S. House of Representatives Judiciary subcommittee on courts, the Internet and intellectual property. He called attention to the fact that many of the most prolific and lucrative piracy operations around the world have strong ties to organized crime. Governments need to start treating copyright theft with the same severity they treat other forms of organized crime, he said.

“It is simply not possible for a private-sector organization to penetrate this kind of organized criminal endeavor without the help of governments,” he said. “Governments need to dedicate the same kinds of legal tools to fighting piracy that they bring to other kinds of organized crime: money laundering statutes, surveillance techniques and organized crime laws.”

Valenti said the European Commission, Interpol and national enforcement authorities around the globe accept that “piracy and organized crime go hand in hand.”

Although Internet and digital piracy is a growing threat that has changed the face of copyright holders' long battle, the widespread piracy of optical discs -- CDs, VCDs and DVDs -- is the front line, Valenti said.

“The piracy of DVDs and other optical media products is dominated by organized crime and increasingly threatens our international markets, which account for 40 percent of revenue earned by the filmed entertainment industry,” he said.

Valenti cited specific examples of disc pirates from such areas as Australia, Bangkok, Hong Kong, Malaysia and Russia in which the Motion Picture Association (MPA) has found pirates that have state-of-the-art security systems, access to highly sophisticated surveillance equipment to alert them to enforcement raids, and intricate smuggling operations that employ high-tech equipment such as global positioning systems.

Russia recently has emerged as a major area for large-scale production of DVDs in numbers that can only mean they are meant for export, Valenti said.

“Today there are at least 26 optical plants in Russia, including at least five that specialize in the production of DVDs,” he said. “The number and overall capacity of these plants has more than doubled in the past two years. Nine of these plants are located on property owned by the Russian government.” These plants replicate about 300 million DVDs and CDs a year. Demand in the country is only about 18 million units. The market is so saturated that pirates sell illegal DVDs on Russian streets by the kilo, which points to export operations running from the country.

Valenti cited reports of violence and intimidation tied to video piracy, further illustrating that intellectual property theft has strong organized crime backing.

At least two officials in Malaysia received personal death threats last year if a crackdown on illegal VCD traders didn't stop, Valenti said. One, a city official, also received a threat that his daughter would be raped if the crackdowns continued.

In the United Kingdom, there is evidence that Chinese crime gangs are behind much of London and Southeast England's DVD black market. Chinese human traffickers force illegal immigrants into selling pirated DVDs to pay off debts their families owe to the gangs, Valenti told the congressional committee.

Also this month, 21 organizations -- mostly U.S.-based, including film and television studios, recording companies, as well as the MPAA, the Interactive Digital Software Association and the National Association of Theater Owners -- teamed to form the Entertainment Industry Coalition for Free Trade (EIC). The EIC's goal is to educate policymakers around the world about the importance of free trade, its positive international economic impact and how international trade negotiations can help create strong protection for intellectual property.

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