Piracy is an organized crime activity

By ETCO
02/06/2005


Edited by the Government Communication and Strategic Management Secretariat of the Presidency of the Republic.

Nº 16 - Brasília, May 27, 2005.

















Luiz Paulo Barreto
Luiz Paulo Barreto
Executive Secretary of the Ministry of Justice and President of the National Council to Combat Piracy and Intellectual Property Offenses


“There was a change of focus in the government's vision. The problem of piracy is no longer seen as a social phenomenon, but is seen as an organized crime activity ”

“The main target of the actions, however, are not street vendors. The street vendor is the weakest point of this problem. The target is the mafias that work with the production and distribution of pirated products. ”

“Many pirated products expose the consumer's health to risk, as is the case with counterfeit medicines, glasses, sneakers, condoms, auto parts and even surgical scalpels. We will warn that the cheap is expensive ”.

“When repression operations strangle distribution points, there is a decrease in the availability of pirated products and a consequent increase in price. On the other hand, we are discussing with the industry the launch of cheaper products, accessible to the population ”

“It is important to say that piracy does not create jobs, it promotes the loss of jobs. Some segments report the loss of 10 direct jobs for each street vendor who sells pirated products. In addition, there is a loss of taxes in all sectors affected. Data from the National Union of Tax Auditors (Unafisco) reveal that Brazil fails to collect R $ 27,8 billion a year because of piracy. Money that could enter the Brazilian economy, being used in social programs, for example ”


Since it was established in November last year, the National Council for Combating Piracy and Intellectual Property Offenses has totally changed the way of facing the problem that affects several countries in the world. It was up to the council to develop a National Plan to Combat Piracy that encompasses 99 actions in three areas: repressive, educational and economic. Since last year, the operations of the Federal Police and the Federal Highway and the Federal Revenue Service have doubled and, in only one of them, two million watches were seized in São Paulo. In an interview with Em Questão, the executive secretary of the Ministry of Justice and chairman of the board, Luiz Paulo Barreto, shows how essential it is for Brazil that the government has stopped seeing piracy as a social phenomenon. Luiz Paulo also explains how piracy prevents the creation of new formal jobs and prevents the country from collecting R $ 27,8 billion per year, the equivalent of more than four times the amount of resources foreseen for the Bolsa program. Family in 2005.


In Question - Why was there a decision to create a Council to Combat Piracy?
Luiz Paulo - In 2001, an inter-ministerial committee to combat piracy was created. This committee had a function more focused on the education base and within a concept that Brazil has adopted in the last 20 years of considering piracy to be a social phenomenon. It was noticed that due to this social view of the thing, the Brazilian government left smuggling a little aside. And this practice grew in the country, to the point that it became interesting for organized crime due to its high profitability. After the piracy CPI we were able to prove in Brazil that piracy is in the hands of international mafias that operate throughout the country, mainly in the triple border region and in Brazilian ports. Piracy-fighting operations have proven that these mafias also operate with offenses of greater offensive potential, such as drug, arms and ammunition trafficking. In this context, the federal government created the National Council for Combating Piracy and Intellectual Property Offenses - CNCP, which was installed in November 2004. It is a unique council in the world because it is the first to unite government and society. to tackle the problem. There are six seats for private initiative, today represented by the software, audiovisual, music, industrial, legal and reprographic sectors. With the participation of all, the Council developed the National Plan to Combat Piracy, composed of 99 actions, divided into three segments: actions of an educational, repressive and economic nature. There was a change of focus in the government's view. The problem of piracy has gone from being seen as a social phenomenon to being seen as an organized crime activity.


EQ - There was a great increase in repressive activities. How did the federal government start to act and what are the results achieved with this work?
LP - With operations synchronized between the Federal Police, the Federal Revenue Service, and the Highway Police. For example, Foz do Iguaçu, the Cataratas operation, which brought down the number of sacoleiro trips to Paraguay by 25% in 2004. There were US $ 33,5 million in seizures and a 38,6% reduction in “pseudo” buses of tourism to Foz do Iguaçu, vehicles that didn't even have banks, taken to give more space for the transport of goods. There were seizures of 386 buses last year and about 1000 used by organized crime transport logistics. This year, in the first quarter alone, 110 buses were seized. There are other operations at other border points and we are starting to work harder with the ports. This year, for example, just to name a few numbers, 128 glasses and 8 pairs of sneakers were seized in the Port of Santos, more than 126 fake bags, flasks and backpacks in Vitória / ES and 50 watches, 10 bags , 50 thousand dvds and 850 thousand blank CDs in Suape / PE. We are also detecting deposits for the distribution of pirated products. Recently, in São Paulo, two million watches and R $ 100 million in goods were seized in just one deposit. The place belonged to Law King Chong, arrested since June 2004, on charges of smuggling, embezzlement and piracy. There is a systematic work to combat piracy and organized crime. Data from the cigarette industry show that smuggling of this product has dropped by 20% since these actions were initiated. The main target of the actions, however, are not street vendors. The street vendor is the weakest point of this problem. The target is the mafias that work with the production and distribution of pirated products. Therefore, operations such as Cataratas, which practically interrupted access to these products via Foz do Iguaçu since last year, are being carried out. In the first three months of 2005 alone, the number of seizures is double the same period last year. As a result, there are sectors of the industry that already feel a recovery in sales.


EQ - How to convince the consumer not to buy pirated products given the price appeal compared to the original products?
LP - First showing that many pirated products expose consumers' health to risk, as is the case with counterfeit medicines, glasses, sneakers, condoms, auto parts and even surgical scalpels. Let's warn that the cheap is expensive. Many of these products, for example, sneakers, are bad because they have no impact absorption, pirate glasses do not have the protection of ultraviolet rays, auto parts are made entirely outside the standards recommended by manufacturers and with poor quality materials, without rigor no technician. As for pirated CDs and DVDs, we are going to show the consumer that, by buying them, they are feeding the same mafia that puts drugs and weapons in Brazil. Buying a pirated CD helps fuel a chain of violence in the country. The consumer needs to evaluate the fact of buying such a product just because it is cheaper. To carry out advertising campaigns with this focus, the government proposed to the private sector the creation of a fund, to be managed by themselves, for investments in education campaigns. Regardless, several are already being broadcast by the media. And the government will invest in lectures, seminars and workshops for public agents, police, prosecutors and judges, in order to exchange experiences in the fight against piracy. We also need to work with young people in order to educate the consumer of the future. It is worth remembering that when purchasing a pirated product, the achievements obtained with the Consumer Code will not be guaranteed, as regards the guarantee of consumer satisfaction. Education is one of our biggest challenges, but we are showing a clear shift in focus.


EQ - Another aspect of the council's work is the population's access to formal products. How can a portion of Brazilian consumers with lower purchasing power be able to purchase original goods?
LP - With repressive operations, we started to cause damage to organized crime, especially if the target is the network of production and distribution of pirated products. From there, they begin to make the product more expensive. It is already possible to verify that DVDs that were sold at R $ 6,50, are already being sold at R $ 10, R $ 11, R $ 12. When repression operations strangle distribution points, there is a decrease in the availability of pirated products. and the consequent price increase. On the other hand, we are discussing with the industry the launch of cheaper products, accessible to the population. There are DVDs that are already being released at cheaper prices and are bestsellers. There are industries selling software at half the price to students and teachers. There are original CDs being sold for R $ 7 in stores or even cheaper. The publishing market is working with paperbacks to lower the cost. All of this will allow a reduction in the price differential between original and fake products, one of the main ways to combat piracy.


EQ - The federal government is surrounding the front door of pirated products. What about the fairs and shops around the country that sell these goods?
LP - We are including the fight against piracy among the actions provided for in the Unified Public Security System (SUSP) so that this type of crime can be combated in an integrated manner also in the States and Municipalities. The work carried out by the federal government has had a very positive impact on states and municipalities. Local governments are creating specialized police stations to combat piracy and crimes against intellectual property, and are waking up to the problem. Here in the Federal District there was a recent apprehension made by the fraud department of more than 200 thousand CDs and DVDs. We are also conducting seminars throughout Brazil and proposing the creation of specialized prosecutors in justice in the fight against piracy. There is an action by the Council that refers to the dialogue with the state governments so that the sale of pirated products is not allowed in fairs installed in ceded public spaces.


EQ - The view that combating piracy takes jobs is still very strong. How can this labor that sells the pirated product be absorbed within such a competitive labor market?
LP - When you buy a pirated product, you are not doing a benefit to anyone, not even the street vendor. When you buy a bag for R $ 100, for example, the maximum that the street vendor will earn is three, four reais per merchandise sold. Everything else ends up in the hands of the mafia. Imagine how many jobs would be created if this scholarship was bought on the formal market? Workers would have to manufacture, distribute and sell them, all with the purchase of inputs, generating jobs, income and taxes. The street vendor is a seller and, with the crackdown on piracy, this seller will return to selling legal products, such as handicrafts and typical products left out even at traditional fairs, which are infested with pirate products and of poor quality. In addition, the government plans to establish agreements for the training of labor, which will facilitate the return of this worker to formality. It is important to say that piracy does not create jobs, it promotes the loss of jobs. Some segments report the loss of 10 direct jobs for each street vendor who sells pirated products. In addition, there is a loss of taxes in all sectors affected. Data from the National Union of Tax Auditors (Unafisco) reveal that Brazil fails to collect R $ 27,8 billion a year because of piracy. Money that could enter the Brazilian economy, being used in social programs, for example. And there are still losses that are impossible to quantify, as is the case with companies that stopped opening doors in Brazil because of piracy.


EQ - What are the main intentions of the government with this work?
LP - Dismantle the mafias that operate in the business, attacking the networks of production and distribution of pirated products in Brazil and, at the same time, combat the problem in local commerce with the action of States and Municipalities. We also intend to reduce informality and contribute to the growth of the Brazilian economy, which is already experiencing a moment of warming. It never hurts to remember that piracy is a crime. Piracy is not just a problem for the government or industry, but for the whole of society. Buying original products moves the economy, creates jobs and national wealth. This is the way.