Brazil Starts to Crack Down on Counterfeit Goods


Published in the New York Times, August 16, 2004

SÃO PAULO, Brazil, Aug. 16 - When Brazilian police arrested the suspected leader of one of the country's biggest rings involved in smuggling counterfeit goods on June 1, officials here hailed the move as proof that Brazil was finally cracking down on copyright piracy after years of looking the other way.

Law Kin Chong, a naturalized Brazilian originally from China, was arrested in an elaborate sting operation after he was videotaped offering a $ 1.5 million bribe to the head of a congressional committee investigating counterfeiting. Mr. Law, the owner of three shopping centers in downtown São Paulo where consumers can buy counterfeit or smuggled goods as diverse as CD's and DVD's, Rolex watches and brand-name clothing, had become one of the most notorious symbols of Brazil's thriving black market in pirated goods.

Brazil stands to lose billions of dollars in trade benefits from the United States if it does not prove by the end of September that it is making progress in combating copyright piracy.

Since 2001, Brazil has been on the United States trade representative's priority watch list of countries that fail to protect intellectual property rights. Hoping to prod the Brazilian authorities into action, the Bush administration at the end of June gave the country 90 days to improve copyright enforcement or lose all or some of the trade benefits it gets under a program known as the generalized system of preferences.

The program, which began in 1976, is intended to promote economic growth in eligible developing countries by allowing them to export certain products to the United States duty-free. In 2003, the United States imported more than $ 21 billion in goods from 140 countries and territories under the program.

Brazil alone accounted for $ 2.5 billion of that amount, shipping goods as varied as automobile parts and wooden doors to the United States free of tariffs. Over all, Brazilian exports to the United States last year totaled $ 16.7 billion.

To remain eligible for the trade benefits, countries must meet such criteria as protecting worker rights and intellectual property.