By Josette Goulart From São Paulo, Valor Econômico - 16/02/2005

The Brazilian government is under new pressure from the United States to implement its plans to combat piracy in the country. The threats of economic sanctions remain strong and one of the world's leading intellectual property organizations, the International Intellectual Property Alliance (IIPA), sent its report last week to the US Department of Commerce (USTR) for the United States to keep Brazil in the black list, called “Special 301”, which is made up of countries that do little to combat piracy and are subject to retaliation.

The sanction that threatens Brazil is the withdrawal of the country from the General System of Preference (SGP), which grants for some products a reduction in import tariffs. Currently, 13% of products exported to the United States are part of the SGP, equivalent to US $ 2,5 billion.

According to the IIPA report, the American threat to withdraw Brazil from the SGP comes from last year when an ultimatum was issued. Brazil did not have many concrete elements to present in September, the deadline given by the Americans. Only the draft of the National Council to Combat Piracy - under the baton of the Ministry of Justice - but which had its first meeting only in January this year. The Americans have given 180 days more chance, which expires on March 31, for the country to present results and an effective plan.

The Ministry of Justice guarantees that it will have these results to present. The executive secretary of the National Council for Combating Piracy, Márcio Costa de Menezes e Gonçalves, says that the meeting that will outline the National Combat Plan is scheduled for February 27th and 28th. “It is difficult to draw up such a plan in two days, but we will have at least a well-drawn sketch”, says Gonçalves. He says that data from Operation Cataract carried out by the federal police on the border with Paraguay will also be presented, and that it increased by 92% the number of seizures of smuggled goods in December 2004 compared to the same period in 2003.

Lawyer Antonella Carminatti, from Castro, Barros, Sobral, Gomes, says that Brazil made great strides in 2004, not only by calling on the private sectors to participate in the new Council, but also because the Justice has improved by granting indemnities for moral damage in trademark infringement proceedings.

But the IIPA report is not so optimistic. On the contrary, it says that the Brazilian government totally ignored the series of proposals contained in the report of the Piracy CPI. "The results of the Brazilian government's anti-piracy system are few," says the report. Estimates are that the industry's losses from piracy in Brazil were $ 931,9 million in 2004 alone.

The USTR Special 301 report will not be released until April, but several industrial organizations in that country also send their “Special 301” (reference to an article in American trade law) to collaborate with data, information and perceptions about different countries. "Countries are framed according to the damage that piracy has caused to American industries," says lawyer José Henrique Werner, from Danneman Siemens. The largest and most representative organizations in the American industry are IIPA, which brings together the phono and film industries, and also the International AntiCounterfeiting Coalition (IACC), which represents manufacturers of luxury goods, cigarettes and software. The IACC did not include Brazil in its annual report due to a lack of data on combat policies.