Israel Faces Sanctions If CD Piracy Continues US, Israeli Officials Met Yesterday to Discuss Tougher Enforcement Steps

Article excerpt

It's just past 5:30 p.m, and shoppers are coursing through Tel Aviv's largest open-air market. Windows 98? Got it. Ricky Martin's latest compact disc? No problem.

The shekels are changing hands at a brisk pace - until Yaakov Manor arrives. His presence is a reminder that much of the profit being turned here is against international law.

Mr. Manor is waving a court-issued seizure order, but an agitated salesman at the Maxim music stall refuses even to look at it. It's not the first time - more like the six or seventh - that investigators have confiscated hundreds of his compact discs, illegally produced in counterfeiting outlets in Israel and the Palestinian Authority.

"Take it and go," the salesman scowls, as Manor briskly piles stacks of CDs into a cardboard box. The quicker the raid, the less painful for business. Five off-duty policemen and detectives stand guard as Manor works. Illegal copies are not a high priority for Israeli police. So, Manor and the cops are hired by Israel's branch of the International Federation of the Phonographic Industry (IFPI), a record business coalition.

United States trade authorities are leaning on Israel to clean up this kind of piracy. The US placed Israel on a "priority list" of 16 countries with poor levels of enforcement of copyright laws. The US provides $3 billion in aid annually to Israel, and piracy hits US companies hardest.

If it shows no progress in getting up to the World Trade Organization's standards, when US officials return for a special inspection in December, Israel could face trade sanctions of more than $170 million - an estimate of just the software losses last year.

Israel's new government is taking the threat seriously. Justice Minister Yossi Beilin was in Washington yesterday to meet with Attorney General Janet Reno in Washington. He was expected to show her, among other things, a draft of a Israel's proposed law with stiffer measures to protect intellectual property.

While this Tel Aviv market sells everything from imitation Cartier watches to fake Nike sneakers, Washington is most concerned about illegal high-tech products. Each day, about 4,200 pirated CDs are sold in the Carmel Market here and in nearly 50 other open-air shopping districts in Israel. Some 2.4 million pirated cassettes and CDs are produced here per year, for a total loss to record companies, artists, and tax authorities of $30 million last year, according to the IFPI.

The group says that existing laws, when enforced, carry hand-slap penalties. The raids are aimed at collecting damages in civil courts only.

"On the criminal side, no action is made," says Yohanon Banon, IFPI's manager of enforcement activities. …