US embassy cable - 04AMMAN6508

UNCLAS SECTION 01 OF 02 AMMAN 006508 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR NEA/LEA - S. WILLIAMS 
STATE ALSO FOR EB/TPP/MTA/IPC - B. SOILA 
PASS TO USTR - E. SAUMS 
 
E.O. 12958: N/A 
TAGS: KIPR, ECON, ETRD, EAID, KTIA, PHUM, JO 
SUBJECT: JORDAN IPR - TWO STEPS FORWARD, A HALF STEP BACK 
 
REF: A. AMMAN 6435 
     B. AMMAN 2790 
     C. AMMAN 2574 
 
SENSITIVE BUT UNCLASSIFIED.  FOR USG USE ONLY. 
 
1.  This is an action request. See para 9. 
 
2.  (SBU)  SUMMARY:  Jordan's parliament began debate on the 
temporary copyright law and FTA-compliant amendments to it in 
mid-July.  Although MPs did not conclude deliberations before 
adjourning, the chief government proponent of the amended 
copyright law states that the package will pass with only 
minor revisions.  A cabinet decision in late April to 
dramatically boost censorship fees came as a surprise to 
distributors of copyright-protected, imported audiovisual 
works, who see the resulting increased "price gap" between 
legal licensed audiovisual items and pirated works as 
promoting copyright piracy.  The Prime Minister was 
approached by local and international industry 
representatives in mid-July to reverse the decision, which 
may not comply with WTO or FTA obligations.  The Minister of 
Trade is now also actively involved in seeking a remedy, but 
the fix may take weeks.  We do not believe the demise of the 
censorship commission is in the offing, though this would put 
a quick end to the need to raise revenues.  The good news 
from Jordan is that intellectual property rights (IPR) 
setbacks are now more likely to be these types of inadvertent 
secondary problems;  the government may not always get it 
right the first time, but it has shown its commitment to the 
fundamentals of IPR protections.  END SUMMARY. 
 
Copyright Law:  FTA-Compliant Amendments Likely to Pass 
--------------------------------------------- ---------- 
 
3.  (SBU)  Jordan's parliament took up the temporary 
copyright law on July 13, when it was presented to the Legal 
Committee of the Lower House, along with amendments intended 
to bring it more closely into compliance with its WIPO and 
FTA commitments.  The amendments track closely with proposals 
the USG had made late last year (Ref C).  (NOTE:  The 
Government had met its goal to approve the FTA-compliant 
copyright amendments as part of a USAID-sponsored "Conditions 
Precedent" exercise tied to an AID cash transfer.  END NOTE.) 
 National Library Director Mahmoud Talhouni said that the 
text and amendments had passed smoothly through committee 
with the exception of Article 36 which specified the grounds 
upon which his National Library enforcement unit could 
conduct a search for IPR violations.  The current law notes 
that the library can do so on "suspicion" of a violation.  In 
committee and then in the open parliamentary debate on July 
18, a few vocal opponents argued that the library should only 
act on a "strong suspicion."  He said that the government did 
not object to the change, so long as the government could 
still determine what constituted a "strong suspicion."  Seven 
of the proposed amendments to the law have passed in 
parliament in separate votes, said Talhouni, but parliament's 
summer session was adjourned (Ref A) before it could finish 
its work on copyright.  He said that he expected the 
remainder of the amendments to pass when parliament resumed 
work. 
 
4.  (SBU)  The argument on "strong suspicion" is not trivial 
as it relates to constitutional provisions regarding searches 
and seizures.  As it stands, the copyright law allows the 
National Library enforcement unit to enter any premises in 
the country -- not just shops -- and critics (and even some 
well wishers) wish to check that sweeping power in some 
rational manner. 
 
Censorship Fees Favor the Pirates Over Legal IPR Works 
--------------------------------------------- --------- 
 
5.  (SBU)  Murad Bushnaq (protect), licensed Warner Brothers 
distributor and head of the Jordan Intellectual Property 
Association (JIPA), has been leading the charge on the issue 
of censorship fees.  Based on an April 26 cabinet change to 
regulations regarding the independent Audiovisual Media 
Commission (AMC), the AMC is authorized to charge a per unit 
fee for every imported audiovisual work entering the country 
(including film reels, videotapes, DVDs, video CDs, software, 
PC games, audio CDs, audio tapes, and floppy discs).  While a 
"per title" fee remains as before (now USD 4.20 per title), 
there is a steep 15 percent additional fee per unit for 
visual items, and 10 percent for audio items.  If a 
distributor were to import 500 DVDs, for example, the USD 
4.20 per title fee grows to USD 445.20.  The AMC is imposing 
this censorship fee for what it calls its "approval and 
control" service. (COMMENT:  On a strictly fee-for-service 
basis, one could argue the GOJ should stick to the cost of 
one review of any given title.  END COMMENT.)  This fee 
structure does not apply to locally produced audiovisual 
materials.  (NOTE:  Possibly a violation of national 
treatment obligations under the WTO and/or FTA. END NOTE.) 
However, local movie theaters and production companies must 
pay a separate fee equal to three percent of their registered 
capital initially and one percent annually thereafter.  At 
least one owner of a major production company is threatening 
to move to Dubai. 
 
6.  (SBU)  As Bushnaq sees it, the new fees increase the 
price that consumers will have to pay for AV products, thus 
increasing the price gap between pirated works and 
legitimately sold items and pushing more people to buy from 
the copyright pirates who still set up shop in parts of 
downtown Amman.  When asked about the new censorship fees, 
National Library Director Mahmoud Talhouni (protect) voiced 
agreement with the notion that this only increases piracy and 
adds a burdensome workload for his IPR enforcement unit.  The 
strictly numbers-oriented critics of the new plan, say that 
the government should support the censorship authority via 
fines on those who sell unapproved items.  More politically 
astute observers say that, provided censorship is not a major 
goal of the current government and given that there was a 
workable, per-title fee system before, reverting to the old 
fee structure would be the best way forward for now. 
 
7.  (SBU)  COMMENT:  The AMC and its censorship board are 
unlikely to be closed anytime soon, though this would resolve 
the need for revenues.  Therefore, we need to look at the 
alternatives.  In its zeal to run a tight ship and to tap 
revenue in the short term to pay for its services, the 
government is reducing its revenue streams in the long run. 
Over the long term, this misplaced effort to collect revenue 
will close down legitimate operators (or drive them to move 
distributorships in neighboring countries) and reward the 
pirates and censor-busters who don't pay taxes or fees 
anyway.  END COMMENT. 
 
8.  (SBU)  Bushnaq told us that an industry group on August 1 
called on Deputy Prime Minister and Minister of Industry and 
Trade Mohammad Halaiqa, who indicated that he was opposed to 
the fee-collection scheme.  Bushnaq predicted that, in the 
end, the new fees would be dropped, but only after another 
cabinet decision and publication of new regulations in the 
government gazette, which could take weeks if not a month or 
two.  In the meantime, he believed it was best to keep the 
pressure on to get the fee decision reversed. 
 
9.  (SBU)  ACTION REQUEST:  Embassy plans to discuss the 
censorship fees issue with senior GOJ officials, raising our 
objections.  Any additional guidance from the Department 
would be welcome. 
HALE