http://www.ft.com/hippocampus/q12dc86.htm
Israel Faces US Sanctions Over Software
By Judy Dempsey in Jerusalem (02/18/1999)
London Financial Times
Israel risks sanctions under US trade law unless it enforces
legislation to combat pirated music, software and compact
discs, US diplomats said yesterday.
The warning followed repeated US requests to the Israeli
government to tighten legislation.
"We have not seen as much progress as we like to," said
Edward Walker, US ambassador to Israel. "Israel's fundamental
interest must be protecting intellectual property rights."
Sanctions would undermine Israel's export growth, increasingly
driven by the high-tech and software sectors. Software exports
grew 15 per cent last year, reaching almost $600m, while
high-tech exports exceeded $2.5bn.
The piracy of software, particularly CDs, has also spread to
areas controlled by the Palestinian Authority, US officials said.
Israelis and Palestinians involved in the counterfeiting business
recently set up two manufacturing units in the West Bank cities
of Hebron and Nablus to produce pirated CDs. Once manufactured,
the software is transported to Israel where it is distributed.
US companies have repeatedly complained about Israel's failure to
protect intellectual property rights. The International Intellectual
Property Alliance - which lobbies on behalf of industry for
copyright protection - this week asked Charlene Barshefsky, the
US trade representative, to name Israel a "priority foreign
country" under US trade law - a provision which would give Israel
six months to take action or face sanctions.
US companies claim to have lost more than $170m in revenues during
1997 because of Israel's export-driven pirate audio CD market.
US officials warned that other companies would not invest in Israel
or provide venture capital unless legislation was tightened.
According to the Business Software Alliance (BSA), the US-based
industry lobby, nearly 70 per cent of all software installed on
computers in Israeli businesses in 1996 was illegal.
Israeli trade ministry officials said they were taking measures to
push through new legislation. They pointed out that the maximum
prison sentence for piracy was already three years and the maximum
fine Shk1bn ($247m).
But Deborah Schwartz, economic affairs counsellor at the US embassy
in Tel Aviv, said that of the 225 criminal cases of piracy brought
before the courts last year "not one single sentence was made and
there has been no movement on the legislative front. What is taking
place in Israel is plain burglary".
Israeli recording artists are also demanding tougher action.
