Cablegate: Croatian Police Fighting Ipr Piracy but Outmatched

VZCZCXYZ0001
PP RUEHWEB

DE RUEHVB #0566 2121403
ZNR UUUUU ZZH
P 301403Z JUL 08
FM AMEMBASSY ZAGREB
TO SECSTATE WASHDC PRIORITY 8527

UNCLAS ZAGREB 000566

SENSITIVE
SIPDIS

DEPARTMENT FOR EEB/TPP/IPE JOELLEN URBAN

E.O. 12958: N/A
TAGS: ECON EINT KIPR HR
SUBJECT: CROATIAN POLICE FIGHTING IPR PIRACY BUT OUTMATCHED
BY THE PIRATES

1. (SBU) SUMMARY: The Croatian police actively pursue
intellectual property pirates and have achieved some
successes at raids and seizures, especially of smaller
operations. However, police officials cite technological
challenges and the global nature of the problem as major
obstacles to further success. In particular, they are
technologically outmatched by Amstel, Croatia's largest movie
pirate, according to industry estimates. The lack of
deterrent from Croatia's light punishment for convicted
pirates and the limited resources available to the relevant
section of the police department also hinder the fight
against piracy.

2. (SBU) On July 16, econ officer and econ assistant met with
Ivan Mijatovic, head of the Financial Crime Department,
General Police Directorate, Croatian Ministry of Interior,
and Mirjana Vukovic, an inspector with the department, to
discuss their actions against intellectual property piracy.
Mijatovic and Vukovic told us the department is actively
pursuing piracy operations and has had several successes at
raids and seizures. They said, however, that the department
is technologically outmatched by the best pirates. They also
repeatedly stressed that intellectual property piracy is a
global problem, well beyond the department's power to solve.
Mijatovic, however, noted one problem specific to the
Croatian justice system: while the earnings from some piracy
operations are great, the punishment for convicted offenders
is so small as to be little more than symbolic. He said fines
are negligible amounts and imprisonment is very rare, and
then of short duration, thus offering little deterrent for
new or repeating offenders.

3. (SBU) We asked particularly about the work of Amstel,
which, according to Croatian Association for the Protection
of Audiovisual Works estimates, is the largest movie pirate
in Croatia sourcing from the internet and largest distributor
in Croatia, earning at least $100,000 per year. Vukovic told
us they know Amstel has been operating for years and is very
large and well organized, though she could not give us a
volume or monetary estimate of their operations. She said
they believe Amstel operates out of several apartments to
distribute DVDs and music CDs and has invested a lot in the
operation. She said "Amstel" is their online nickname. The
department continues to actively pursue Amstel. Vukovic said
she knows they have gotten "very close," but they have never
been able to establish solid enough proof for arrests. She
said she has seen press articles joking that the department
has made Amstel a monopoly, because in its pursuit of Amstel,
it has discovered and closed down the other smaller
operations.

4. (SBU) Describing some of the challenges the department
faces in pursuing intellectual property criminals, Vukovic
referred to Amstel as a perfect example of a pirate
organization. She said they are well organized and agile;
they frequently change their internet provider (IP) and
physical addresses. Further, they use untraceable,
non-Croatian IP addresses. Vukovic and Mijatovic both said
Amstel uses U.S.-based IPs and that this has hindered the
department's investigations because they cannot access
information from the IPs. They said the department simply
cannot catch up or keep up with Amstel technologically.
Vukovic said that, unfortunately, what may end up putting
Amstel out of business is other advances in piracy that are
making it easier and easier for average users to access
pirated works for themselves directly from the internet.

5. (SBU) COMMENT: Although piracy certainly is a global and
technologically challenging problem, challenges internal to
the Croatian police department also limit the success at
cracking down on intellectual property crimes. In previous
discussions, we have learned that the section of the
department working on intellectual property crimes has only 4
or 5 staff members. Further, the section also covers other
cybercrimes such as child pornography, which often take
higher priority. Thus, although the section staff appears
dedicated and has invested serious effort and achieved some
successes against intellectual property crime, they may have
reached the limit of what they can accomplish without a
significant increase in resources and expertise.
Bradtke

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