An operation by Brazil’s Federal Revenue Service (Receita Federal) in Foz do Iguaçu, Paraná state, on the border with Paraguay, resulted in the apprehension and destruction of half a million illegal CDs (pirated goods) and 250,000 packs of contraband cigarettes.
According to the head of the Receita Federal, Jorge Rachid, who participated in the operation, the market in contraband material is detrimental to the creation of jobs.
“Thousands of small businesses are forced to close their doors because of competition from illegal imports,” he said.
Rachid said the crackdown this year in what is known as the Triple Border region (where Brazil has a border with both Argentina and Paraguay) has resulted in an increase of 42% in illegal goods confiscated and destroyed (goods worth around US$ 13.4 million – 39.3 million reais).
Rachid explains that some 565 false stores (fronts for illegal goods) have been shut down and 204 buses that transported contraband items apprehended. It is estimated that the buses transport goods worth US$ 343 million (1 billion reais) annually.
“We have dealt the contraband business a hard blow. We are pulling the rug, their transportation system, out from under them,” says José Carlos de Araujo, a Foz do Iguaçu police officer.
At the beginning of the year there were 350 buses that made regular trips to Foz do Iguaçu. That number has now been reduced to around 120.
Brazi is the world’s fourth largest market for counterfeit merchandise, trailing only China, which is first, and Russia and Paraguay, second and third, respectively, in the ranking.
This illegal commerce causes Brazil annual losses of more than US$ 10 billion, according to the National Union of Federal Revenue Agents (Sindireceita).
For Júlio Lopes, Vice-President of the Congressional Investigatory Commission (CPI) that is looking into piracy in Brazil, to combat this type of crime it is not enough to pass tougher laws; it is also necessary to raise the consciousness of the population.
“It is very important for the National Congress to update the laws, but this won’t make any difference, if a national culture opposed to this practice does not exist,” the Deputy argued, addressing the 24th National Seminar on Intellectual Property, which was held in Brasília last month.
Besides the economic impact of piracy, the Deputy pointed out that the industry of counterfeit products hinders to creation of at least 1.5 million formal jobs.
The lawmaker presented those attending the event with the report prepared by the CPI on Piracy, fruit of more than a year’s work.
The Commission accused over 100 individuals and requested the indictment of 55 counterfeiters. As well as suggesting changes in the Intellectual Property and Penal Codes, the CPI proposed the creation of the National Council for the Defense of Intellectual Property.
Cigarettes on Top
According to the president of the Sindireceita, Reynaldo Puggi, the entry of US$ 10 billion worth of black market and counterfeit products each year sustains the illegal trade in Brazil.
Cigarettes top the list of illegal merchandise. Around 32% of the cigarettes sold in Brazil are contraband or counterfeit. The fiscal harm caused by illegal cigarette sales alone amounts to US$ 1.2 billion annually.
Puggi emphasized that, to reverse this situation, three factors must be combined: more rigorous legislation, organs equipped to combat piracy, and consciousness-raising in the population, to reduce the consumption of these items.
53 Brazilian and foreign specialists took part in the seminar, where they discussed questions related to the theme “Intellectual Property: Economic Growth with Social Responsibility.” The event was sponsored by the Brazilian Intellectual Property Association.
The governments and police forces of the 181 countries that are members of the Interpol should do more to integrate their efforts, making it possible to combat global piracy more effectively. This is the opinion of Interpol representative John Newton, one of the seminar’s participants.
He pointed out that this kind of activity is responsible for 5-7% of world trade and is frequently the source of funds for terrorism. “We must foster trustful relations among countries,” Newton argued.