Copyright pirates linked to criminal gangs face minimum penalties of up to four years in jail and fines of €300,000 ($366,000) under new proposals unveiled today (July 12) by the European Commi

Copyright pirates linked to criminal gangs face minimum penalties of up to four years in jail and fines of €300,000 ($366,000) under new proposals unveiled today (July 12) by the European Commission in Brussels.

The Commission -- the European Union's executive authority -- said the trade in pirate and counterfeit DVDs, CDs, software and other goods was dominated by criminal organizations, which were able to produce and ship items on an industrial scale.

The proposals aim to align national criminal law and improve pan-European co-operation on counterfeiting and piracy activities. Commission vice president in charge of justice, freedom and security Franco Frattini said the new effort "forms a basic platform underpinning our joint efforts to eradicate these phenomena which are undermining the economy."

Frattini said these activities which are often more lucrative than other types of trafficking still carry light penalties. "Counterfeiters and pirates jeopardize legitimate businesses and threaten innovation," he said.

The four-year minimum jail term is considerably harsher than that on the statute books in most EU member countries.

The proposals aim to treat all deliberate infringements of intellectual property rights on a commercial scale as a criminal offence. The proposals must be backed by all 25 EU member countries before they are adopted.

The proposals are two separate instruments: A draft EU directive defining counterfeiting (which also needs to be approved by the European Parliament); and a draft decision specifying the level of penal sanctions to be applied.

The draft directive establishes the principle that member states must classify counterfeiting as a criminal offence when it is intended to make a profit. Attempting, aiding, abetting and inciting counterfeiting would also be criminalized.

EU governments would have to be legally empowered to destroy the goods, to close the business, to ban it from operating, to place it under judicial control and to prevent it from receiving public subsidies. Governments would have 18 months to transpose the directive into national law.

In February, the Commission estimated the trade in counterfeit goods in the EU to be worth around €400 billion ($488 billion) each year. CDs, DVDs and cassettes represent about a third of all items seized by EU authorities.

The two new directives will complement the Enforcement Directive on intellectual property, which was formally adopted in April last year to provide EU governments more power to pursue pirates.

Measures include seizing suspicious bank accounts, forcing offenders to pay damages to victims of piracy and withdrawing fake goods from the market at the offenders' expense. The Enforcement Directive is set to be fully implemented by May 2006.

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