VZCZCXRO8779
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHWR #2149/01 2980749
ZNR UUUUU ZZH
P 250749Z OCT 07
FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC PRIORITY 5393
INFO RUCNMEM/EU MEMBER STATES
RUEHKW/AMCONSUL KRAKOW 1885
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
UNCLAS SECTION 01 OF 02 WARSAW 002149
SIPDIS
SENSITIVE
SIPDIS
STATE PASS TO USTR WMOORE
USDOC FOR 4232/ITA/MAC/EUR/JBURGESS, JKIMBALL, MROGERS
TREASURY FOR MGAERTNER
E.O. 12958: N/A
TAGS: ETRD ECON KIPR EINV PL
SUBJECT: WARSAW STADIUM CLOSES (SORT OF)
REF: WARSAW 1918
WARSAW 00002149 001.2 OF 002
1. (U) Summary: On October 1, government authorities closed
the "crown" of the Warsaw Stadium, where most trade in
pirated goods had taken place. The periphery of the Stadium
is still open to traders. Counterfeit goods can still be
found, although the quantity seems to be less, and the goods
are less brazenly displayed. The Polish government is still
struggling to find a new location for the market.
Ironically, its efforts may be frustrated by the
recently-enacted anti-business "Big Box Store" law. Closing
the Stadium's crown represents incremental but real progress
toward greater respect for intellectual property rights in
Poland. End summary.
------------------------
Stadium's "Crown" Closes
------------------------
2. (U) On October 1, traders in the "Russian Market" at the
Warsaw Stadium were expelled from the top or "crown" of the
Stadium. The crown was the center of trade in pirated and
counterfeit goods, partly because the distance from the
Stadium entry to the crown allowed sufficient time for
lookouts to warn traders of police raids. On October 5,
EconOff observed that access to the crown is now blocked by
barricades, which are guarded by police.
--------------------------------------------- -------
Trade in Pirated Goods Continues, But Less Obviously
--------------------------------------------- -------
3. (U) Traders continue to occupy stalls on the periphery
of the Stadium. On October 5, most of the permanent stalls
seemed to be occupied by Poles or Vietnamese selling cheap
but genuine goods. Trade in counterfeit goods continues, but
is far less apparent than in the past (reftel). For example,
several times Russians approached EconOff offering films and
music, as well as cell phones (presumably stolen) and
watches. However, there were no DVDs openly displayed. One
trader offered EconOff cigarettes. When asked what type he
had, the trader opened his car trunk and -- while casually
shoving cartons inside his coat -- revealed four large
plastic sacks full of cartons of different brands.
4. (U) Some of the African traders, who previously
controlled much of the crown's trade in counterfeit athletic
shoes and sportswear, have relocated to a spot behind the
Stadium parking lot. Only legitimate goods were on display,
the sole exception noted being a single "Nike" shirt.
However, when EconOff asked one trader standing in front of a
pile of nondescript no-name coats whether anything was
available "with a name on it," he was immediately surrounded
by a dozen traders. One pulled a "Puma" shoe out of his coat
pocket, while another unzipped his jacket to reveal he was
wearing at least three "Puma" sweatshirts, sales tags
attached. Others frantically began pulling counterfeit
sportswear from hiding placing in duffel bags. The traders'
opening offer for Puma shoes was PLN 65 (about USD 24), while
sweatshirts went for PLN 40 (about USD 15). Prices were, of
course, negotiable.
5. (SBU) Counterfeit goods could be found, with some
looking, but that fact needs to be kept in perspective. The
new locations are not well-known. EconOff was only able to
find the knock-off shoe and sweatshirt traders by following a
trader packing a bulging duffel bag, and that trader was only
spotted after over an hour spent looking. The number of
traders appeared greatly diminished, and the volume of goods
available seemed to be a fraction of what it had been. In
contrast, the presence of police was much more noticeable.
Closing the crown dealt a real and substantial blow to trade
in pirated goods.
--------------------------------------------- ----------
Big Box Store Law May Block Efforts To Relocate Traders
--------------------------------------------- ----------
6. (SBU) The Polish government is still trying to settle on
a new location for the market. All of post's IPR contacts --
the police, concerned ministries, and industry
representatives -- have stressed the importance of the new
market having specific points of entry and exit so that the
police can prevent counterfeit goods being brought into the
market space. One of the most frequently-mentioned possible
WARSAW 00002149 002.2 OF 002
locations, in the eastern suburbs of Warsaw, is currently an
empty field. Time would be required to construct market
stalls there (although the Ministry of Sport has stated that
the traders should be able to remain on the periphery of the
Stadium until design work on a new stadium is completed in
mid-2008). The other most frequently-mentioned possible
location, in the northern suburbs of Warsaw, currently
contains shabby old warehouses. However, over 20,000
residents there have signed a petition opposing having the
market in their backyards. The local mayor, as well as
members of the local council (rada gmina), have stated they
will not give their approval for siting the market there.
Such approval would be needed under Poland's new "Big Box
Store" law.
7. (SBU) The brainchild of a Self-Defense (Samoobrona)
representative who owns a chain of small convenience stores,
the Big Box Store Law (formally, the Law on Creation of Large
Retail Units) was enacted on May 21. It requires a positive
opinion from the local council (rada gmina) and a special
permit from the local mayor to create retail units with a
sales area greater than 400 square meters. For retail units
in excess of 2,000 square meters of retail space, a positive
opinion from the regional council (sejmik wojewodztwa) is
also required. Requiring these permits increases
opportunities for corruption. Post worked extensively with
business groups to limit the law's negative impact by
exempting existing investments from the law. Nevertheless,
the law poses a cumbersome and potentially insurmountable
barrier to market access for supermarkets, shopping mall
developers and "big box" retailers. Poland's Ombudsman has
challenged the law in the Polish Constitutional Court, but
the Court has not yet ruled on the matter.
--------------------------------------------- --
Comment: Closing Crown Represents Real Progress
--------------------------------------------- --
8. (U) The Russian market is not closed completely, and,
with a little looking, counterfeit goods can still be found.
However, the worst part of the market now stands behind
barricades, empty. Trade in counterfeit goods is much less
apparent than just a few weeks ago, and the number of traders
appears to be waning. The government still faces some
hurdles to closing the Stadium completely, but things are
finally moving in the right direction.
ASHE