Gref Does His Bit for Anti-Piracy Crackdown

Economic Development and Trade Minister German Gref told an anti-piracy conference Tuesday that it would take time to crack down on the country's bootleg music market.

Gref cited an example of a recent afternoon walk he took down Tverskaya Ulitsa, which led to an impromptu sting operation against vendors hawking pirated music and films from stalls in the city center.

Gref said he finished work uncharacteristically early on a recent sunny afternoon, donned a pair of jeans and took a stroll down Tverskaya to a spot near the Kremlin.

When he arrived, he called the head of the city police on his cell phone.

"I asked him: 'Have you walked down Tverskaya recently? Because I just did and I counted six stalls selling counterfeits,'" Gref said.

"It is apparently impossible to achieve quick results. If someone said that in the course of two to three years we could solve this problem, I would be doubtful," Gref told the conference.

He added that the counterfeiters often enjoyed impunity with local authorities.

"It is closely linked to the effectiveness of the authorities in general, the way the authorities function ... the structures that produce counterfeit goods get their protection from the heads of local authorities," Gref said.

In a tough address to the conference, John Kennedy, president of the International Federation of the Phonographic Industry, said that Russia must crack down on its enormous bootleg music market.

The head of the global music industry trade body called on Russian authorities to quash the illicit industry, which is second in the world only to China's.

Kennedy said Russian pirates pump illegal CDs to markets in 27 countries and have the capacity to churn out 700 million discs a year -- eight times the number of legal discs sold in Russia last year.

Two-thirds of the music CDs in Russia are counterfeit, Kennedy said.

Despite a minor improvement in 2005, bootleg music worth $400 million was sold in the country last year, according to the IFPI, and intellectual property rights violations are cited as a key impediment to Russia joining the World Trade Organization.

"For all of Russia's intentions of joining the WTO, it appears to an outsider that enforcement of intellectual property rights is a low priority," Kennedy told the conference, which was hosted by U.S. Ambassador William Burns.

The number of Russian web sites offering music downloads for a few cents or for free was a sign that the country's authorities were not ready to meet the challenges of the music industry's newest marketplace, Kennedy said.

"Unfortunately Russia's unhealthy tradition of music piracy lives on in the digital era," he said, citing the example of the web site, which offers tracks for one-tenth of the price of world music downloading leader iTunes.

Several lawsuits have been brought against the web site, but it continues operating. Its owners argue that they pay royalties and are violating no laws.