Brand Name' No Guarantee in Russia

Dozens of outdoor pirate markets in Moscow, a ropy of Microsoft's Windows XP costs just   & 3.   containing everything the  Beatles ever recorded, or the latest Madonna album, costs  $2. 50.   The new Harry Potter film? About  

"This is big business. No one is going to stop it anytime soon," says Igor, a software vendor who declined to give his last name. "It's not piracy'. These products are made in legitimate1 factories. I guarantee the quality of every disk 1 sell. The police keep order here and never bother us.

At least half the products sold in Russia Hems as basic as furniture, cosmetics, and coffee are either counterfeit' or contraband" • experts say.

But that may be about to change. Armed with a lough new trademark law. effective on Jan. 1. 2003. Russian authorities say they are going to crack down hard on the estimated $ 20 billion a year theft of intellectual properly' by Russian bootleggers" and black marketeers'1. In a recent interview, Prime Minister Mikhail Kasyanov warned that the problem is Omega Seamaster Replica a key obstacle to Russia's hopes of joining the World Trade Organization. "How can we ask foreign investors to put their money into a country where phony1" goods are sold across every shop counter?" Mr. Kasyanov asked. The scale of Russia's black market, be said, even threatens to o-verwhelm11 the Kremlin's agenda for broader economic reforms.

Experts say Russia is already the world's second-biggest, source of pirated goods, after China. But while China has made major progress in guaranteeing investor rigliis.  Russian economie practice    remains    largely    lawless.     And    despite    the    Russian government's declaration of war. analysts say bootleg nianufactur ing is growing by leaps ami bounds.

One reason for the wave of piracy is Russia has been slow to enact1" intellectual-property laws. Until iwo weeks ago. it was It-gal to print copies of any product abel or package. Duma'" deputy and chairman of Russia's Consumer Union Pyotr Shelishch estimates that pirates account for up to fiO percent of all business done by Russian printing firms. "A lot of big Russian businesses participate in making fake'1 goods, and they feel perfectly safe in doing so." Mr. Shelishch says. " There1 are huge profits to be gained, and there is not enough understanding of bow bad this is for Russia's long-term economic health and image1. "

Law-enforcement officials complain ihal they are underfund¬ed1' and ill-equipped"' to take on tin' pirates, who often have high-level friends and protection Iron crime syndicates1'. "Our inspectors in the field1" face constant threats to life and limb." says X'ade-zhda Naizina. director of Gostorginspeklsia1". the government's brand-protection agency. "It's a thankless and almost 'impossible job. "

The huge industrial base'" Russia inherited from the former Soviet Union  including millions of scientists, engineers, and technicians has fallen into poverty and disuse over the pasi decade. "So many of our enterprises found themselves facing hard times, Audemar Piguet Replica and discovered they could set up little operations for off-thc-books" production that would be very profitable," says Yevgeny Myasin. an expert with Russia s Ministry of Trade and Economic Development.

Some Russians regard pirate business as a lifeline. Anton Zladkis, head of a detective agency that investigates the prove-nance''2 of goods, says he was recently hired by a well-known Ital-ian furniture1 maker to trace counterfeits flooding the Russian market. Mr. Slakes found the factory in a small central Russian town. "Everyone was involved, including the mayor and police chief. It was the1 only source of employment in the area, and wages were good," he says. "They told rnc: 'Don't try to stop this. You'll ruin us'