1

Introduction 2

Organised Crime 2-3

Characteristics of Organised Crime 2

Organised Crime and Music Piracy 3

Links to Terrorist Groups 3

The Music Industry andLaw Enforcement: A Challenge 3

The Nature and Extent of Music Piracy 3-4

A Strategy 4

Interpol 4

World Customs Organisation 4

Conclusion 4-5

Precis of recent examples indicating organised crime involvement inmusic piracy 6

Africa 6Europe (West) 6-8Europe (East) 8Latin America 9-10Middle East/S.W. Asia 10North America 10Russia/CIS 10-11South East Asia 11-12IFPI Secretariat

54 Regent Street

London W1B 5RE

Tel: +44 (0)20 7878 7900

Fax: +44 (0)20 7878 7990

www.ifpi.org

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ORGANISED CRIMEOrganised crime is not impeded bynational borders, diverse legalsystems and languages. It has beendefined by many law enforcementbodies, including Interpol and the UKNational Criminal Intelligence Service,as;

“Constituting any enterprise, orgroup of persons, engaged incontinuing illegal activities whichhas as its primary purpose thegeneration of profits, irrespectiveof national boundaries”.

The characteristics typical oforganised crime groups, and theiractivities, are listed on the right andmay be present in any group, oractivity, to a greater or lesser degree.The presence, or absence, of thesecharacteristics will allow a qualitativeanalysis to be conducted as to theexistence of an organised crime groupand/or organised crime activities, inintellectual property crime.

An appreciation and commonunderstanding of organised crime willenhance cooperation between the

INTRODUCTION

The growth of international organised crime has been facilitated bynumerous factors, including the burgeoning global economy and theestablishment of worldwide financial markets. The free movement ofgoods, services and people, essential to legitimate commerce, hasalso enabled international crime gangs to flourish.

The international nature of organised crime poses problems for bothcommerce and investigators alike. The music industry, like otherindustries in the intellectual property sector, is targeted by criminalswho use the profits from piracy to fund diverse illicit activities.

Evidence is available, and case studies in this leaflet demonstrate,the connections between music piracy and other crimes, such aspeople trafficking, money laundering, violence, drug smuggling andterrorism.

CHARACTERISTICS OF ORGANISED CRIMEGROUPS AND THEIR ACTIVITIES

● Collaboration by a minimum of three people.

● Criminal activity which has, or is intended to be,

continued over prolonged period.

● Commission of serious criminal offences,

or offences which, taken as a whole, are of considerable

importance.

● Motivated by the pursuit of profit or power.

● Operations are international, national, or regional.

● Uses violence or intimidation.

● Uses commercial or other business like structures.

● Engages in money laundering.

● Exerts influence upon politics, the media,

public administration, judicial authorities or the economy.

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music industry, governments and lawenforcement. This will promote theeffective use of limited resourcesagainst organised crime groupswhich, if unchecked, have thepotential to undermine state andcommercial institutions.

ORGANISED CRIMEAND MUSIC PIRACYThe manufacture and distribution ofillegal music carriers is, in manyinstances: an “enterprise… engagedin continuing illegal activities,which has as its primary purposethe generation of profits.” Violence,intimidation, and corruption are oftenencountered, and in a number ofcountries international and domesticintellectual property right legislationis repeatedly and flagrantly breached. There is absolutely no doubt that inmany situations the theft ofintellectual property constitutes anorganised and serious crime. Thenature and context of the activity mustbe examined.

It should come as no surprise togovernments and law enforcementagencies that the prospect of hugeprofits for a small capital outlay andvery small potential penalties, in apoorly regulated environment, isattractive to the criminal and isexploited in an organised anddetermined fashion. This lack of riskis a major incentive for criminal gangswhose only motive is profit. Themanufacture and traffic of illegalmusic products, both domesticallyand internationally, is therefore oftenan organised crime activity.

Groups engaging in such activitiesmay be established hierarchicalcriminal organisations, such as theMafia, or they may be less formalisedand only associate for the duration ofa particular enterprise. The evidenceof organised crime involvement isincontrovertible. Confirmed links tointernational drug trafficking, illegalfirearms, money laundering, massivetax and revenue evasion and morerecently the funding of terroristactivities have been established. In

some developing areas wholeeconomies are being distortedinternally, leading to loss of revenueand the failure of legitimate domesticenterprise to flourish.

LINKS TOTERRORIST GROUPSThe most extreme form of organisedcrime affecting society today is that ofterrorism. The clandestine nature ofterrorist organisations requires largesums of money to maintain operativesin the field and for the purchase ofarms and explosives. Evidence andintelligence is available to prove thatthese groups are involved in thefabrication, distribution and sale ofcounterfeit music and otherintellectual property infringingmaterial to raise funds for theiroperations.In the United Kingdom and the IrishRepublic, the investigation ofparamilitary groups, on both sides ofthe sectarian divide, by lawenforcement agencies has provided agreat deal of intelligence about theoperations of those groups. There isno doubt that a significant proportionof their funding stems from the sale ofcounterfeit product.Intelligence gained from IFPIinvestigations has also uncoveredconnections between organised crimegangs involved in music piracy inSouth America who are suspected tobe linked to Middle Eastern terroristorganisations. Examples of CDs andCDRs carrying propaganda messagesfrom extremist groups have beenfound in Argentina, Mauritius,Pakistan and Paraguay. It is certainthat these discs emanate from thesame source as much illegal music inthose regions.

THE MUSICINDUSTRY AND LAWENFORCEMENT:A CHALLENGEGovernments, judicial systems andlaw enforcement agencies seek to

define, identify and tackle organisedcrime as it has the potential to destroythe fabric of society. Serious andorganised crime groups must beaccorded a priority proportionate tothe growing threat, and increasedresources allocated to the fightagainst organized crime.Given the range of governmentalresponsibilities, and the limit to theirresources, it is inevitable that thesepublic guardians do not alwaysidentify and pro-actively tackleorganised crime activities.Consequently, it becomes theresponsibility of industries prone toorganised crime influence and activityto alert and educate the publicguardians. The music industry is acase in point.

THE NATURE ANDEXTENT OF MUSICPIRACYThe advent of the optical disc (CD,CDR, DVD et al) radically altered thenature of music piracy. There ismassive manufacture andinternational traffic of illegal opticaldiscs. Annual pirate sales approach twobillion units, worth an estimatedUS $4 - $5 billion, while globally, 2in 5 recordings are pirate copies. Totaloptical disc manufacturing capacity(all formats) - is approximately 30billion units.Manufacturing capacity massivelyexceeds legitimate demand. Thiscreates a business environment ripefor exploitation by criminalsyndicates. Production costs may beas little as US$0.25¢, whilst retailvalue normally exceeds US$2.50 andcan reach US$15.00. Given that thepirate producer has few or none of theoverheads associated with genuineproduction, the profit margin issubstantial.The whole area of intellectual propertycrime, which now includes the digitaland electronic environment, hasbecome much more significant in thecurrent fast moving commercial world.The challenge to law enforcement

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agencies to cope with serious andorganised criminal activity in thisenvironment encompasses all opticaldisc and new media relatedbusinesses and activities. Inpartnership with business, lawenforcement can achieve much inprotecting the public from what is aninsidious and growing threat - the theftand destruction of property andbusinesses through counterfeiting. The potential market for, and profitfrom, music piracy is enormous andgrowing, however, the criminalsanctions for breach of copyright andtrademark legislation bear littlerelation to the extent and nature of thecriminality involved and are ofminimal deterrent value. The hugeillegal profits made are inevitably usedto entrench the position of the pirates;to secure manufacturing anddistribution networks throughviolence, intimidation and corruptionand to subvert state institutions andprocesses. For this reason recourse tomore weighty criminal charges e.g.racketeering, conspiracy or fraudshould be considered; this approachhas been successfully employed in anumber of jurisdictions againstorganised crime.The challenge to all intellectualproperty industries is to inform therelevant law enforcement agencies ofthe criminal potential of piracy andcounterfeiting. In certain jurisdictionsmusic piracy is already an organisedcrime activity and the activity is notconfined to domestic markets, it isinternational. In those jurisdictions inwhich music piracy is not yet clearlyan organised crime activity, thepotential profits will surely attracthierarchical and entrepreneurialcriminal organisations.

A STRATEGYIFPI Enforcement unit has establisheda global structure to investigate musiccounterfeiting and to take actionagainst offenders. This investment bythe music industry has already paiddividends. Relations with other opticaldisc industry groups and withinternational law enforcementagencies have developed very

positively. However to optimisesuccess, law enforcement agenciesmust recognise the criminal potentialof international music piracy andincrease the resources dedicated tocombat it.The law enforcement response has tobe proportionate and cost-effective. Itcannot be so unless the problem isrecognised and fully appreciated. Thefunction of IFPI must be to increasethe awareness of law enforcementagencies and assist them in tacklingthe problem on a national andinternational basis.Governments and law enforcementagencies must confront theseissues:- (a) their responsibility to developstrategic intelligence onintellectual property crimes;(b) to assess whether suchcriminal activity constitutesorganised crime in their territory orcontributes to organised crimeactivity elsewhere in the world;and(c) to ensure that the resourcesdeployed to combat piracy areproportionate to the existing andpotential problem.The duty of industry is to providegovernments and law enforcementagencies with an overview of thecurrent and potential problem and toencourage them to confront theissues. There is an industryresponsibility to support enforcementthrough developing strategic andtactical intelligence and, whereappropriate, initiating civil actions.

INTERPOLOn 16 July 2003, the SecretaryGeneral of Interpol, Mr Ronald Noble,addressed the United States HouseCommittee on International Relationsabout the links between intellectualproperty crimes and terroristfinancing. He stated: “The link between organised crimegroups and counterfeit goods is wellestablished. But Interpol issounding the alarm that IntellectualProperty Crime is becoming the

preferred method of funding for anumber of terrorist groups. Thereare enough examples now of thefunding of terrorist groups in thisway (intellectual property crime) forus to worry about the threat topublic safety. We must takepreventative measures now.” (http://www.interpol.int/Public/ICPO/speeches/SG20030716.asp)

To combat this recognised threat,Interpol has created the InterpolIntellectual Property Crime ActionGroup (IIPCAG) - a coalition ofrepresentatives from police, customs,inter-governmental organisations andprivate sector associations - as aforum to coordinate and enhanceinternational action againstintellectual property crime.

WORLD CUSTOMSORGANISATIONThe World Customs Organisation(WCO), and member NationalCustoms Administrations are crucialallies in the fight against intellectualproperty crime, as the offences ofsmuggling and piracy are intimatelylinked. In recognition of theimportance of intellectual propertycrime, the WCO formed anIntellectual Property Rights StrategicGroup, with international business(www.wcoipr.org).

CONCLUSIONThe 2004 assessment of the UnitedKingdom, National CriminalIntelligence Service, in regard toserious and organised crime, states; “Intellectual property crime istaking place on a vast scaleglobally. Advances in technologyhave facilitated it’s growth, byenabling the speedy reproductionof high quality counterfeit goods,the best of which are difficult todifferentiate from the genuinearticles. The counterfeiting of CDs,DVDs and other digital media,much of it done in the Far East, iswell-publicised, but thecounterfeiting of all types of goods

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from designer clothes topharmaceuticals is also rife. Manyserious and organised criminals areinvolved, either in the manufactureof counterfeit products, or in theirdistribution, attracted by the highprofits and the low risk ofdetection, and no doubt consciousof the fact that the penalties forintellectual property crime offencesare rarely more than minimal.Meanwhile, there remains a publicperception of intellectual propertycrime as a victimless crime,despite the fact that certaincounterfeit products, such as car oraircraft parts, pharmaceuticals andalcohol, pose a direct risk to thepublic. Where serious andorganised criminals are involved, itis reasonable to assume that aproportion of the profits is used tofund other serious crimes”.The industry and law enforcementagencies have a common interest incombating music piracy, in particularthose areas that are controlled byorganised crime. It is essential tostrengthen the partnership betweenindustry and enforcement agencies atall levels. Effective partnership willdepend upon recognition of mutualprofessionalism and commitment.The international music industry isdetermined to protect itself from thedepredations of organised crime andto meet its wider social responsibilityof cooperating with the authorities toeliminate opportunities for organisedcrime to profit and flourish. We arecommitted to investing substantialresources to this end. We believe thatall responsible governments and lawenforcement agencies, bothinternational and national, will wishto cooperate in eliminating theorganised crime of piracy from ourindustry and our societies.

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AFRICA● August to December 2003 -

South AfricaSix containers carrying a total of1.5million pirate music CDs weresuspended from circulation by theSouth African authorities. The discs,which were manufactured in SouthEast Asia and were en route toNigeria, had been falsely described inmanifests.

● September 2001- South Africa

During a raid on an address inDurban, counterfeit CDs were seizedfrom a syndicate of Pakistaninationals. A search of the premisesalso revealed documentationindicating allegiance to Al Qaeda andOsama Bin Laden.

● November 2001 - Mauritius

Street hawkers selling counterfeitmusic products were also offeringvideo CDs containing footage of theWorld Trade Centre exploding and amessage from Bin Laden. Thesepropaganda discs were seized on theorders of the Police Commissioner inMauritius, who feared that they mightfoment public unrest.

EUROPE (WEST)● January 2004 -

England and WalesA series of raids were conducted inUK cities, resulting in the arrest ofnine individuals for organising thedistribution of massive quantities ofillegal material (music, films, softwareand paedophilia) on the internet. Thesyndicate downloaded material andburnt it onto CDRs for mail order andcar boot sales.

● January 2004 - Spain

Fourteen hackers were arrested by theGuardia Civil in several Spanish citiesfollowing an investigation centred onthe University of Vigo (North-WestSpain) computer system. Thesuspects had previously ‘hacked’ intothe computer system to takeadvantage of the enormous storagecapacity. They discovered a ‘deadspace’ in a computer destined for theinvestigation of the human genomeproject and used this space to hidealmost 500,000 music tracks in MP3format and thousands of film titles.They later used the high speed FTPsystem to transmit files to clients whopaid the gang prior to being allowedto download titles.

PRÉCIS OF RECENT EXAMPLES INDICATING'ORGANISED CRIME' INVOLVEMENTIN MUSIC PIRACY

Smuggled CDs inCustoms House,

Nairobi (right)and Scanned imageof 250,000 CDs in

a container(far right)

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● February 2004 - Italy

Twenty one individuals were arrestedby Fiscal police officers who searcheda number of locations which had beenidentified as part of a major piracynetwork run by a criminal gang locatednear Caserta. The investigationuncovered a wide illegal distributionnetwork, active in the Naples area.Members of the gang arrested includeindividuals involved at every level ofthe chain, from people involved in theimportation of blank CDR from SouthEast Asia to those who managed theduplication plants, to owners of recordstores selling pirate discs. Theoperation led to the seizure of 80 highspeed CD burners, 25,000 infringingdiscs, inlays, printers and blank CDRs.

● September 2003 - Greece

A series of coordinated raids wereconducted by the police in Athens,following a lengthy investigation byIFPI and national group investigatorsinto the duplication and distribution oflarge quantities of CDRs. Thesuspects, who were all from sub-Saharan Africa, were almost all illegalimmigrants controlled by others fromthe same region. The raids recoveredover 200,000 recorded discs and 123CDR burners.

● April 2003 - Belgium

Belgium Police raided two residentialaddresses and recovered 169 CDRand DVD-R burners together withsophisticated editing equipment andsilkscreen printers. Thousands ofrecorded and blank CD-Rs were

recovered. Also found was a loaded9mm pistol belonging to the mainsuspect who was wanted in Hollandfor counterfeiting offences. Thepotential recording capacity of thisequipment was estimated to be over80,000 discs a day.

● February 2003 - Italy

A Mafia boss, Luigi Giuliano,described in a trial the role oforganized crime in music and videopiracy. Giuliano stated that theCamorra (mafia) clans earn “100,000Euros each week dealing with drugs,extortion, video and music piracy”.He described in detail how organisedcrime manages all the illegaloperations in Naples, with differentgangs controlling the calls for tenders,the drugs sales, the illegal betting, and

the production of counterfeit CDs indifferent city areas. These “local”gangs keep part of the illegal incomeswhile other monies are deposited inthe Camorra bosses’ bank accounts.Giuliano confirmed that the Camorragang was directly involved in theproduction and distribution of pirateCDs, not just controlling the area usedby organised crime to run illegalactivities. Giuliano told the judges thatin the early 80’s, during a major warbetween the various gangs in whichdozens were killed, the “Cupola”, theillegal main board of the criminalalliance, agreed on the distribution ofthe illegal activities to various gangs.The “pax mafiosa” which followed theagreement allowed the criminalnetwork to increase the business inmany areas including the emergingpiracy business.

Street sellerin Madrid

Bootleg titlesmade fromstolen tapesof originalrecordings

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● January 2003 - Spain

A series of 13 raids by the NationalPolice in Madrid led to the arrest of40 persons involved in the massduplication of CDRs. The suspectsmany of whom were illegalimmigrants from China and who hadbeen brought to Spain by the othermembers of the gang were found inpossession of 346 high speedburners, 168,400 blank CDRs,24,450 recorded CDs, 39,000DVDs, 10,500 VCDs with films,515,000 jewel cases, 210,000inserts and 48,000 Euros in cash.The Chinese immigrant gang utilisedillegal immigrants to duplicate thediscs and a number of computershops and restaurants to launder themoney generated by the pirateproduct.

● January 2003 - UK/Netherlands

Investigation by IFPI Secretariat ledto the recovery of over 500 reel-to-reel tapes recorded by The Beatlesduring the making of the album ‘Let ItBe’. The tapes were stolen fromApple Records over 30 years ago andwere used by bootleg distributors toreplicate CDs. Three men weresimultaneously arrested in the UKand the Netherlands. Follow upinvestigations led to a pan-European

syndicate and the subsequent seizureof over 1,250 illegal master discs(stampers) in Austria.

● July 2002 - UK/Austria

IFPI Secretariat investigatorscoordinated a unique operationculminating in simultaneous raids inLondon and Vienna involvingofficers from Scotland Yard andAustrian Police. Searches ofresidential premises and storagefacilities resulted in the seizure of300,000 pirate CDs, by far thelargest seizure of infringing productin Austria. This case was alsounique, in that it was the first timethat Interpol had assisted in theinternational police coordination ofsuch an operation.

EUROPE (EAST)● May 2002 - Ukraine

IFPI Kiev investigators, withassistance from the Ukrainian TaxPolice, raided a private companyknown to associate with a well-knownpirate network in Odessa. Thelocation housed three hiddenworkshops where CDRs were beingduplicated 24 hours a day. This issignificant in demonstrating

movement away frompressed disc piracy in someparts of Eastern Europefollowing Enforcementpressure. 50,000 pirateCDRs were seized andnumerous links were foundwith other pirate operationsacross Ukraine.

● August 2002 - Ukraine

IFPI Kiev personnel and localpolice, following severalweeks of investigation andsurveillance, discovered anextensive pirate CDRproduction operation in aprivate apartment in Kiev. 66CDR burners were seizedalong with 5,000 pirateCDRs and 28,000 blankCDRs.

Part of a haul of 1,259 stampers, Austria

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● July 2002 - Mexico

An investigation led to a police raidthat was met with fierce resistancefrom five juveniles aged under 18.There were 5kg of cocaine in thepremises along with 25 CDR burnersand 16,000 pirate CDRs. Usingjuveniles to run CDR and drugtrafficking operations is a deliberateploy by organised crime to protectthose behind the syndicate.

● December 2002 - Mexico

Information gathered over anextensive period by IFPI Latin Americawas used by police in order to raid anorganised crime business supplyingblank CDRs for pirate use. Theprincipal figure involved was arrestedand 12.5 million blank CDRs wereseized.

● February 2002 - Mexico

An investigation by IFPI LatinAmerica identified 73 commercialpremises suspected of pirate musicactivities. These were all raided withpolice assistance resulting in thediscovery of 15 CDR burningoperations and over 50 pirateproduct warehouses. 220 CDRburners were seized along with832,000 pirate CDRs and1,500,000 inlays.

● October 2001 - Mexico

Police raided eleven houses, three ofwhich were linked by interconnecting Inlay cards from pirate compilations, Paraguay

Mass smugglingof blank CDRsinto Paraguay

LATIN AMERICA● October 2003 - Paraguay

Allegations of corruption involvingthe illicit importation of over onemillion CDRs led to the resignationof the Minister of the Interior and theheads of both the Police andCustoms. The circumstances leadingto these resignations were that alorry and trailer, later found to carrythe CDRs were seized by Police inPuerto Villeta and taken to a policepound. The same day a suspectalready under investigation for theimportation of contraband CDRscontacted the head of Paraguaycustoms complaining about theseizure. The customs chiefcontacted the minister who in turndismissed the head of the Policedepartment responsible for theseizure. A prosecutor then orderedthe release of the lorry and contentsto the above mentioned suspectwithout further investigation.Following a press campaign, theAttorney General of Paraguayordered an investigation and it waslater confirmed that the CDRs wereindeed contraband. Such were theramifications of these allegationsthat the President of Paraguayissued a decree amending thetreatment of the importation ofblank CDRs and stated at a pressconference that the resignations ofthe Minister and the heads of bothPolice and Customs had beenaccepted.

passages and tunnels, disguised byfalse walls. Inside they discovered amassive counterfeiting operation. Intotal five persons were arrestedduring searches, which yielded 235CDR burners, over one million blankCDRs, 512,000 pirated CDRs andover 1,000,000 inlay cards. Thisillegal plant had the potentialcapacity to produce over 14 millionCDRs annually. It is believed, thatthis crime syndicate have investedthe profits from piracy into otheractivities, such as narcotics andprostitution.Four of the persons arrested werefound to be in possession of loaded9mm pistols. During the searches acar was deliberately crashed into aPolice barricade and the driverarrested. This man, an associate ofthe others, had been sent to theaddress to create a diversion to allowthe others to escape. He was found tobe in possession of an AK47 assaultrifle and has been indicted forattempted murder.

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● February 2002 - Paraguay

The enormous scale of CDRduplication continues to bedemonstrated by the scale of theseizures of blank discs. Confidentialinformation provided to IFPI LatinAmerica resulted in the seizure of 13million blank CDRs at a containerstation in Paraguay. The CDRs weredestined for the pirate markets inBrazil and Argentina.

● November 2001 - Paraguay

Several CDRs, containing pirate musiccompilations, recovered byinvestigators in Paraguay containedinlay cards depicting graphic imagesof the exploding twin towers of theWorld Trade Centre, New York, andportraits of Osama Bin Laden. Thereis a large population of middle -eastern origin in Ciudad del Este, acity notorious in Paraguay forproducing pirate products of alldescriptions.

MIDDLE EAST &SOUTH WEST ASIA● August 2003 - Egypt

Police from Giza seized nearly twomillion counterfeit Arabic title musiccassettes in the largest seizure everseen in the region. In addition to thecassettes, one million inlays, sixcassette duplicators and two printingmachines were seized.

● February 2002 - Israel

IFPI investigators in Israel recovered11 counterfeit CDs from retail outlets,which were examined at theSecretariat’s Forensic facility togetherwith exemplar discs from a new CDplant. The 11 CDs were confirmed tohave been produced at the plant. Theplant was raided and closed witheight arrests and the seizure of 126master discs (stampers) and 3,500pirate CDs.

● November 2002 - India

Delhi Police raided an optical discplant and seized more than 11,000MP3 CDs and VCDs. Also seized were

large quantities of pornographic filmsand 22 master discs (stampers).Given that each stamper can produceat least 60,000 copies the potentialproduction of this site was enormous.

NORTH AMERICA● June 2003- Canada

Toronto Police recovered more thatCA$550,000 worth of musicrecordings on CDR together with 14computers, CDR and DVD-R burnersand printers for falsifying inlay cards.Six persons were charged withfraudulent trading, having beenidentified as being responsible forsupplying flea markets with piratematerial.

RUSSIA/CIS● February 2004 - Russia

An IFPI Moscow investigation led to asearch being carried out by officers ofthe Economic Crime Department in aclandestine DVD plant. The plant wasfound to contain three DVD lines withdouble moulding capacity andcapable of manufacturing 18 millionDVDs per annum. In total 25,000completed DVDs and 800 stamperswere recovered.

● January 2002 - Russia

An IFPI Moscow investigation with lawenforcement authorities uncoveredtwo clandestine CD warehouses inMoscow, one of which was based in aScientific Institution under a specialsecurity regime. Both weresubsequently raided and 105,000pirate CDs were seized. Both locationssupplied wholesale customers invarious cities. There were six arrests.

● May 2002 - Belarus

Belarus Customs stopped a vehicletravelling to Ukraine and seized11,000 pirate CDs from a hiddencompartment. Subsequent forensictests proved that the CDs had beenreplicated at a plant in Belarus. InAugust 2002, Police from the BelarusMinistry of the Interior, assisted byIFPI investigators, raided the plant

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and a criminal case has beeninitiated. Its two replication lines,were placed under an administrativeprocedure, sealing the lines pendingthe outcome of criminal proceedings.

● November 2002 - Russia

Intelligence and evidence supplied byIFPI Moscow and the Secretariat’sForensic Unit instigated a raid by theRussian Interior Ministry on a majorCD plant. 234,000 pirate discs wereseized.

● September 2000 - Russia

The public relations department of theFederal Security Service (FSB),Moscow announced the elimination ofa criminal organisation headed byone, Ziyaudi Terloyev. Thisorganisation was reported to havebeen financing illegal rebel formationsin Chechnya. Integral to Terloyev’sactivities was the manufacture ofpirate compact discs at a plant inNoginsk, outside Moscow. During theraids this plant was closed and5,000 pirate discs seized. Explosives,grenades, detonators and ammunitionwere reported seized at the suspects’residences. It was estimated that thisgroups average monthly earningsamounted to over $500,000.

SOUTH EAST ASIA● April 2003 - Philippines

Officers from the PhilippineVideogram Regulatory Board (VRB)supported by Police units, took actionagainst street vendors selling piratediscs. During this action, in whichviolent protests were staged, a manlinked to the vendors was shot andkilled by Police. Subsequently, it wasestablished that the dead man wasthe son of an alleged commander ofan MILF unit, a proscribed terroristorganisation, operating in Mindanao.

● January 2002 - Taiwan

Following the seizure of a large

quantity of pirate CDs in Paraguay,information regarding themanufacturing source was passed toIFPI South East Asia. Furtherinvestigation identified the offendingplant, which was raided with the localauthorities. 19 master discs(stampers), containing Latin musicrepertoire, were seized along withproduction records showing that100,000 CDs had been produced andshipped to Paraguay.

● January 2002 - Taiwan

IFPI South East Asia investigations ledto the discovery of two covert CDplants. The first yielded two CD lines,300 pirate master discs (stampers)

Counterfeit CDRsseized inPhilippines

Sophisticatedmachineryimpoundedin Russia

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and 50,000 infringing CDs. Evidencelinked this plant with a Triadorganised crime syndicate. The otheroperation, resulted in the seizure ofone CD line, 135 stampers and300,000 pirate CDs.

● May 2001 - Taiwan

A raid on residential premises inKaoshung City, located 70,000suspected pirate discs and illegalfirearms. Further searches, at linkedpremises, uncovered an arms factoryrunning alongside a sophisticatedCDR facility. In total 17 rifle barrels,seven modified handgun barrels, 10

shotgun barrels, 10 cartridgemagazines, 50 bullets and otherequipment were seized.

● July 2002 - Hong Kong

A number of locations were searchedby law enforcement authorities and atotal of 149 persons arrested,including eight senior members of theSun Yee On Triad Group. Thosedetained were suspected ofinvolvement in trafficking in dangerousdrugs, robbery, theft, the sale of illegalfuel, smuggling cigarettes,manufacturing pirate CDs, beingmembers of triad societies, illegal

gambling and loan-sharking. Apartfrom pirate optical discs, the exhibitsseized included, smuggled cigarettes,illegal fuel, marijuana, ecstasy, heroinand offensive weapons.

● April 2002 - Taiwan

After prolonged surveillance, IFPIEnforcement personnel and the policeraided an underground plant inTaiwan. One production line and 20master discs (stampers) were seized.Information gleaned at this raid ledIFPI investigators to another buildingwhere 100,000 pirate CDs wereseized.

● August 2002 - Taiwan

Raids by IFPI investigators andTaiwan’s Anti-Piracy Task Force led tothe seizure of two production lines,38 master discs (stampers),354,000 pirate CDs and 223,000video CDs.

● April 1999 - Macao

The IFPI South East Asia RegionalEnforcement office had been workingclosely with the Macao authorities tohelp identify organised crime gangssmuggling pirate disks from theenclave to Hong Kong. One of themethods discovered was the storageof pirate discs in sealed oil drums inunderwater locations prior tocollection by smugglers, a tacticfrequently deployed by high levelinternational drug traffickers.However, the scale of their growingsophistication was illustrated by theinterception of a Mainland Chinesefishing boat, entering Hong Kongwaters from Macao, by Hong KongPolice. On close inspection the vesselwas found to be carrying asubmerged object. When the objectwas floated it was found to be a 14metre concrete bridge support,which had been modified totransport pirate optical discs. (seeillustration above). When opened the‘submarine‘ was found to be carryingseveral hundreds of thousands ofdiscs worth in excess of HK$5million. The crew of the fishing boatwas arrested.

Submarine used for smuggling CDs

Massduplication

anddistribution

in Taiwan