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Viewing cable 07LAGOS767, NIGERIA: LOWER NIGERIAN TARIFFS COULD REDUCE

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Reference ID Created Released Classification Origin
07LAGOS767 2007-12-03 06:01 2011-08-25 00:00 UNCLASSIFIED Consulate Lagos
VZCZCXRO1596
RR RUEHMA RUEHPA
DE RUEHOS #0767/01 3370601
ZNR UUUUU ZZH
R 030601Z DEC 07
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 9633
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 9379
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEFDIA/DIA WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RUEAWJA/DEPT OF JUSTICE WASHDC
UNCLAS SECTION 01 OF 02 LAGOS 000767 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR AF/W, STATE FOR INR/AA 
DEPARTMENT PASS TO USTR (AGAMA) 
TREASURY FOR DPETERS 
USDOC FOR 3317/ITA/OA/KBURRESS 
USDOC FOR 3130/USFC/OIO/ANESA/DHARRIS 
USDOC FOR USPTO - PAUL SALMON 
USDOJ FOR MARIE-FLORE KOUAME 
 
E.O. 12958: N/A 
TAGS: ETRD ECON KIPR PGOV NI
SUBJECT: NIGERIA: LOWER NIGERIAN TARIFFS COULD REDUCE 
COUNTERFEITING 
 
 1.  SUMMARY: At a recent lunch meeting, representatives of 
Pfizer, Microsoft, Hewlett Packard (HP), and the 
International Federation of the Phonographic Industry (IFPI) 
discussed common obstacles their industries face in enforcing 
intellectual property rights (IPR) in Nigeria.  While the 
lack of respect for intellectual property rights hampers all 
industries, each pushed for solutions specific to their 
industry.  The common way forward depends on lowered import 
duties to make genuine products affordable, strengthened laws 
and support for Nigerian governmental and private industry 
efforts.  End Summary. 
 
----------------------------------------- 
High Import Duties Encourage Counterfeits 
----------------------------------------- 
 
2. While Nigerian consumers are generally aware of the 
problems of counterfeit drugs, thanks in large part to the 
extensive public awareness campaigns undertaken by the 
National Agency for Food, Drug Administration and Control 
(NAFDAC), counterfeiting remains an enormous problem for 
Pfizer.  NAFDAC estimates that counterfeit goods make up 
twenty percent of the market, while Pfizer estimates they are 
a full 80 percent of the market.  Pfizer representatives at 
the meeting said they sometimes cannot distinguish a 
well-packaged counterfeit product from a legitimate product, 
and send samples both to their London lab for testing and to 
NAFDAC to be entered into NAFDAC,s database. 
 
3. Though Pfizer and NAFDAC work together, Pfizer sees the 
agency as understaffed and unable to perform all the work it 
needs to do.  Most counterfeit pharmaceuticals are produced 
in India, although the company knows of Chinese counterfeit 
drugs as well.  It is not known exactly how large shipments 
of drugs from these countries arrive in Nigeria, which points 
to the need for stronger border inspection and strengthened 
skills for customs officials, Pfizer representatives said. 
(Comment: It may also point to insider complicity and 
corruption.  End Comment.) High import duties make imported 
drugs prohibitively expensive for many in the health care 
system. Pfizer has heard of hospitals purchasing counterfeit 
medications to keep costs down. 
 
4. Nigeria,s high import duties encourage counterfeiting of 
all products because no importer can bring in authentic 
products and sell them at a reasonable cost, participants 
agreed.  The representatives at the meeting had purchased 
counterfeit or pirated goods themselves and suffered the 
consequences: poor quality videos and software that damaged 
their computers and audiovisual equipment.  These ancillary 
costs make the final price paid for the counterfeit drugs, 
movies or CDs equivalent to or higher than the cost of 
authentic products.  IPR is a source of economic value to 
individuals, companies and governments alike, the 
participants stressed. 
 
-------------------------------------------- 
Copyright Commission Lacks Capacity, Funding 
-------------------------------------------- 
 
5. The representative of the International Federation of the 
Phonographic Industry (IFPI), who also represents the 
Business Software Alliance (BSA), decried the public 
perception of IPR violations of audio and visual recordings 
and software as insignificant and benign.  Software customers 
cannot find genuine products to purchase.  BSA estimates that 
more than 80 percent of software in Nigeria is pirated, well 
above the global rate estimated at 35 percent.  For example, 
Microsoft recently held a meeting with cybercaf owners to 
disseminate free cybercaf management software that would 
reduce owners, costs, but at the same time ensure that the 
owners used other legitimate Microsoft products.  Cheers 
arose when the software was offered free of charge, until 
Microsoft emphasized it only worked with registered and 
legitimate software packages.  Then faces fell throughout the 
audience, the Microsoft representative said. 
 
 
LAGOS 00000767  002 OF 002 
 
 
6. IFPI says it supports the use of a NQerian Copyright 
Commission (NCC)-registered stamp, placed in production 
machinery to trace the origins of all discs, to combat disc 
piracy.  Also, in May 2007, the Economic and Financial Crimes 
Commission (EFCC) took on prosecution of all IPR violations. 
IFPI and the BSA now rely primarily on the EFCC for 
prosecutions but are trying to build capacity in the NCC to 
handle these cases.  According to the attendees, the NCC 
needs better funding, via increased fees for registration of 
copyrights, in order to grow its capacity.  At the same time 
it needs to refocus its current spending by having fewer 
overseas trips for staff and by implementing more effective 
policies.  Stamping out in-country production of counterfeit 
items should be NCC,s first priority; a second priority 
should be improvement of the Customs Service's ability to 
interdict counterfeiters.  The NCC must learn how the 
equipment for pirating software gets in, but more importantly 
to which countries pirated products are shipped regionally. 
In addition, the laws pertaining to piracy must be 
strengthened and enforced, the IFPI/BSA representative said. 
IFPI is finding allies who support its efforts in the 
Business Association of Nigeria. 
 
7.  Comment: Points raised by these industry representatives 
about how high import duties foster counterfeiting, about the 
need to improve funding for the NCC via registration fees, 
and about the need for improved performance by Nigeria's 
customs service, may be fruitful topics for discussion in 
upcoming Trade and Investment Framework Agreement talks.  End 
Comment. 
 
8.  This cable has been coordinated with Embassy Abuja. 
 
HUTCHINSON