Jan 14, 2009
This report argues that buying and selling pirated films is not a victimless crime. Because profits are huge, the cost of entry minimal, and the risks relatively low, organized-crime groups worldwide use counterfeiting to fund serious criminal activities. Three case studies offer evidence that terrorist groups have also supported their operations through film piracy. Stronger measures are recommended to combat a problem that threatens the global information economy, public safety, and national security.
There is compelling evidence of a broad and continuing connection between film piracy and organized crime. Piracy is high in payoff — with profit margins greater than those of illegal narcotics — and low in risk, often taking place under the radar of law enforcement. In addition, terrorist groups have in some cases used the proceeds of film piracy to finance their activities. Besides being a threat to the global information economy, counterfeiting threatens public safety and national security. That is the conclusion of a new RAND report, Film Piracy, Organized Crime, and Terrorism.
The report offers detailed descriptions of 17 case studies, based on more than 2,000 pages of primary source materials and 120 interviews with law enforcement and intelligence agents in 20 countries. The table below lists the criminal groups examined, their bases, and the range of crimes they commit. As it shows, all the criminal organizations that engaged in film piracy in these case studies also carried out other, more serious and violent crimes. In the case of DVD film piracy, criminal groups are working to gain control of the entire supply chain, from manufacture to distribution to street sales, consolidating wealth and influence in virtually every region of the globe. In some areas, this influence extends to law enforcement and political leaders, who are bought, intimidated, or induced to create “protected spaces” where crime flourishes.
|Organized-Crime Group||Base Location||Film Piracy||Counterfeiting||Racketeering||Human Smuggling||Money Laundering/
|Illegal Gambling||Loan-Sharking||Narcotics Trafficking||Prostitution||Weapon Trafficking||Contract Killing||Document Forgery Services|
|Big Circle Boys||Canada||x||x||x||x||x||x||x||x||x||x||x|
|Lotus Trading Company||England||x||x||x|
|Madrid Human Smuggling Ring||Spain||x||x||x|
|Wo Shing Wo Triad||Hong Kong||x||x||x||x||x||x||x||x||x||x||x||x|
|San Yee On Triad||Hong Kong||x||x||x||x||x||x||x||x||x||x||x||x|
|Ang Bin Hoey Triad||Malaysia||x||x||x||x||x||x||x||x||x||x||x||x|
Three of the documented cases provide evidence that terrorist groups have used the proceeds of film piracy in one way or another to finance their activities:
Incentives for government action to address intellectual- property theft are often weak. In some cases, corrupt officials have been co-opted by criminal elements. In other cases, the prevailing view is that multinational corporations should not be entitled to protection of intellectual property. Some governments may also be reluctant to close off an important source of income in poor areas. Even if the political will exists, the resources for enforcement in many developing countries are limited. As the connection between piracy and organized crime — and even terrorism — becomes clearer, some developed countries are taking stronger steps to address the problem. The most innovative and rigorous enforcement programs described in the report are in the United States, Britain, and Hong Kong.
The authors recommend efforts to reduce demand for pirated goods through opening film markets, international treaties, and public-awareness campaigns. They also recommend five areas in which governments should act to reduce the supply of counterfeit products: