September 2, 2010 / 5:32 PM / 9 years ago

Despite embargo, Cuba a haven for pirated U.S. goods

* Pirated U.S. TV shows, movies, software abound in Cuba

* U.S.-Cuba embargo blocks legal access to most U.S. goods

* Lack of formal U.S.-Cuba relations hurts enforcement

By Esteban Israel

HAVANA, Sept 2 (Reuters) - A few weeks after Ashton Kutcher’s latest comedy “Killers” premiered in the United States, the movie was already entertaining the masses in communist Cuba.

For two pesos, the equivalent of nine U.S. cents, the state-owned Yara movie theater in the heart of Havana offered Cubans a washed out and pixilated copy of Kutcher’s adventures as a CIA assassin who is himself targeted for a hit.

“It’s a very good flick. We just got it on DVD,” says a woman in the ticket office.

The problem is that “Killers” will not be officially released on DVD in the United States until Sept. 7 and even then Cuba will be off limits due to the 48-year-old U.S. trade embargo against the Caribbean island.

But half a century of U.S. sanctions have turned Cuba into a piracy haven and a missed opportunity for U.S. businesses.

Even though the embargo forbids U.S. companies like Microsoft (MSFT.O) from exporting software to Cuba, most personal computers on the island run unlicensed copies of its Windows operating system.

Pirated copies of the latest version, Windows 7, have been available for months from illegal vendors in Cuba.

The blue-skinned aliens of “Avatar,” James Cameron’s blockbuster film, appeared on Cuba’s state television in February while the movie was still breaking box office records around the world.

Surfing Cuba’s five television channels, all state-owned, a viewer could stumble across shows such as Disney Channel’s “Hannah Montana” and NBC’s “Friends,” or movies like Dreamworks’ “Madagascar 2”.

Video games of all types are sold by software pirates in Cuba for the equivalent of about $2.

“The reality is that U.S. products and services are down there whether the companies that make them sell them or not,” said Jake Colvin, Vice President for Global Trade Issues at the National Foreign Trade Council in Washington.

“The frustrating thing is that U.S. companies are getting nothing for it,” he told Reuters.


The trade embargo, imposed since 1962 with the aim of toppling the Caribbean island’s communist government, forbids most U.S. business with Cuba, with the key exception of agricultural products, and, under certain restrictions, medicines.

Cuba’s unofficial position is that the embargo limits access to so many products that it forces people to resort to piracy.

But it also does so with a certain relish, which is both the result of five decades of U.S.-Cuba hostility and a jab at the capitalist system Cuban leaders disdain.

The Business Software Alliance, a Washington-based industry group, says 63 percent of the computer programs being used in Latin America as a whole in 2009 were unlicensed and had an approximate commercial value of $6.2 billion.

But in Cuba, the piracy rate is estimated to be around 80 percent, if not higher, said Montserrat Duran, BSA director of legal affairs for Latin America.

Cuba has been more protective of its own products, having spent much time and money defending its world-famous Cohiba cigar and Havana Club rum brands in legal battles in the United States.

The National Foreign Trade Council says the current lack of formal diplomatic relations between the two nations makes it difficult for U.S. companies to raise these issues with Cuban authorities.

“Until we fix the relationship, until we have governments that talk to each other and have a better official relationship and we have rules that allow companies to interact and do business in Cuba we are not going to be able to address the problem,” said Colvin.


Better relations, when they come, could be a mixed blessing for Cuba’s financial exposure over pirated goods, one computer engineer on the island said.

“The day we finally resolve our problems with the United States, Microsoft’s Bill Gates will try to collect the bill. And it will be huge,” he said, asking not to be identified.

A spokesman for Microsoft declined to comment.

In the meantime, Cuba should focus on the future rather than worry about the past, said Business Software Alliance’s Duran.

“Nobody expects them to pay for what has been done, but governments should legalize their products and lead by example. People need to understand that piracy is a crime similar to stealing a car,” she said.

Cuba took a step toward addressing the problem last year when it developed a variant of the free, open-source operating system Linux and promoted its use in the country’s computers.

Cuban leaders said conversion to Linux would ease their security concerns about the widespread use of U.S. software and create another front in their long fight to resist U.S. domination. (Editing by Jeff Franks and Doina Chiacu)

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