The U.S. government and the computer giant Microsoft say Panama is risking heavy commercial sanctions for widespread violations of laws on copyright and intellectual property.

Microsoft’s representative in Panama, Javier Castillo, said the informatics industry loses some nine million dollars annually due to the illegal reproduction of computer programmes in this Central American country.

He underlined that the pirating of computer programmes was not the work of “furtive criminals,” but that it took place in banks, computer distribution companies, and even government entities.

It is becoming more and more difficult to detect the activity, said Castillo, who added that the most common forms of piracy are the direct copying of a programme to the hard disk of a computer, or evasion of payment for the use of a programme.

Microsoft recently brought legal action in the United States and Panama against two Panamanian firms for violations of the copyright and intellectual property laws of both countries, the company representative said.

According to a report released this week in Washington by Business Software Alliance – BSA, a private institution that links the industry’s leading companies – the illegal reproduction of computer products reduced the industry’s profits 6.3 percent in 1996.

The BSA estimates that if the illegal activity did not exist, the computer industry would have been able to offer 130,000 new jobs and brought the U.S. treasury one billion additional dollars in taxes last year.

U.S. Ambassador to Panama William Hughes warned that Washington could slap the country with “heavy commercial sanctions” for its failure to control the illegal reproduction of computer programmes, films and videogames.

Besides the nine million dollars lost by the computer industry, the illegal activity costs distributors of movies and videogames an estimated 25 to 30 million dollars a year, according to U.S. government figures.

Hughes said Panama was at the top of the list of Latin American countries with respect to the pirating of films, and added that “the United States is very interested in seeing the Panamanian government make efforts to enforce the laws protecting the intellectual property of the major U.S. producers.”

He cited the Japanese videogames company Nintendo, which in a lawsuit brought in the United States complained that its products had not been protected in Panama.

Panamanian Deputy Minister of Trade and Industry Jose Troyano said his country’s laws on intellectual property and copyright were inadequate to tackle the problem.

He stressed that local authorities acted on every report of piracy, and mentioned recent raids of locales where films and videogames were illegally reproduced.