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Sofia Targets Private CD Pirates; State Plant Unhampered

Prague, May 24 (RFE/RL) -- Bulgarian officials this week closed a small private compact disc factory in Veliko Turnovo as part of what the government is calling "an anti-piracy campaign."

However, there still have been no reported moves to curtail production at a state-owned factory accused by international monitors of being Bulgaria's largest pirate CD producer -- the DZU plant in Stara Zagora.

Bulgaria's National Investigation Service director Boyko Rashkov said that about 13,000 pirate discs were confiscated from a firm called SMC in Veliko Turnovo on Wednesday. Rashkov said that not a single pirate CD firm in the country "will be left untouched by our investigation" or by police and prosecutors.

The International Federation of the Phonographic Industry (IFPI) estimates that about 87 percent of Bulgaria's local CD market is pirate product. That organization monitors the activities of music pirates in more than 70 countries.

IFPI director Mike Edwards has complained that the state-owned DZU plant is now Europe's biggest producer of illegally-copied compact discs. He says the plant has produced millions of pirate discs and that many are being exported to Western European markets to be sold as legitimate product.

Bulgaria's DZU plant was a secretive military and computer research center during the Soviet era when Sofia produced most of the computer software for COMECON countries.

DZU's role in COMECON markets collapsed after 1989 when western products began flooding eastern Europe and the former Soviet Union. That left DZU managers scrambling to find a niche market and keep the plant working.

Western music industry executives say DZU's high-tech, high-security facilities make it a perfect base for CD and software pirates with ties to organized crime syndicates.

Until 1995, the chairman of DZU's board of directors was the former Bulgarian ambassador to the United States, Ognian Pishev.

In response to Bulgarian press reports that DZU produced 1.2 million bootleg CDs in 1994, Pishev said the plant was "just taking orders" from private businesses. He said that DZU "makes all parties sign a declaration which says they have copyright" for their production orders. He said that if any laws were being broken, it was by those who wrongfully claimed to have copyright privileges.

Edwards says illegal production at DZU has skyrocketed since Pishev was replaced by Atanas Atanasov early in 1995. Atanasov, a supporter of the former communists in the governing Bulgarian Socialist Party, had been a manager at the plant during the Soviet era.

DZU's pirating activities have been confirmed by RFE/RL's own investigations. Thousands of illegal DZU discs have been stocked by street vendors and private music shops across the country -- including the retail market leader there, Unison Corp.

But with increasing pressure on the government from Warner Brothers and the anti-piracy groups that it sponsors, counterfeit product has largely vanished from the shelves of Unison and other music shops during the past year. The trend follows passage last August of new international copyright protection laws by the Bulgarian parliament.

Correspondingly, CD prices have sky-rocketed from about $3 to more than $12 each -- a price well beyond the range of most Bulgarian consumers. One teenage Bulgarian girl describes today's music shops in Sofia as "museums" because, as she says, "Nobody can afford to buy anything anymore. Only to look."

However, dealers at street stalls still commonly stock pirate CDs from DZU and other Bulgarian manufacturers for $3 to $4.

A pirate CD distributor in Sofia told RFE/RL that "about ten" plants in the country now manufacture pirate discs, although he said that DZU remains the largest producer.

A shop owner in the second largest Bulgarian city, Plovdiv, told RFE/RL that he has sent thousands of illegal DZU discs to German firms in exchange for used western products. British customs officers also have seized cargoes of up to 10,000 illegal DZU discs from trucks attempting to infiltrate the U.K. market.

Edwards says that taken together, Bulgaria's CD pirates now have the capacity to make as many as 10 million discs a year. He says expansion into western markets is the latest trend. Other record industry monitors say they've found illegal DZU discs being sold across the former Soviet Union as well as in the former Yugoslavia, Turkey, Romania, Hungary, the Czech Republic and Israel.

Far from being upset with its state-owned pirates, the Sofia daily "Standart" newspaper reports that the Stara Zagora plant "causes a wave of national pride at home."