The chairman's opening statement noted that piracy and counterfeiting in this industry have increased substantially because of reproduction technology advances and now account for losses ranging over $600 million a year domestically. Moreover, shipping pirated films overseas could undermine a profitable export and adversely affect the balance of trade. In a reversal of previous policy, a DOJ official expressed the department's support for the bill with a few revisions in the forfeiture provisions. She answered questions regarding the detection of counterfeit films, enforcement problems, and the infiltration of organized crime into this area. The other witness supported the bill on behalf of both the MPAA and the Recording Industry Association of America. He emphasized that these crimes affect not only the motion picture and recording industries but also the public who pay for illicit goods of inferior quality. He also commented that the law and courts traditionally impose light penalties for the theft of intellectual property as opposed to real property. Committee members asked the witness about the involvement of organized crime in counterfeiting, INTERPOL's efforts to combat international pirating, and whether the penalties proposed in the bill were severe enough to deter white collar criminals operating in a multimillion dollar industry. The text of S691 and prepared statements of the witnesses are appended.