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Profits from software piracy are financing terrorist groups and Latin American criminal organizations, a spokeswoman for Microsoft Canada charged Tuesday.

Moreover, Microsoft anti-piracy manager Diana Piquette said in a press conference broadcast on the World Wide Web, organized software pirates are showing up in such places as Italy and Hong Kong, where major piracy was once rare.

In a statement covering the software giant's efforts to halt software theft in 2001, Ms. Piquette also slammed the Canadian government for its lax attitude toward the problem.

She pointed out that according to a study produced last year by the Canadian Alliance Against Software Theft (an association backed by Microsoft, Symantec, Apple, Adobe and other software developers), 38 per cent of software has been obtained illegally, while the U.S. number is only 25 per cent.

She said the U.S. government "takes piracy much more seriously" than Ottawa, and U.S. law provides higher penalties for offenders to discourage illegal copying of software.

"Canada still has a long way to go," she said.

Ms. Piquette said that software piracy is "less risky than drugs" for Colombian drug cartels, and profits are funneled to terrorist organizations in areas such as Northern Ireland. Moreover, she added, the "criminal penalties are often grossly inadequate" if pirates are caught.

Ms. Piquette did not specify which of the several violent organizations in Northern Ireland benefited from software piracy.

Microsoft isn't relying solely on police and government agencies to halt piracy. The software giant has developed its own automated system for finding illegal software on-line, she said.

In the past, Microsoft's pirate-hunters would surf the Internet manually looking for people offering illegal copies of software. Automated processes now hunt pirates much more efficiently on-line, accomplishing in 24 hours what took an entire month before, she said.

The problem for Microsoft, she added, was that when the company's lawyers sent notices of infringement to anyone offering pirated software on the Web, the sites would often reopen at another address, making it difficult to track their activities. With the automated system, she said, the new sites can be found much more quickly.

The new pirate-hunting tool has "a 99.5 per cent accuracy," she said.

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