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East: Intellectual Property Piracy Remains A Problem

Washington, 5 May 1998 (RFE/RL) -- U.S. Trade Representative Charlene Barshefsky has listed nine nations in Central/East Europe and Central Asia in the annual review of countries where intellectual property piracy remains a problem.

Barshefsky singled out Bulgaria for special note, praising Sofia for recent progress in beginning to enforce its copyright laws but also warning that unless it shows a commitment to "substantially eliminate" pirated music CDs and computer software by September, it could face trade sanctions.

Bulgaria was among 15 U.S. trading partners placed on the U.S. Trade Representative's "Priority Watch" list, the government's second highest level of concern, but the only one singled out with a deadline.

Russia, Turkey, Greece and the European Union (EU) were also on the list. "Russia remains one of the largest pirate markets" in the world, said the review. Moscow has adopted a legal framework that does not yet fully meet international standards and enforcement has been limited, it says.

The U.S. cautioned Moscow to bring its copyright laws into full compliance with international law "no later" than it's accession to the World Trade Organization (WTO).

The International Intellectual Property Alliance (IIPA), an industry group, estimates that piracy losses in Russia exceeded 900 million dollars in 1997. In Bulgaria, it says, losses exceeded 200 million dollars.

The U.S. Trade Representative's office noted that in January Bulgaria announced a CD manufacturing plant licensing decree aimed at what the U.S. calls "the alarming increase" in pirate CD production in Bulgaria.

It also noted that Sofia has established a special enforcement unit which so far this year has carried out 174 operations seizing 120,000 pirate CDs.

That's a "welcome indication" of Bulgaria's resolve, said the Trade Representative, but added it must demonstrate a long-term commitment. "Should Bulgaria fail to maintain significant enforcement efforts," it said, it will be raised to the highest level of U.S. concern in September, making it liable to various trade sanctions.

For Greece and the EU, Barshefsky decided to move immediately by using the WTO's dispute resolution mechanism. On Friday, the U.S. Trade Representative formally charged that Greece continues to allow the theft of television programs and the EU continues to deny equal treatment to American intellectual property right holders when it distributes revenues collected on blank tapes and public performances.

At a lower level of concern, called the "watch list," the U.S. named the Czech Republic, Kazakhstan, Poland, and Ukraine among 31 nations with continuing copyright protection problems.

The Trade Representative said Ukraine needs to strengthen both its intellectual property laws and its enforcement. The laws must be brought up to international standards "no later" than when it gains admittance to the WTO, said the Trade Representative. Enforcement against pirates remains "minimal," with inadequate criminal penalties for piracy in general and no penalties for infringements against sound recordings, performers and broadcasters, the U.S. said.

Poland was listed because while its general enforcement has improved, it does not provide what the U.S. considers to be "adequate protection" for U.S. sound recordings. The Trade Representative said U.S. producers must have equal treatment with all other producers. Industry groups estimate that piracy in Poland fell by 80 million dollars between 1996 and 1997.

Kazakhstan was told by the Trade Representative that it has several remaining steps to meet international standards and trade agreement commitments with the United States. "We look to Kazakhstan to begin significant enforcement measures to reduce piracy rates," the U.S. said, adding that it must bring its laws into line "before" it joins the WTO.

The Czech Republic was listed because its enforcement of copyright laws "while improving, remains weak." The Trade Representative said Prague has brought its laws into substantial compliance with international standards, but must explore better methods to stop production of pirate optical media and to improve the effectiveness of police, customs and judicial authorities on enforcement.

Not listed, but noted in a section called "observations," were Estonia, Hungary and Romania.

Romania has made some "notable progress" in improving legal protection for intellectual property, said the Trade Representative's report, but needs to assure that police raids and seizures result in actual prosecutions. It called for increased enforcement by Romania, including better border controls to keep pirate goods out.

Hungary also made notable progress, the U.S. said, cutting piracy losses. Nevertheless, it said, piracy rates are still high and enforcement actions have so far failed to provide real deterrence.

The Trade Representative's office said Estonia, provides "no protection to foreign sound recordings" and the piracy of sound and video recordings destined for both the local market and export is "extensive." The U.S. said Estonian copyright laws are not up to international standards and enforcement is "weak at all levels." It cautioned Tallin that it must bring its laws into compliance "before" it joins the WTO.

The head of the association of major movie studios, the Motion Picture Association's Jack Valenti, applauded the Trade Representative's actions, especially against Greece and Russia. "Russia has begun to step up enforcement actions," said Valenti, but "continued actions are needed to assure a high level of success."