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East: IIPA Says Piracy Increasing In Region

Washington, 3 March 1999 (RFE/RL) -- The International Intellectual Property Alliance (IIPA), a coalition of associations representing U.S. book, movie, computer software, CD, and music producers, says the problem of piracy continues to grow among the nations in Central and East Europe and Central Asia.

In an annual report to the U.S. Trade Representative's office, the IIPA estimates that piracy in the nations in transition in 1998 cost American producers over $1.6 billion, a nearly 7 percent increase over 1997.

The worst by far was Russia where losses due to pirated goods exceeded $977 million. The alliance said the situation had been improving until the financial collapse last summer, when piracy jumped significantly and government enforcement efforts flagged.

The IIPA said the Russian government's decision to grant amnesty to pirates in 1998 "stripped away all deterrence" effect from the few criminal and administration convictions in 1997. It urged the U.S. trade representative to keep Russia on its high level "priority watch list" and to press Moscow to secure needed laws on protection of copyright material

The alliance pointed out that of the 12 nations in the CIS, all but Russia are in breach of their bilateral trade agreements with the U.S. because they have not yet joined the Geneva conference on phonograms (records and CDs) and only five -- Russia, Ukraine, Georgia, Moldova, and Belarus -- have joined the Berne copyright convention. Kazakhstan, which deposited its instrument of accession only on January 10, 1999, will officially join in mid-April.

But even then, said the IIPA, Russia and Ukraine still do not provide protection for works or sound recordings created before joining the convention. Belarus seems to be moving toward retroactive protection, said the IIPA, but in the other nine countries, the situation is unclear. Retroactive protection is also not currently provided in Romania, Poland and Hungary, it said.

The alliance noted that only five countries in the CIS -- Russia, Belarus, Kazakhstan, Tajikistan and Ukraine -- have formally confirmed their memberships in the Universal Copyright Convention and only three have amended their criminal code to include copyright violations. Even then, the IIPA said, Ukraine's penalties are so low that it is expected to adopt revisions this year.

The IIPA said that the failure of almost all of the CIS countries to fulfill their obligations under their U.S. bilateral trade treaties should be considered when the U.S. allows many of their goods to enter the U.S. under a special duty-free program.

Among its specific recommendations: The IIPA said that piracy of optical media (CDs, CD-ROMs and DVDs) in the Czech Republic threatens to get "significantly worse" while the government's promises on enforcement have remained unfulfilled, so Prague should be moved up to the same level of concern as Russia, on the Priority Watch list.

The U.S. Trade Representatives maintains a list of countries where there are problems with intellectual property rights violations, ranked according to the seriousness of the situation. At the very highest level, the list carries the possibility of immediate trade sanctions. No countries from the region are currently at that level.

In Poland, the IIPA said the failure of the judicial system along with a rise in pirate imports from its neighbors was a serious setback and should move Poland up to the priority watch list.

In Ukraine, the IIPA said the rising level of piracy without effective enforcement and the unregulated growth of illegal optical disk media plants should keep Kyiv at the same level of concern.

Belarus' lack of adherence to the phonograms convention, its failure to provide or apply civil or criminal penalties and the rising level of piracy generally in the country prompted the IIPA to recommend that Belarus be moved up to the next highest level of concern, the Watch List.

Bulgaria, which only last year was moved down from the Priority Watch to Watch list by the U.S. Trade Representative, remains of concern, said the IIPA because it has not eradicated the pirate CD manufacturing plants in the country and continues to provide less than effective enforcement of intellectual property rights.

Romania took some important steps to reform its legal regime by joining both the Berne copyright and Geneva phonograms conventions in late 1998, said the IIPA, but persistent problems of poor enforcement in Romania across all copyright industries, and a continuing lack of prosecutions, prompted the alliance to recommend that Romania be moved up to the Watch List.

Estonia also made progress in 1998, said the IIPA. Although the Estonian market is relatively small, the alliance said, it is dominated by piracy in almost every sector. Enforcement is thin, it said, and judicial enforcement almost non-existent. The alliance urged the trade representative to put Estonia on the Watch List as well, with a special review in the next six months.

Kazakhstan, despite adopting some copyright protection laws in recent years, still has a major problem which prevents U.S. creative industries from selling or producing in the country. The alliance urged that Kazakhstan be placed on a special list this year to bring American government pressure to make more progress.

IIPA President Eric Smith says the area of East and Central Europe and Central Asia is no longer the leading one for piracy in the world, eclipsed by problems in Israel, Greece, and China. Smith says the alliance estimates that Chinese piracy alone cost American firms more than $2.588 billion last year.

U.S. Trade Representative Charlene Barshefsky must issue her office's priority lists on the trade practices by April 30th. USTR officials say the IIPA report is a major source for the final recommendations.