International recording industry welcomes US trade action on Ukraine
Pressure mounts internationally for action to tackle huge pirate CD industry
London, 13 March - The international recording industry today welcomed US trade action against Ukraine and called on the Ukraine government to stop flagrantly breaching international rules on the protection of intellectual property.
The move to designate Ukraine as a Priority Foreign Country under US trade law - a last step before trade sanctions - comes nine months after the Ukraine government committed to crack down on the country's huge pirate CD industry. There has been no progress towards fulfilling this commitment of June 2000.
International pressure on Ukraine from outside the USA is also mounting, especially in Europe. The European Union has made intellectual property protection a top priority of its bilateral trade agenda with Ukraine. Under the EU-Ukraine Partnership and Cooperation Agreement Ukraine must bring its IP laws and enforcement into line with the EU by the end of 2001. In recent meetings in both Brussels and Kiev the EU has been highly critical of the lack of progress towards this goal.
IFPI, representing 1400 record companies worldwide, estimates that Ukraine's export of millions of pirate CDs is costing the legitimate international industry more than US$300 million annually. The government of Ukraine has failed to implement key measures designed to tackle the problem, including regulation of CD plants, a new copyright law and the introduction of deterrent criminal penalties for copyright infringement.
IFPI has kept a regular presence in Kiev in the last few months to offer expert technical and legal assistance to the Ukraine government. Most recently, IFPI joined the United States Ambassador Carlos Pascual in Kiev to present forensic evidence of Ukraine's massive CD pirate production and exports.
Jay Berman, Chairman and CEO of IFPI, said: "The international recording industry welcomes the decisive measures taken today by the US government in naming Ukraine as a priority foreign country subject to possible trade sanctions. We have worked tirelessly to try and avoid this situation, but unfortunately these measures are completely justified.
"Copyright piracy is the enemy of international investment, of economic success and of all modern creative industries. We hope Ukraine will now seize the opportunity to take this problem in hand. At stake is not only Ukraine's international standing, but also the country's struggling record producers who are working hard to develop a legitimate business".
Priority Foreign Country (PFC) is the highest in a league of categories used by the US government in assessing the effectiveness of countries' protection of intellectual property. Under the Special 301 legislation, the United States Trade Representative (USTR) has the authority to impose economic sanctions on countries designated PFC.
Ukraine has five known CD replication plants with a total estimated production capacity of up to 70 million CDs per year. Legitimate consumer demand for CDs in Ukraine is estimated at between 1 and 5 million CDs per year. Millions of pirate CDs are exported in Europe and internationally. Pirate CDs from Ukraine have been found in more than 20 countries as far afield as South America and South Africa.
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