U.S. warns Kyiv on CD piracy (03/25/01)

U.S. warns Kyiv on CD piracy

Ukraine largest producer of pirated CDs

by Yaro Bihun
Special to The Ukrainian Weekly

WASHINGTON - The United States has put Ukraine on notice: either curb the production and export of pirated compact discs (CDs) or face U.S. trade sanctions and other punitive action.

The Office of the U.S. Trade Representative (USTR) on March 13 designated Ukraine as a "Priority Foreign Country" under the "Special 301" program designed to advance the protection of intellectual property rights.

The USTR statement noted that for more than two years the U.S. government has been urging the Ukrainian government to close down illegal CD production facilities and enact legislation to adequately protect copyrights.

"Despite many promises, including high-level commitments made in June 2000, the Ukrainian government has been unwilling to curtail the activities of these pirates," the USTR said.

The American CD industry now considers Ukraine "the largest producer and exporter" of pirated optical disks in Europe. Last year it was characterized as "one of the largest." The USTR said that Ukraine's exports of pirated CDs are "disrupting markets throughout the region and beyond."

With the "Priority Foreign Country" designation in effect, the USTR has initiated an official investigation of Ukraine's practices and has requested consultations with its government. If Ukraine fails to address these concerns within three months, it may face the imposition of trade sanctions, jeopardize its entry into the World Trade Organization and undermine its efforts to attract trade and investment.

The U.S. recording industry estimates that for each of the last two years, with an annual domestic demand of 5 million CDs, Ukraine has produced and exported between 30 and 40 million pirated CDs. According to the USTR, Ukraine has the capacity to produce up to 70 million pirated CDs per year.

The USTR says that Ukraine has become a world leader in pirated CD production, which is costing the U.S. recording industry more than $200 million in lost revenue annually.

In June 2000 President Kuchma committed Ukraine to undertake a number of measures against this kind of piracy:

suspend unlawful and unlicensed CD production;
adopt proper optical media production and distribution regulations and monitor raw material, manufacturing equipment and CD exports;
improve significantly its copyright law and implement a modern copyright regime.

"To date," the USTR maintains, "Ukraine has not met any of these commitments."

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