London - March 13, 2001
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 anually. 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".
Background
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.
IFPI is the organization representing the international recording industry. Its
members comprise more than 1400 record producers and distributors in over 70
countries.
For further information contact: Adrian Strain, IFPI tel: +44 207 878 7900/7939