RIAA Files Special 301 Report With USTR Outlining Problems in 58 Countries

Washington, DC - February 16, 1999 - In cooperation with the International Intellectual Property Alliance, the Recording industry Association of America today filed a report with the United States Trade Representative (see attached summary) outlining the problems that U.S. record companies face conducting business in foreign marketplaces. The report highlights inadequacies in copyright protection with respect to standards and enforcement, as well as identifies major impediments to market access.

Of the 58 countries detailed in the report, Israel is proposed as a Priority Foreign Country – the most serious designation. The association has asked for immediate action in Israel, where the U.S. recording industry lost $60 million in 1998. The report is filed in accordance with Special 301, a provision of U.S. trade law requiring the U.S. Trade Representative to identify countries that deny adequate protection of intellectual property or market access to intellectual property owners. For those countries designated as Priority Foreign Countries, the U.S. Government must begin discussions looking toward improved copyright protection. Those designated as priority countries face the potential loss of market access to the United States for their exports.

“The recurring theme of today’s report is a continued lack of enforcement in many territories, particularly with regard to a burgeoning trade in illegal CDs,” said Neil Turkewitz, executive vice president, international. “For example, in the last year, the piracy rate has nearly doubled in Israel due to lax law enforcement.”

The RIAA has proposed that Poland and the Ukraine be placed on the Priority Watch List for the rapid growth with which the two countries have entered the pirate marketplace. According to Turkewitz, these countries, and the Ukraine in particular, have grown into major producers and distributors of piratical CDs.

“On a positive note, over the course of the year tremendous progress has been made in Bulgaria where the Bulgarian government joins Hong Kong and China in adopting certain laws to control illegal optical media production. These safeguards against piracy have proven to be extremely useful and effective,” added Turkewitz. “Unfortunately, the Ukraine has taken Bulgaria’s place as the principal country of production and export for pirated product. In 1996, there was one CD plant in the Ukraine, now there are four plants producing illegal CDs.”

In the Priority Practices section, Japan is cited for violating TRIPS obligations by allowing subscription-based music services without extending rights to U.S. record companies for the storage and transmission of the recorded music they have created. “Japan’s practices are without a doubt unreasonable and unfair,” said Turkewitz.

The RIAA is a trade association whose members create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States.

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The Recording Industry Association of America (RIAA) is the trade organization that supports and promotes the creative and financial vitality of the major music companies. Its members are the music labels that comprise the most vibrant record industry in the world. RIAA® members create, manufacture and/or distribute approximately 85% of all legitimate recorded music produced and sold in the United States.

In support of this mission, the RIAA works to protect the intellectual property and First Amendment rights of artists and music labels; conduct consumer, industry and technical research; and monitor and review state and federal laws, regulations and policies. The RIAA® also certifies Gold®, Platinum®, Multi- Platinum™ and Diamond sales awards as well as Los Premios De Oro y Platino™, an award celebrating Latin music sales.