RIAA Praises Administration for its Stand Against Copyright Piracy in Foreign Markets

Annual Government Report Detailing Deficiencies Of IP Protection In Foreign Markets Issued

Washington - May 01, 2003 - The Recording Industry Association of America (RIAA) today praised the Administration’s latest efforts to highlight intellectual property piracy in overseas markets.

U.S. Trade Representative (USTR) Robert Zoellick today released the office’s annual “Special 301” report detailing inadequacies in the protection of U.S. intellectual property in foreign countries. Zoellick named 74 trading partners as failing to provide adequate and effective intellectual property protection as required under U.S. trade laws, including one country, Ukraine, identified as a “priority foreign country” (those countries that have the most onerous or egregious acts, policies or practices) and 11 cited on the “priority watch list” (countries with policies and practices not as onerous or egregious as priority foreign countries, but which nevertheless require special attention from the U.S government).

"Special 301" is a provision of U.S. trade law that requires USTR to identify countries that fail to provide adequate and effective protection to U.S. intellectual property. It also provides for the imposition of trade sanctions or the removal of trade preferences where countries do not cure such deficiencies.

"Music and other copyrighted materials are some of America's most important, cherished and visible exports,“ said Neil Turkewitz, Executive Vice President, International at the RIAA.

“Significantly reducing the piracy of our products in other countries is an increasingly important priority for our industry. Today's announcement by Ambassador Zoellick reflects the importance that he and this Administration place on ensuring that our trading partners live up to their international obligations in the protection of our critical U.S. assets. On behalf of the creators of today and tomorrow, we thank Ambassador Zoellick and his dedicated team for their essential support," Turkewitz added.

Highlights of the USTR announcement include:

• Ukraine remains a priority foreign country for its involvement in the manufacture and distribution of pirate CDs. The U.S. Government withdrew benefits from Ukraine under the Generalized System of Preferences (GSP) in August 2001, and imposed $75 million worth of sanctions on Ukrainian imports on January 23, 2002, based on the repeated failure of Ukraine to comply with the June 2000 Joint Action Plan. These sanctions remain in effect due to Ukraine’s failure to adopt and enforce adequate Optical Disc (OD) media licensing legislation. Although enforcement efforts have resulted in a decline in the production of pirate media within Ukraine, there is still substantial traffic in illegal optical disc media, both in street sales to consumers as well as larger distribution to Western Europe, the Baltics, and elsewhere.
• The Peoples' Republic of China and Paraguay continue to be monitored under Section 306 regarding compliance with their bilateral commitments to the US Government. In China, piracy of recorded music still hovers at over 90 percent , and we look to the Government of China to take immediate and decisive steps to address this through increased criminal prosecutions. Similarly, Paraguay’s porous borders and lax enforcement system continue to nurture and protect criminals involved in the mass distribution of pirate product.
• Taiwan and Russia are cited for their explosive growth in optical media piracy. Significantly stronger measures are urgently needed by both trading partners to address this problem.
• Similarly, the report calls for action against the alarming growth of optical media piracy in Thailand, the Philippines and Indonesia
• Serious problems continue to occur in Brazil and Mexico--mostly regarding enforcement-related failures. We call upon these countries to increase significantly their enforcement activities.
• Korea is of particular concern to RIAA given its failure to fulfill promises made during last year’s review. Of most concern to RIAA is Korea’s failure to modify its copyright law to protect sound recordings in the digital environment. RIAA is pleased that USTR will conduct an out-of-cycle review of Korea in the fall and that USTR is prepared to move Korea back to the priority watch list if it fails, inter alia, to provide an exclusive transmission right for sound recordings.
• The report also names Poland and Mexico as tolerating to two of the largest pirate marketplaces in the world--the Warsaw Stadium and Tepito in Mexico City respectively. We continue to call upon these governments to take decisive action against these open and notorious pirate bazaars.

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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.