RIAA Praises Administration Report Identifying Countries Failing To Protect America's Intellectual Property

Washington - May 03, 2004 - The U.S. Trade Representative, Robert Zoellick, today released his office's annual report detailing the inadequacies in legal protections of U.S. intellectual property in foreign markets. The Recording Industry Association of America (RIAA) commended the Administration's efforts, saying the new report would be an important tool in encouraging the global community to properly address issues relating to the protection of intellectual property, and to thereby provide more opportunities for economic development, cultural diversity and American competitiveness in the world marketplace.

The review arises from a provision of U.S. trade law known as “Special 301” that requires identification of countries that fail to provide adequate and effective protection to U.S. intellectual property. “Special 301” also provides for the imposition of trade sanctions or the removal of trade preferences where countries do not cure such deficiencies (link for U.S.T.R news release: http://www.ustr.gov/releases/2004/05/04-36.pdf)

Zoellick named 52 trading partners as failing to provide protection as required under trade laws. He identified five countries whose progress in implementing more effective protection will be specifically monitored in reviews that will be conducted later in the year: China, Taiwan, Malaysia, Poland and Israel.

“Today’s announcement by Ambassador Zoellick again underscores the Bush Administration’s continued efforts to improve international copyright protection and enforcement,” said Neil Turkewitz, Executive Vice President International for the RIAA. “This reflects the Administration’s multi-pronged campaign for advancing American economic and cultural interests -- employing strategies aimed at both enhancing new norms designed to respond to the challenges and opportunities of the digital age, and pressing for reform of enforcement practices so that opportunities may be realized.

“We are particularly heartened by the announcement of several out of cycle reviews in key territories that speaks to the Administration’s intention to make the protection of intellectual property rights an issue of ongoing concern, and not a matter that begins and ends with the report,” added Turkewitz. “In light of the nature of the problems highlighted in USTR’s report -- most notably the highly organized trans-national character of trade in pirated CDs, and the explosive growth of Internet related piracy, this kind of ongoing effort is absolutely critical.”

“Ambassador Zoellick and his entire team, as well as the other government agencies involved, deserve applause for their critical contribution to American competitiveness in the 21st century.”

ADDITIONAL BACKGROUND:

Highlights of the U.S.T.R. announcement include the following:

CHINA AND PARAGUAY: The Peoples' Republic of China and Paraguay will continue to be monitored under Section 306 to ensure compliance with their bilateral commitments with the U.S. government. Such monitoring, and appropriate action, are especially relevant this year given the recent commitments made by China during the April meetings of the U.S.- China Joint Commission on Commerce and Trade. The RIAA looks to the government of China to take immediate and decisive steps to fulfill these commitments in such a manner that piracy is reduced by at least 50 percent by the end of 2004, and further thereafter.

Similarly, while the government of Paraguay has manifested a laudable intention to deal with the serious piracy problems that have long plagued it, much remains to be done, and we are hopeful that 2004 will yield significant results in this critical battle.

RUSSIA AND TAIWAN: Russia and Taiwan, among others, remain on the priority watch list. Taiwan made some progress over the past year, but still has important steps to take, particularly regarding enactment of important legislation. An out-of-cycle review of Taiwan will take place later in the year to monitor progress.

While some legislative progress occurred in Russia in recent weeks, pirate production and exports remain a major problem. Russia is the leading exporter of pirated CDs in the world. Russia must: (1) urgently introduce optical disc legislation; (2) initiate an anti-piracy drive from the highest political level, and; (3) stop illegal CD manufacture and distribution, taking immediate steps to enforce copyright law and relevant licensing regulations. If significant progress on these matters is not made promptly, U.S.T.R. should consider revoking Russia’s GSP (General System of Preferences) benefits during its June 2004 review. [GSP provides a "preference," or privilege, to developing countries, which allows many of their products to enter the United States duty free. The program can assist developing countries to increase their trade with the United States.]

BRAZIL: Brazil also remains on the priority watch list. Piracy has spun out of control in Brazil and the Lula Administration has failed to implement a coordinated national anti-piracy plan to address the epidemic. The RIAA urges that U.S.T.R also consider revoking Brazil’s GSP benefits as part of the June review if significant improvement in Brazil does not occur in the interim.

UKRAINE: Ukraine continues to be identified as a Priority Foreign Country. In the past year, the government of Ukraine made a few attempts to fix optical disc regulation, but to no avail. It should be noted that the situation in the market has slightly improved during the last two years. However, Ukraine remains a transhipment country through which hundreds of thousands of illegal optical discs pour into the European Union and pirated music is still easily available in the streets and markets of Ukraine's cities to such an extent that it frustrates the development of a truly healthy music industry. The RIAA calls upon the government of Ukraine to finally abide by the commitments that it made in the US-Ukraine Intellectual Property Rights Agreement, and to thereby pave the road for a resumption of normal trade relations that have been impaired by Ukraine’s continued lack of compliance with the agreement.

ISRAEL: Israel will remain on the watch list. However, the report expressed alarm about legislation pending in Israel that would deny national treatment to U.S. sound recordings, in contravention of binding agreements between the United States and Israel. An out-of-cycle review is scheduled for July to ensure careful monitoring of this troubling situation. The RIAA urges firm and immediate trade action against Israel should this legislation come into effect. Just last week, an Israeli court confirmed the protection of U.S. sound recordings, and we urge the government of Israel to promptly abandon its proposed discriminatory legislation.

PAKISTAN AND KUWAIT: Pakistan and Kuwait were elevated to the Priority Watch List -- mostly for enforcement related failures. Pakistan’s pirate producers have been flooding the world market with pirate optical discs. Pakistani pirate production and export of pirated discs remains a major concern for the RIAA that must be addressed immediately.

THAILAND: U.S.T.R’s report noted high amounts of optical media piracy in Thailand, a new FTA negotiating partner. Thailand must enact optical disc and copyright reform legislation and significantly improve enforcement measure against copyright piracy.

KOREA: Korea remains a particular concern to RIAA given its failure to fulfill promises made during 2003. Of most concern is Korea’s failure to modify its copyright law to protect sound recordings in the digital environment to provide an exclusive transmission right for sound recordings. Korea has the highest broadband penetration in the world, but has not ratified copyright treaties adopted eight years ago that were designed to provide the necessary legal foundation for Internet commerce in copyrighted materials. As a consequence of this failure, Internet piracy is booming, and RIAA calls upon the Korean government to promptly adopt a legal infrastructure that in line of with its world class technological infrastructure.

BULGARIA: After having made significant strides in clamping down on CD piracy a number of years ago, Bulgaria's relaxation of its enforcement measures has led to a reappearance of some of the problems that nearly led to the imposition of U.S. trade sanctions more than five years ago. We hope this Watch List designation is taken by the government of Bulgaria as a wake-up call. Enforcement efforts need to be greatly strengthened, or the music industry in Bulgaria will collapse as a result of the devastating impact of unfettered physical and on-line piracy.

POLAND AND MALAYSIA: Out of cycle reviews also will be conducted on Poland and Malaysia. These reviews underscore the importance that USTR attaches to addressing pirate CD production in these countries.

#####

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.