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 the term of protection, protection for pharmaceutical and agricultural products and compulsory licensing. However, Kuwait issued a decree in December 1998 to ban the registration of unauthorized copies of drugs still under patent in the country of origin. The decree takes effect June 1999. Kuwait's trademark law also falls short of TRIPS especially with regard to the lack of protection for unregistered well-known marks. We urge Kuwait to take the necessary steps to bring its intellectual property laws into full compliance with TRIPS by the January 1, 2000 deadline. We will conduct an out-of-cycle review of Kuwait's progress toward addressing these concerns in December 1999.


 * Macau has taken positive steps to address the problem of optical disk piracy. It has strengthened the legal regime and has increased raids and enforcement efforts. There is strong evidence that Macau remains a major source of pirated material and there is little evidence that Macau's legal and enforcement actions have been effective in reducing piracy significantly. Lack of transparency in enforcement efforts and a slow moving judiciary are particular problems. We urge Macau to step up its enforcement efforts in the areas of prosecution, border control, and licensing and inspections. We also call on Macau to enact a new copyright law, which has been under consideration for the last two years.


 * The Government of Peru provides both administrative and criminal avenues for enforcement. While each of these has been useful to rights holders up to a point, each has its inadequacies. The Appellate Tribunal of the National Institute for the Defense of Competition and the Protection of Intellectual Property (INDECOPl) has been unwilling to impose deterrent penalties and has in the past year been slow to reach decisions. Meanwhile, insufficient customs, police and judicial action have been a problem in such areas as sound recordings. The U.S. Government has signaled its concern with the functioning of INDECOPI's Appellate Tribunal, but the response has not been satisfactory. Therefore, Peru is being moved to Priority Watch List.


 * The Government of Russia has not made sufficient progress to address the lack of adequate and effective protection for intellectual property since last year's review and therefore remains on the Special 301 Priority Watch List. Russia has a relatively comprehensive legal regime, with some significant exceptions, notably its failure to provide copyright protection for pre-existing works, and the absence of Customs authority to examine and seize suspected infringing goods or works. Russia has proposed comprehensive legislation to amend the Customs Code, as well as amendments to the Criminal and Administrative Procedure Codes to further strengthen the IP regime. Nevertheless, the U.S. government remains seriously concerned by renewed discussion of a new detailed and lengthy Civil Code (Part III) in the area of intellectual property. This could undermine progress made to date towards TRIPS compliance and WTO Accession and reduce already weak IP enforcement. While police investigations of IP cases have increased substantially, this has not carried forward into expanded prosecutions and imposition of deterrent penalties. More needs to be done. The U.S. views positively the recent results of the Bilateral Intellectual Property Working Group and ongoing law enforcement technical assistance, and looks forward to continued cooperation and progress through these mechanisms.