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 penalties for intellectual property violations have been adopted, but few if any cases have been commenced under the new laws. Further, it is not clear whether the Customs Law provides the proper authority to seize material at the border as required by the TRIPS Agreement. Ineffective border enforcement has allowed the importation of illegal sound recordings, and, if not addressed, could cause Kazakhstan to become a target for illegal optical media producers, a problem that other countries of the region have faced.


 * Kuwait had been lowered to the Watch List this year in recognition of its efforts over the past year to address concerns regarding its intellectual property laws and enforcement actions. The Kuwaiti Parliament passed a copyright law in 1999 that provides a legal framework for protection of U.S. works and sound recordings in Kuwait, and provides the basis to commence enforcement against copyright piracy immediately. Kuwait conducted its first significant enforcement actions under this law early this year. Although some concerns remain with this law, the Government of Kuwait has pledged to submit amendments to make the law fully compliant with the TRIPS Agreement, as well as to implement its draft patent law. We look to Kuwait to pursue sustained and deterrent enforcement actions and quickly pass the draft patent legislation. We will continue to consult informally with the Government of Kuwait in an effort to encourage it to resolve outstanding TRIPS compliance concerns in the coming months.


 * Although Latvia has made progress in improving its intellectual property rights regime since it became a member of the WTO in February 1999, there is still much room for improvement. Latvian law does not allow for civil ex parte searches. We urge the Government of Latvia to address these concerns and to make additional efforts to combat piracy. Although pirate optical media production currently is not a problem, there exists a pervasive transshipment problem in Latvia, not only in optical media but in other copyrighted products as well, with much of Latvia's pirated business software flowing over the border from Russia.


 * The new copyright law provides a firm basis for copyright protection for U.S. works and sound recordings. However, the law contains exemptions that are not consistent with international standards, and there has been little enforcement against piracy. End-user piracy of computer software is pervasive among large companies, banks, trading companies, and most government ministries. In addition, optical media production facilities are reportedly being set up, with the potential for Lebanon to become an exporter of pirated product. The Lebanese Cabinet approved a new patent bill earlier this year, and we urge the Parliament to quickly pass the legislation. Concerns also remain that health authorities are registering unauthorized copies of patented pharmaceuticals. We look to Lebanon to take swift action to addresses these concerns.


 * Although Lithuania enacted a new Copyright Act in 1999 and acceded to the Geneva Phonograms Convention in 2000, significant problems remain. Lack of copyright enforcement has led to a pernicious transshipment problem, with many pirated products moving from Russia and Ukraine to Western Europe via Lithuania. Piracy is also problematic in the Lithuanian domestic market. Lithuania signed a yet-unratified bilateral agreement with the United States in