Page:Special 301 Report 2003.pdf/10



UKRAINE

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 are still 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 significant 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. Despite these problems, Ukraine's copyright law is generally adequate and there has also been some progress in fulfilling TRIPS requirements as part of Ukraine's WTO accession process. Unfortunately, any positive movement on copyright is still overshadowed by the continued lack of adequate OD media protection. We urge the Ukrainian Government to pass an adequate optical media law in the very near future. In addition, enforcement of trademarks is lacking. A number of U.S. firms have complained of trademark counterfeiting for fertilizers and other industrial products.

CHINA

The United States and China concluded bilateral intellectual property (IP) agreements in 1992 and 1995 that were the basis for resolving two investigations under Section 301. The U.S. Government has been monitoring China's implementation of these agreements since they were concluded. In addition, China became a member of the World Trade Organization (WTO) in December 2001 and agreed that it would implement fully its IP obligations from the date it became a WTO Member.

China's WTO accession, and the concomitant entry into force of its intellectual property rights (IPR) obligations have resulted in improvements in China's statutory system for the protection of intellectual property. However, significant concerns remain, particularly with respect to enforcement of IPR. The TRIPS Agreement requires China to implement effective enforcement procedures and provide remedies that have a deterrent effect. Although China has revised its IP laws and regulations to strengthen administrative enforcement, civil remedies and criminal penalties, violations of IPR are still rampant. The lack of transparency and coordination among Chinese government agencies, local protectionism and corruption, high thresholds for criminal prosecution, lack of training and weak punishments all hamper enforcement of IPR. China remains one of the last countries in the world that fails to use, in practice, its criminal law to go May 1, 2003