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 Customs Service as they were entering the United States. The vast majority of these goods were either apparel items with counterfeit trademarks or optical media products. Moreover, production of pirated optical media has grown substantially in 2002. With respect to patents, Pakistan's 2002 ordinance undermines improvements that the Government of Pakistan made to its patent law in 2000 to comply with its TRIPS obligations. In addition, there is no protection for confidential test data. The United States calls on the Government of Pakistan to improve its civil and criminal enforcement of intellectual property rights, including judicial and prosecutorial measures to address counterfeiting and piracy, expeditiously close pirate optical media production facilities and enact an optical media licensing regime to impede the growth of pirate enterprises and deter future potential pirates. We also call on the government of Pakistan to reinstate patent protection, and implement the protection of undisclosed test data in the near term.

PERU

The Government of Peru issued a software legalization decree and recently took some steps to destroy pirated and counterfeit products. However, piracy rates for all copyright industries remained high, in particular for sound recordings, where, according to industry, piracy has devastated the legitimate market. Of concern specifically is the fact that few prosecutions and deterrent sentences are issued. In the patent area, Peru recently rescinded second-use patent protection for pharmaceuticals in the face of Andean Community pressure. In addition, Peru is failing to protect confidential proprietary test data that is submitted for marketing approval of pharmaceutical and agricultural chemical products. This is a growing, and glaring problem and U.S. industry reported that it has caused significant commercial damage. The industry is particularly concerned that infringing copies take market share away while rights holders are forced to expend resources and time seeking redress in local courts. We urge Peru to take strong actions to protect intellectual property rights, including by issuing a data protection decree. We will monitor Peru's actions in this respect, and will review any progress in the Fall.

ROMANIA

Ongoing piracy problems overshadow the real progress Romania has made in developing its intellectual property regime. Although Romania increased raids and seizures of infringing materials in 2002, poor border enforcement, the low priority level given to piracy by regional and local authorities, prosecutors and courts, and the lack of resources dedicated to the issue, all combine to make intellectual property protection a continuing challenge in Romania. We urge the Romanian government to make enforcement against piracy a priority and set goals for tough anti-piracy sanctions; encourage the police to increase the number of anti-piracy raids; encourage the prosecutors to actively pursue more cases; provide a clear basis for civil ex parte searches; and improve border enforcement by providing customs officials with ex officio authority to make inspections and seizures.

May 1, 2003