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 data exclusivity. Regarding the national treatment issue with respect to copyrights in sound recordings, new provisions in Israel's draft copyright bill, coupled with Israel's failure to provide clarification on the future status of national treatment, run counter to Israel's previous assurances and have reinforced U.S. concerns that it could cease national treatment protection for U.S. rights holders. An out-of-cycle review will be held this summer to assess whether Israel has made sufficient progress in responding to U.S. concerns on confidential test data, in ensuring that Israel will continue to provide national treatment for U.S. rightholders in sound recordings, and to consider whether Israel's Special 301 status should be changed.

ITALY

Despite the continued implementation of the 2000 Copyright Law and increased enforcement actions in 2003, piracy and counterfeiting rates in Italy remain among the highest in Western Europe. Widespread piracy continues in virtually all copyright-based sectors. Furthermore, although the Italian Society for Authors and Editors (SIAE) sticker requirement is waived for business software, a burdensome declaration procedure is necessary. While SIAE does not charge for declaration processing, companies must bear the internal administrative costs of following the procedure. In addition, U.S. industry reports that Italian government actions may adversely affect the prior practice of patent term extension for pharmaceuticals. Despite greater enforcement efforts by Italian law enforcement agencies and growing awareness of the economic and criminal implications of piracy and counterfeiting among some parts of the judicial system, IPR enforcement remains inadequate. We will continue to work with Italy to raise awareness regarding intellectual property issues and to improve IPR protection across all sectors. We urge the Italian Government to address the continued high piracy and counterfeiting rates, inadequate enforcement against these illegal activities by the judiciary, and curtailment of patent term extension for pharmaceuticals.

JAMAICA

In January 2004, the Jamaican Parliament approved a bill to protect geographical indications. The Jamaican Government has also made commendable enforcement efforts over the past year. However, while Jamaica's trademark and copyright laws are generally in line with international standards, we remain concerned over the continued failure to enact the Patents and Designs Act to meet Jamaica's obligations under the TRIPS Agreement and the U.S.-Jamaica bilateral IP Agreement. We urge the Government of Jamaica to reform its patent law as soon as possible to comply fully with international standards for patent protection.

KAZAKHSTAN

Kazakhstan has fulfilled a number of its IPR obligations under the 1992 U.S.-Kazakhstan Trade Agreement. However, some additional steps are required, particularly with respect to copyright protection and enforcement. Currently, Kazakhstan's copyright law does not explicitly incorporate protection for pre-existing works or sound recordings. Although searches and seizures increased in volume and thoroughness in 2003, enforcement of IPR in Kazakhstan remains weak, particularly criminal enforcement. Very few defendants are convicted, and those who are convicted receive only minimal penalties. As a result, piracy is still a major problem. Industry estimated that out of a total of 17.4 million cassettes and 5.8 million CDs that were sold in Kazakhstan in 2003, nearly three-quarters of cassettes and CDs (12.2 million cassettes and 4.1 million CDs) were pirated copies. While new Criminal Code provisions on IPR violations have been adopted, these provisions do not serve as an effective deterrent because the burden of proof in criminal cases is very high and the likelihood of conviction is