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PARAGUAY We commend the significant efforts of the Duarte Administration to improve the protection of intellectual property. For example, the Ministry of Industry and Commerce (MIC) has been cooperating with industry to share data on importers and shipments of optical media. The MIC also now requires importers to provide copies of their sales receipts identifying the buyers. The MIC's documentary requirements have led to the closure of more than 50 importing companies. The MIC created the Specialized Enforcement Unit, which has participated in numerous important seizures. The USTR identified Paraguay as a Priority Foreign Country in January 1998 as part of a Special 301 out-of-cycle review. The subsequent Special 301 investigation terminated with the signing of a comprehensive Memorandum of Understanding (MOU) on the protection of intellectual property in 1998. After that MOU expired, the U.S. and Paraguay signed a new MOU in March 2004, which will terminate on December 31, 2005. Paraguay has been under Section 306 monitoring since the signing of the 1998 MOU, and in 2005 the United States will continue to monitor Paraguay under Section 306. Paraguay continues, however, to have problems providing effective protection to copyrights and trademarks, with respect to internal enforcement, border enforcement and low penalties in the current laws. We remain concerned over several issues, including: persistent problems with enforcement due to porous borders; the involvement of organized crime in piracy and counterfeiting operations; ineffective prosecutions for IPR infringements; and the lack of consistent deterrent sentences, including imprisonment, in court cases. The United States also has concerns regarding data protection and a 2004 patent resolution, and will continue to work with Paraguay to address these IPR concerns.