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 transshipped and transiting through Canada. Canada's weak border measures continue to be a serious concern for IP owners. The United States notes the progress made by Canadian authorities this past year in IPR enforcement, particularly with respect to engaging with the United States and its industry on several IPR initiatives, including active participation in Operation Site Down, an international cooperative law enforcement effort to suppress online piracy. Canada needs to implement legislative changes to provide a stronger border enforcement system by giving its customs officers the authority to seize products suspected of being pirated or counterfeit without the need of a court order. Greater cooperation between Canadian Customs and the Royal Canadian Mounted Police would enhance enforcement, as would the provision of additional resources and training to its customs officers and domestic law enforcement personnel. The United States will use the Out-of-Cycle review to monitor Canada's progress in providing an adequate and effective IPR protection regime that is consistent with its international obligations and its advanced level of economic development, including improved border enforcement, ratification and implementation of the WIPO Internet Treaties, and strong data protection.

CHILE Chile will remain on the Watch List, and the United States will conduct an Out-of-Cycle Review to monitor progress on IPR issues. Issues of substantial concern include the inadequate protection against unfair commercial use of undisclosed test and other data submitted by pharmaceutical companies seeking marketing approval for their products, insufficient coordination between its health and patent authorities to prevent the issuance of marketing approvals for unauthorized patent-infringing copies of pharmaceutical products, continuing copyright piracy and trademark counterfeiting, and the need for greater efforts to meet standards set in the TRIPS Agreement, the United States-Chile Free Trade Agreement (FTA) and other international agreements. The United States notes in particular that Chile has not fully implemented legislation to comply with FTA obligations where the transition periods expired as of January 1, 2006, such as patent term adjustment. The United States is very concerned that Chile continues to grant marketing approval via sanitary approvals to unauthorized copies of patent-infringing pharmaceutical products. In addition, copyright and trademark enforcement must be improved, including the imposition of deterrent penalties in criminal IPR cases. The copyright piracy situation in Chile has not improved since last year, and digital piracy is a growing problem. Significant amendments to Chile's IPR legislation are needed to bring Chile's IPR regime in line with its international and bilateral commitments. The United States will continue to work with Chile, with the expectation of rapid progress on these pressing IPR issues through the implementation of its IPR commitments in the FTA, and will monitor Chile's progress in meeting its commitments through the Out-of-Cycle Review.

COLOMBIA Colombia will remain on the Watch List in 2006. The United States notes some progress made by Colombia toward strengthening its IPR regime, but Colombia still needs to make further improvements by addressing copyright piracy, conducting effective prosecutions, imposing deterrent sentences by courts, and completing other IPR enforcement initiatives. Copyright piracy remains high, with problems reported by the U.S. copyright industry in the areas of optical disc piracy (both CD-R and DVD-R), illegal photocopying of academic textbooks, business software piracy, and entertainment software piracy. Efforts to combat piracy through raids and