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 U.S. copyright industry reports that Kuwait continues to have high levels of retail optical disc piracy, as well as problems with business software piracy, cable piracy, and Internet piracy. The United States hopes that key ministries with IPR enforcement responsibilities will continue to build upon the progress of 2005, in order to reduce piracy and counterfeiting rates. The United States will continue to address these issues under the United States-Kuwait Trade and Investment Framework Agreement signed in February 2004.

LATVIA Latvia will remain on the Watch List in 2006, and the United States will conduct an Out-of-Cycle Review to monitor further progress on Latvia's enforcement activities. Latvia has improved IPR enforcement during the past year by promoting coordination among ministries responsible for IPR enforcement, increasing resources to combat IPR piracy and counterfeiting, forming a high-level IPR working groups to focus on enforcement, and adopting a new criminal procedure code on IPR enforcement issues, among other initiatives. In addition, the Ministry of Interior established an IPR crime unit that has conducted numerous raids, seized infringing products, and referred cases for prosecution. There has been an increase in the number of IPR infringers who have been prosecuted and sentenced, although the United States encourages Latvia to ensure that its courts issue stronger penalties for IPR infringers that include deterrent fines and jail sentences. However, some key IPR issues remain in need of attention, including copyright piracy, especially on the Internet, and the lack of effective border enforcement. The United States encourages Latvian customs officials to take increased action to inspect and seize transshipped pirated and counterfeit goods coming into Latvia from Russia and exported to Lithuania, Poland, and other EU countries. The United States notes that Latvian Customs officials have increasingly used their ex officio authority this past year to combat the flow of pirated and counterfeit goods into Latvia. Through the Out-of-Cycle Review, the United States will work together with Latvia to build upon its recent progress to improve its IPR regime.

LITHUANIA Lithuania will remain on the Watch List in 2006. Despite some IPR improvements this past year, numerous IPR issues remain, including copyright piracy on the Internet and transshipment of pirated optical media through Lithuania. The United States encourages Lithuania to implement optical media rules that effectively regulate the production, distribution, and export of optical media, particularly as border enforcement remains a serious problem, with Lithuania serving as a central transshipment point in the Baltic region for mostly Russian-produced optical media to the rest of Europe. The United States urges Lithuanian customs officials to make more frequent use of their ex officio authority to inspect and seize infringing goods at the border. The United States also encourages Lithuania to direct its attention and resources to increasing its anti-piracy and anti-counterfeiting efforts by coordinating IPR enforcement efforts among relevant government ministries, police, and customs officials.

MALAYSIA Malaysia will remain on the Watch List in 2006 to monitor its efforts to improve its IPR regime. Malaysia made some significant improvements in IPR protection and enforcement this past year, but still has some serious deficiencies. IPR enforcement improvements during the past year have included: conducting raids against pirate optical disc production facilities; seizing pirate goods and machinery used to produce pirate materials; arresting IPR infringers; and revoking or