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 RUSSIA Russia will remain on the Priority Watch List in 2008. The United States will continue to monitor closely Russia's progress on IPR protection and enforcement and to assess implementation of the November 19, 2006 bilateral agreement on intellectual property rights ("IPR Bilateral Agreement").

Piracy and counterfeiting remain major concerns in Russia. The U.S. copyright industries estimate that they lost in excess of $1.4 billion in 2007 due to copyright piracy in Russia. The U.S. copyright industries continued to report that in 2007, Russia's optical disc production capacity was far in excess of domestic demand, with pirated products being produced both for domestic consumption and export. Due to growing broadband penetration and the continued proliferation of pirate websites, the United States remains concerned about Internet piracy in Russia.

In spite of some improvements, weak enforcement against piracy and counterfeiting in Russia remains a serious problem. In 2007, Russian law enforcement authorities initiated raids on optical disc production facilities and retail sites, and investigations of Internet sites. However, prosecutions and adjudications of IP cases remain sporadic and inadequate; there is also a lack of transparency and a failure by courts to impose deterrent penalties for IPR violators.

The United States conducted an Out-of-Cycle Review in 2007 to encourage Russia to implement its commitments in the IPR Bilateral Agreement and evaluate further actions that Russia needs to take to improve protection and enforcement of intellectual property rights. As part of the IPR Bilateral Agreement, Russia has committed to fight optical disc and Internet piracy, protect against unfair commercial use of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products, deter piracy and counterfeiting through criminal penalties, strengthen border enforcement, and bring Russian laws into compliance with WTO and international IPR norms. Russia's implementation of those IPR commitments will be essential to completing the final WTO accession process. While Russia has made some progress in implementation, additional work remains for Russia to fully implement its commitments under the IPR Bilateral Agreement.

Part IV of Russia's Civil Code, which covers IPR, went into effect on January 1, 2008. Russia has pledged in the IPR Bilateral Agreement to ensure that Part IV and its other IPR measures will be fully consistent with the TRIPS Agreement upon Russia's accession to the WTO. Russia has also committed to introduce legislation in the Duma to implement its TRIPS Agreement obligations that will take effect upon Russia's accession. The United States is awaiting additional efforts by Russia in this area.

In addition to the multilateral work to ensure Russia's compliance with the TRIPS Agreement and Russia's other international IPR obligations, the United States continues to work with Russia on the enforcement of IPR and Russia's compliance with its bilateral obligations through the United States – Russia Bilateral Working Group on Intellectual Property Rights. In addition, the United States is reviewing Russia's status as a beneficiary country under the U.S. Generalized System of Preferences (GSP) Program.