Page:Special 301 Report 2009.pdf/9

 Stronger and more effective criminal and border enforcement is required to stop the manufacture, import, export, transit, and distribution of pirated and counterfeit goods. Through bilateral consultations, FTAs, and international organizations, USTR is working to maximize the deterrent effects of remedies, including stronger penalties and requirements for the seizure and destruction of pirated and counterfeit goods, and the equipment used in their production.

The manufacture and distribution of counterfeit pharmaceuticals is a growing problem that poses special concerns for consumer health and safety. The United States notes its concern with the proliferation of the manufacture of counterfeit pharmaceuticals in Brazil, China, India, Indonesia, and Russia, and the sale and distribution of counterfeit pharmaceuticals in many countries. A significant contributing factor in this problem is the unauthorized use of bulk active pharmaceutical ingredients (APIs) to manufacture counterfeit pharmaceuticals. For instance, in China, domestic chemical manufacturers that produce APIs can avoid regulatory oversight by not declaring that the bulk chemical is intended for use in pharmaceutical products. While China has acknowledged that this loophole must be addressed and has committed to expanding its regulations to control bulk chemicals used as the underlying source of many counterfeit drugs, we continue to urge China to adopt policies that will in fact reduce the manufacture and distribution of unauthorized APIs.

The increased availability of broadband Internet connections around the world has made the Internet an extremely efficient vehicle for disseminating copyright-infringing products. Internet piracy is a significant concern in a number of trading partners, including Canada, China, Greece, Hungary, Korea, Poland, Romania, Russia, Spain, Taiwan, Ukraine, and Vietnam. Unauthorized retransmission of live sports telecasts over the Internet continues to be a problem in many countries, particularly in China. In addition, piracy using new technologies is an emerging problem internationally. For example, U.S. copyright industries report growing problems with piracy using cellular telephones, palm devices, flash drives, and other mobile technologies. In some countries these devices are being pre-loaded with illegal content before they are sold. In addition to piracy of music and films using these new technologies, piracy of ring tones, games, and scanned books also occurs. Countries with significant problems of piracy using these new technologies include China, India, Indonesia, Malaysia, and the Philippines. The United States will work with these governments to combat these increasing problems. The United States urges governments to ratify and implement the WIPO Internet Treaties, which provide for the tools necessary to protect copyrighted works in the digital environment.

Although Internet piracy is rapidly supplanting physical piracy in many markets around the world, production of and trade in pirated optical discs remains a major problem in many parts of the world. In recent years, some countries, such as Brazil, Pakistan, the Philippines, and Ukraine, have made progress toward implementing controls on optical media production. Other countries still need to adopt and implement legislation or improve existing measures to combat illegal optical disc production, including Bangladesh, China, India, Russia, and Thailand, which have not made sufficient progress in this area. The United States continues to urge its trading partners