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 against the unauthorized camcording of motion pictures in theaters. Prior to 2011, Mexican customs authorities and the Attorney General's Office worked jointly to intercept and prosecute transshipments of counterfeit and pirated goods. Following a shift in policy, however, Mexican authorities now only take action against transshipments of suspected infringing goods if there is evidence of "intent for commercial gain" in Mexican territory, which is very difficult to prove. The United States strongly urges Mexico to revert to the previous policy that allowed for the interception of potentially dangerous counterfeit trademark goods in transit to the United States and other countries. The United States looks forward to continuing to work with Mexico to address these and other issues, including through the TPP negotiations.

Paraguay

Paraguay remains on the Watch List in 2014. In addition, the United States continues to monitor Paraguay under Section 306. The Government of Paraguay has taken positive steps toward strengthening IPR, particularly since President Cartes took office in August 2013. On October 10, 2013, President Cartes signed the implementing regulation (Decree 460) for Law 4798 of 2012 that created the National Directorate of Intellectual Property (DINAPI). DINAPI is now the Paraguayan government authority responsible for the issuance and protection of copyrights, trademarks, patents, industrial designs, and geographical indications. Additionally, the law authorizes DINAPI's enforcement arm, the General Enforcement Directorate, to conduct administrative investigations and initiate proceedings at customs checkpoints and businesses. Decree 460 also mandates the creation of a National IPR Policy, which has yet to be drafted. In December 2013, DINAPI granted pharmaceutical patents to two U.S. companies, the first patents reportedly granted since 2005. DINAPI has also undertaken outreach to the public, signed inter-institutional cooperative agreements to improve IPR protection and enforcement, and has stepped up enforcement operations, including at the border. The United States looks forward to working constructively with Paraguay to address enforcement and other challenges, and to conclude negotiations re-launched in March 2014 on a bilateral IPR Memorandum of Understanding (MOU). Upon successful conclusion of the MOU, USTR will initiate an Out-of-Cycle Review to remove Paraguay from the Watch List.

Peru

Peru remains on the Watch List in 2014. The United States remains concerned about the widespread availability of counterfeit and pirated products in Peru. The United States urges Peru to devote additional resources for IPR enforcement, improve coordination among enforcement agencies, enhance its border controls, and strengthen its judicial system. The United States encourages Peru to coordinate enforcement and pursue prosecutions under the law that criminalizes the sale of counterfeit medicines. In addition, the United States urges Peru to take steps to implement its obligations under the United States-Peru Trade Promotion Agreement regarding the prevention of government use of unlicensed software, and likewise urges steps to implement obligations with respect to protections against piracy over the Internet, which continues to be a growing problem. Peru also needs to clarify its protections for biotechnologically-derived pharmaceutical products. The United States looks forward to 55