U.S. Reinstates Trade Benefits for Ukraine

The United States is reinstating trade benefits Ukraine lost in 2001 for failing to protect intellectual property, particularly computer software and films and music recorded on compact discs and digital versatile discs, USINFO reported.

Citing Ukraine's efforts to improve the enforcement and protection of intellectual property rights (IPR), U.S. Trade Representative Rob Portman announced January 23 that the United States is reinstating Generalized System of Preferences (GSP) benefits for Ukraine and lowering Ukraine's designation under Special 301 from “priority foreign country” to “priority watch list.”

The GSP provides preferential duty-free entry to approximately 3,000 products from designated beneficiary countries and territories. Ukraine's benefits under the GSP were suspended in August 2001, and, in 2002, 100 percent tariff sanctions were imposed on $75 million worth of Ukrainian exports to the United States.

The United States placed these prohibitive tariffs "because of the continued failure of the Ukrainian Parliament to enact legislation cracking down on sound recording and optical media piracy," according to a press release issued by the Office of the United States Trade Representative (USTR) at that time (January 23, 2001). Ukraine was reckoned the largest producer and exporter of pirated optical media products (CDs and DVDs) in Europe, according to the USTR.

The so-called Special 301 provision of U.S. trade law -- the principal U.S. statute for addressing foreign unfair practices -- authorizes measures against U.S. trade partners for failing to protect U.S. patents, copyrights and other intellectual property. Sanctions were applied against Ukraine after it was identified as a “priority foreign country,” the ranking reserved for the worst situations.

In 2004 and 2005, Ukraine was the only country designated a "priority foreign country" in USTR’s annual Special 301 Report .

"I commend the Government of Ukraine for its sustained efforts to crack down on copyright piracy and urge the government to continue their efforts," said Portman in announcing the upgrading of Ukraine’s status.

The USTR statement noted approvingly that Ukraine passed legislation in July 2005 that strengthens its licensing regime and enforcement efforts to stem the illegal production and trade of CDs and DVDs.

"Since the legislation passed, Ukraine has been actively inspecting plants licensed to manufacture optical discs, conducting raids against businesses involved in commercial distribution of IPR-infringing products, and imposing fines against infringers," Portman said. "We strongly urge Ukraine to keep up these efforts, which reflect positively on the investment environment in Ukraine."

The sanctions imposed in 2001 were removed on August 31, 2005, “after extensive efforts by the Ukrainian Government to pass important amendments to Ukraine's Laser-Readable Disk Law,” according to the statement by the USTR.