UKRAINE: GOU TELLS A/S WAYNE OF CONTINUED IPR

UNCLAS SECTION 01 OF 03 KIEV 000346

SIPDIS

DEPT PLEASE PASS TO USTR FOR KLEIN/MOLNAR/GROVES
USDOC FOR 4201/DOC/ITA/MAC/BISNIS
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYCK

SENSITIVE

E.O.: 12958: N/A
TAGS: ECON KIPR ETRD UP
SUBJECT: UKRAINE: GOU TELLS A/S WAYNE OF CONTINUED IPR
ENFORCEMENT EFFORTS

REFS: A) KIEV 7, B) 2005 KIEV 2650

Sensitive but unclassified. Not for Internet distribution.
Please handle accordingly.


1. (U) SUMMARY: Assistant Secretary of State for Economic
and Business Affairs E. Anthony Wayne met on January 24 with
Acting Minister of Education and Science Borys Zhebrovskiy
and other GOU officials involved in intellectual property
(IPR) rights protection. A/S Wayne told the officials that,
in recognition of improvements in Ukraine's IPR protection
regime, USTR had decided to restore GSP benefits and to
improve Ukraine's ranking on IPR under the Special 301
provisions of U.S. Trade Law. He encouraged the GOU to
enhance enforcement measures and applauded the GOU's
agreement to take part in a new "Enforcement Cooperation
Group" including representatives of the private sector. The
GOU officials reported on recent enforcement efforts --
including 115 new criminal cases based on new optical disc
(OD) legislation passed in July -- as well as plans and
training needs for the future. The Acting Minister asked
that the USG help encourage Ukraine's Foreign Ministry to
complete work on extending the bilateral Science and
Technology Agreement. END SUMMARY.


2. (U) Present at the 40-minute meeting at the Ministry of
Education and Science (MES) were Acting Minister Zhebrovskiy
(whose portfolio as First Deputy Minister includes IPR
issues),the Ministry's Press Secretary, and head of its
international affairs division, as well as Valentyn
Chebotariov, Deputy Chairman of the State Department of
Intellectual Property (SDIP),which is under the MES's
purview, and Serhiy Lebid, Deputy Head of the Economic Crime
Department (and head of the IPR Unit within that Department)
of the Ministry of Internal Affairs. Accompanying A/S Wayne
were officials from the Department of Commerce, EB/IFD/OMA,
and Post.

Good News from USTR
--------------


3. (SBU) A/S Wayne called attention to the fact that USTR
had the day before announced Ambassador Portman's decision
following the conclusion of a Special 301 out-of-cycle
review (OCR) to restore GSP benefits and to redesignate
Ukraine from the Priority Foreign Country category to the
Priority Watch List. He gave Zhebrovskiy a copy of the USTR
press release on the topic translated into Ukrainian.
Congratulating the GOU for passing the OD measure in August,
A/S Wayne said the U.S. was pleased the GOU had also agreed
to ongoing consultation between government and industry on
IPR enforcement. (Ref A reports on the GOU agreement to
create the Enforcement Cooperation Group.) A/S Wayne noted
that the USTR decision could open new opportunities for
Ukraine's exports to the U.S. and would certainly send a
signal to companies in the U.S. that the business climate in
Ukraine had improved with regard to IPR protection.


4. (SBU) Acting Minister Zhebrovskiy said he was pleased
that the GOU's efforts to fulfill all of the obligations of
the bilateral IPR Joint Action Plan established in 2002 had
brought positive results. He noted that he had been at the
Rada (parliament) during the dramatic and contentious
session that ended in the passage of the OD amendments (ref
B). It was very important for Ukraine's economy and its
citizens to have these results at this time. The U.S. move
was proof, he said, that the GOU's efforts at democratic
reforms paid off. (Note: Zhebrovskiy did not disguise that
he was a member of President Yushchenko's Our Ukraine Party,
and stopped just short of commenting on the political use
that party may make of the U.S. decision.)

SDIP's Plans to Improve IPR Protection
--------------


5. (SBU) Chebotariov of the SDIP agreed that this was an
important step. He recalled that the GOU had begun its
close cooperation with the U.S. in 2001 with the Joint
Action Plan. The five intervening years had not been
wasted. "Frankly," he said, "I believe that the U.S.
sanctions and other actions were instrumental in bringing
change to the government's approach to IPR issues."
(Zhebrovskiy joked that this should not be taken to mean
that the GOU needed more sanctions.) Chebotariov added that
the GOU's legislative base was now sound.


6. (SBU) Chebotariov then described the GOU's priorities in
improving IPR enforcement. The GOU would soon take steps to
harmonize existing legislation and to coordinate better the
work of the various agencies charged with enforcement.
There had been progress in the Customs Service, Chebotariov
remarked. Although Ukraine's "northern neighbor" sent large
amounts of pirated optical discs to Ukraine, the Ministry of
Internal Affairs and the SDIP were working together to stem
the flow. There were 29 special customs points where IPR-
trained officers worked. Chebotariov said the SDIP was able
to prevent pirate production of ODs in Ukraine; there was
constant monitoring of the OD manufacturing plants. For the
SDIP a main priority was now to ensure that copyrights were
observed by other users, such as broadcast media,
restaurants, bars, and casinos. There had been no
achievements yet in this area, but the SDIP had been
developing plans.


7. (SBU) Training was another priority for the SDIP,
Chebotariov said. There had been problems several years ago
when the first IPR cases were brought to courts that were
not prepared to hear them. Now there were some experts
working with the courts, but more experts were needed.
Finally, Chebotariov said the SDIP saw a need for public
outreach, so that citizens learned the importance of IPR
protection. SDIP inspectors would work with the media to
inform the public of the existence of copyright laws and of
how to alert authorities of copyright infringements.

Internal Affairs Engaged on Enforcement
--------------


8. (SBU) Lebid, head of the Ministry of Internal Affairs'
(MIA) IP unit said that the passage of the OD amendments in
July 2005 had made a tremendous difference in enforcement.
In the two years prior to passage there had been zero
criminal cases filed for illegal trading in optical discs.
In the three months since enactment there had been 115 cases
filed. Over the last year there had been a total of 400
criminal cases filed regarding infringement of copyright and
neighboring rights. This, he said, did not indicate that
the number of violations was increasing, but that law
enforcement was getting better at catching violators.


9. (SBU) Lebid stressed that the GOU was not resting on its
laurels. One week earlier, the MIA and MES had persuaded
the Rada to pass in the first reading changes to the
criminal code stiffening penalties for IPR violations by
organized crime groups. This draft law had met with
opposition in the Rada, but, he said, the public's approval
of the measure had led to passage. Zhebrovskiy interjected
that the U.S. press release on Special 301 would help with
passage of further measures and asked if the Ministry could
publicize the U.S. notice. (Note: The draft, No. 8068,
amends the Criminal Code to lower the threshold for criminal
liability and strengthen the penalties for violations
related to other copyrighted products -- including software,
data bases, cassette tapes, etc. -- while the August 2005
amendments had applied only to optical discs.)


10. (SBU) A/S Wayne responded that it was encouraging that
the GOU had been able to take swift enforcement action soon
after passage of the OD amendments. He said that the
enforcement effort was a difficult, never-ending enterprise,
even for the U.S. He concurred with the priorities of
public education and training. He noted that the U.S. had
provided some IPR training in the past and suggested that
the discussions in the Enforcement Cooperation Group (ECG)
may lead to other such opportunities. He underlined the
importance of learning from industry in the ECG, and pointed
out that the private sector was able to share experience and
best practices from other parts of the world. He suggested
that the launching of the ECG (note: anticipated for
February) be accompanied by publicity. He told Zhebrovskiy
he could publicize the U.S. press release but encouraged the
GOU to draft its own version stressing the importance of IPR
protection to Ukraine's own creative professions such as
scientists, artists, and inventors.

Science and Technology Agreement
--------------


11. (SBU) Zhebrovskiy closed the meeting by asking the U.S.
side to persuade Ukraine's Foreign Ministry to complete work
on extending the bilateral Science and Technology Agreement.
He noted that his Ministry had already supplied its comments
to the MFA, but that the document seemed to have gotten
bogged down bureaucratically.


12. (U) A/S Wayne has cleared this message.
HERBST