REPLACEMENT CABLE: SPECIAL 301 REVIEW: KEEP GOU ON

UNCLAS SECTION 01 OF 02 TASHKENT 000304

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR SCA/CEN

E.O. 12958: N/A
TAGS: ECON ETRD KIPR UZ
SUBJECT: REPLACEMENT CABLE: SPECIAL 301 REVIEW: KEEP GOU ON
WATCH LIST

REF: STATE 7944

SENSITIVE BUT UNCLASSIFIED--PLEASE PROTECT ACCORDINGLY.


1. This is the replacement cable for Tashkent 292.


2. (SBU) Summary: Post has seen legislative, but not
enforcement, progress on Uzbekistan's Intellectual Property
Rights (IPR) regime in 2006. The government adopted the "Law
on Copyright and Related Rights" in July, which adheres to
international conventions and the World Trade Organization
(WTO) Trade Related Aspects of Intellectual Property Rights
(TRIPS) agreement. Uzbekistan adhered to the Berne
Convention in 2005, but still holds a reservation to its
accession regarding Article 18. Post agrees with the
International Intellectual Property Alliance's (IIPA)
criticisms of the GOU's lack of enforcement of the IPR regime
and agrees that Uzbekistan should stay on the Special 301
watch list. However, Post does not believe that revoking
General System of Preferences (GSP) privileges will lead to
further progress. End summary.



COPYRIGHT CODE: LEGISLATIVE STRIDES
--------------


3. (SBU) The GOU finally adopted The "Law on Copyright and
Related Rights," which took effect in July, 2006. Developed
in accordance with WTO requirements and standards, the law
gives comprehensive definitions of terms, in addition to
addressing collective rights management and compulsory
licensing. The new version of the copyright law provides for
extended rights in accordance with the Berne and Rome
Conventions to the producers of phonograms, foreign and Uzbek
authors, performers and subjects of related rights. In 2005,
Uzbekistan agreed to the Berne Convention, but made a
reservation to its accession regarding Article 18. This
reservation continues. (Note: Article 18 protects pre
existing works from the U.S. and all other Berne countries.
End note.)


4. (SBU) The most vague and problematic aspect of the new law
is its planned implementation. The GOU still must make
numerous amendments to legal documents and delegate
enforcement to a government agency. The enactment of the law
is a positive development, as it creates a legal basis for
intellectual property rights. It remains to be seen,
however, how the law will be implemented.

CRIMINAL AND CUSTOMS CODE CHANGES: "WE'RE WORKING ON IT"
-------------- --------------


5. (SBU) Amendments to the Criminal Code affecting IPR were
proposed in 2004, but the Parliament has not officially
reviewed the draft law on changes to the legislation on IPR
enforcement.


6. (SBU) The draft Customs Code still has not been submitted
to the WTO and it appears the Uzbeks are marking time. In
both 2005 and 2006, the GOU said the new edition of the
Customs Code would be adopted in 2006 and 2007 respectively.

ENFORCEMENT: NOT GOOD ENOUGH
--------------


7. (SBU) Uzbekistan is a poor country and despite GDP growth
officially reported around seven percent in 2006, poverty
figures have not improved, meaning that fewer people can
afford basic goods, let alone pirated goods. The GOU, in
order to restrict illicit trade and increase tax collection,
conducted a few raids in 2006 on retailers of optical disks
(music and computer CDs and DVDs) and videotapes. The Uzbek
Copyright Agency, in association with Microsoft's office in
Tashkent and the United Nations Development Program, held two
seminars for law enforcement agencies to discuss intellectual
property rights. Despite these actions, pirated music CDs,
cassettes, movies and computer software are still readily
available, at least in the capital, for approximately
$3.20-5.60 (4,000-7,000 soum). The majority of the black
market goods come from Ukraine and Russia, although an
increasing number of CDs come from Kazakhstan.

RESPONSE TO IIPA and IFPI: A REPEATING RECORD OF DELAYS
-------------- --------------


TASHKENT 00000304 002 OF 002



8. (SBU) Post agrees with IIPA's findings of problems in
Uzbekistan's enforcement to protect intellectual property
rights. A prerequisite for fixing these problems is
engagement with the GOU. The U.S.-Uzbekistan bilateral
relationship deteriorated significantly following the May
2005 events in Andijon. Subsequently, the GOU has stopped
cooperation in many areas and is currently unwilling to
fruitfully engage with Post on IPR and WTO accession issues.


9. (SBU) Uzbekistan's problem with copyright piracy is with
the sale of pirated goods; not with production. Post
strongly disagrees with the International Federation of the
Phonographic Industry's (IFPI) estimate of losses due to
music piracy of USD 30 million. This does not take into
account the fact that very few Uzbeks, earning an average of
USD 50/month, could or would actually purchase a legal copy
of a CD. It is very possible that the U.S. music, video and
computer software industry suffers limited loss from sales of
pirated music, videos and computer programs in Uzbekistan, as
per capita income is too low to support purchases of legal
IPR products.

KEEP GOU ON WATCH LIST; MAINTAIN GSP PRIVILEGES
-------------- ---


10. (SBU) There is no denying that the GOU has a long way to
go to be in compliance with all WTO TRIPS requirements.
However, the WTO advisor program has made effective progress
in stimulating change within the GOU IPR regime. We should
allow time to review the impact of the new legislation before
imposing further penalties on Uzbekistan for lack of IPR
protection.


11. (SBU) Although we agree with IIPA that the GOU should
remain on the Special 301 Watch List, Post believes that
eliminating Uzbekistan's GSP privileges, as recommended by
IIPA, would be counterproductive at this time. Rather than
taking this step, Post believes we need to continue to engage
the GOU through the WTO process.
PURNELL