BELARUS SPECIAL 301 REVIEW

UNCLAS MINSK 000126 SIPDIS DEPT FOR EEB/IPE BOGER DEPT PLEASE PASS TO USTR FOR CHOE GROVES COMMERCE FOR ITA/MAC/OIPR PETERS SIPDIS E.O. 12958: N/A TAGS: KIPR ETRD ECON BO SUBJECT: BELARUS SPECIAL 301 REVIEW REF: A. STATE 9475 ¶B. 07 Minsk 156 ¶C. 07 Minsk 831 Summary and recommendation -------------- ¶1. Post once again recommends placement of Belarus on the watch list for 2008. Belarus has made modest progress in protecting IPR over the past year. Pirated optical media remains the norm, and is readily available across the country, including in state-owned stores; enforcement was minimal and impeded by deficiencies in Belarusian law. However, sales of licensed software increased. The GOB also supported efforts to raise the awareness of IPR concerns within government bodies and in the private sector. Customs officials increased their vigilance against counterfactual cosmetics and alcohol. In some instances government agencies also reduced their tendency to engage in IPR violations. End summary and recommendation. Notorious Markets -------------- ¶2. The Zdanovichi market stands out as the most notorious market in Minsk for pirated goods, particularly DVDs and CDs. While the scale of Zdanovichi does not match notorious markets in Moscow, scores of stalls sell obviously pirated movies and computer software. Action by the GOB against pirated products at Zdanovichi would serve as a serious public relations move in support of IPR enforcement, although plenty of other outlets for the purchase of pirated goods exist. Optical Media Piracy -------------- ¶3. Optical media piracy remained the single largest type of IPR violation in Belarus during 2007. Pirated optical media is the norm in Belarus. Dozens of kiosks and markets in Minsk and elsewhere in the country openly sell pirated media (software, DVDs and CDs) at prices as low as BYR 9,500 (USD 4.50). Pirated media were routinely sold in state-owned stores. Many movies were available on DVD before they appeared in regional theaters. Several vendors, including the Minsk chain "Misteriya zvuka," purchase DVDs only from Russian companies holding licenses and claimed to sell only licensed media. ¶4. The availability of pirated software and music also persists throughout Belarus. Prices have risen over those reported last year (ref B),with the cheapest pirated software costing BYR 10,000 (USD 4.75). Nonetheless, Microsoft reports increases in sales of licensed software, albeit from a low base. Most of this pirated optical media is believed to be imported from the Moscow region of Russia, with smaller amounts coming from Ukraine. ¶5. Companies engaged in providing outsourced programming services, a burgeoning industry, on the whole utilize licensed software. Microsoft reports that this expanding network of partner companies using licensed software helps increase general awareness of IPR concerns at least in the sphere of information technology (IT). Some small start-up companies still use unlicensed products, however. Use/Procurement of Government Software -------------- ¶6. There is no presidential edict or other regulation requiring government-purchased software to comply with international agreements. Government officials have acknowledged that there is currently no law in Belarus recognizing software copyrights. Software companies hoping to prevent sales of pirated programs in Belarus must make a specific application to the GOB to stop the piracy; post has no evidence of any such application being made during the year. Microsoft soon hopes to conclude a memorandum of understanding with the Ministry of Education. A government official has indicated that the GOB would like to negotiate with Microsoft to establish price structures for purchasing licensed software. The government-sponsored High Tech Park encourages resident companies to use licensed software. Public Performances -------------- ¶7. Belarusian movie theaters reportedly only show licensed films obtained via reputable Moscow-based distributors. Recently Belarusian theaters have begun either securing rights directly from playwrights or paying the Belarusian Authors Association (BAA), which in theory relays royalties to rights holders. On May 10, 2007 the BAA was brought under the auspices of the National Center for Intellectual Property Rights (NCIPR). In practice, authors cannot opt to control the rights to their works independently of the BAA. Musical scores are often used without recognition of the composer, let alone obtaining rights. Government instruction 118, adopted January 28, 2008, provides copyright holders with set compensation if their workers are used on television or radio in Belarus. Whether the instruction is followed in practice remains to be seen. TRIPS Compliance -------------- ¶8. In August 2005, the Council of Ministers passed Decree 871, "Confirming the Position on Interaction of Republican Organs of State Governance and Law Enforcement in the Realm of Intellectual Property;" the decree can be found in Russian at http://pravo.by/webnpa/text_txt.asp?RN=C20500 871. This decree calls for various government organs to cooperatively enforce legislation on IPR protection. Specifically, it calls for joint action by the GOB on studying international IPR norms; conducting joint events and seminars; exchanging information and analysis; and carrying out joint checks for IPR violations. The decree also designates the IPR responsibilities for the Ministries of Architecture and Construction; Internal Affairs; Health; Information; Culture; Education; Industry; Communications; Agriculture; Trade; and Economy; as well as the State Committees on Science and Technology; Customs; Natural Resources, Geodesics and Cartography; Standards and Certifications; and law enforcement bodies. Enforcement -------------- ¶9. According to official GOB statistics, in 2007 Belarusian law enforcement uncovered 54 crimes under Article 201 of Belarus' Criminal Code ("Violation of Authorship, Literary, Invention, and Patent Rights"),and 18 violations of Article 250 ("Disseminating False Information about Goods and Services"). The authorities also found 437 administrative violations, and seized 50,500 units of unlicensed products and 21 metric tons of counterfeit goods worth BYR 504 million (USD 235,000). Raids tended to be aimed at small-scale retailers instead of production facilities. For example, the Vigmaplast optical disc replication plant near Minsk, opened in 2004, continues to operate two lines with a capacity of seven million discs per year. ¶10. Belarusian courts in 2007 tried 35 persons under Article 201. Not surprisingly, all 35 were found guilty. Courts fined 27 persons, sentenced six to corrective labor, one to parole and one to prison. Authorities charged 305 persons with administrative violations. Of those, 283 received fines and one a warning. In 204 cases counterfactual goods were also seized. ¶11. Gosstandart conducted 10 investigations related to suspected audio, video and software piracy in 2007. It found eight violations, resulting in fines of BYR 1.1 million (USD 500). Tax inspectors claimed BYR 62.4 million (USD 29,900) worth of fines and unpaid taxes for IPR-related violations. Customs officials registered 25 audiovisual and software IPR-related violations in 2007, resulting in the seizure of 21,000 items worth and estimated BYR 53 million (USD 25,000). ¶12. Lawyers representing Western firms reported strong cooperation from both the Ministry of Internal Affairs and Customs in enforcing their clients' trademarks. The Ministry of Internal Affairs promptly investigates reported cases of vendors refusing to remove counterfactual products, according to lawyers. Customs also checks whether importers are licensed to sell trademarked items. The open border with Russia, however, keeps Customs enforcement from preventing the importation of many counterfactual goods. ¶13. In addition, GOB law enforcement remained hamstrung by several deficiencies in Belarusian law. First, border officials lacked ex officio authority to seize illegal material and to initiate their own investigations. Second, law enforcement agencies were not permitted to confiscate and destroy equipment used for the manufacture of pirated material. Third, the current anti-circumvention and copyright management information provisions of Belarus' 1998 Copyright Law do not conform to World Intellectual Property Organization (WIPO) digital treaties with respect to the manufacture, importation, sale, distribution, or other trafficking in devices or services that are designed to circumvent technological protection measures. Treaties -------------- ¶14. Belarus has been a WIPO member since 1970 and is a party to all relevant IPR treaties, including the Berne Convention for the Protection of Literary and Artistic Works (1997),the WIPO Copyright Treaty (2002) and the WIPO Performances and Phonograms Treaty (2002),as well as a number of IPR agreements under the framework of the Commonwealth of Independent States. In its response to the 2006 Special 301, the GOB boasted that under Article 20 of Belarus' 2000 law, "On Normative Legal Acts," these international treaties had the "force of law" in Belarus. However, in many cases the GOB appeared unable or unwilling to comply with even the smallest WIPO recommendations. For example, in its 2006 answers to the "Questionnaire on the Implementation of Paragraph 12(a) of WIPO Standard ST.10/C," the NCIPR admitted that it would not conform to the WIPO system of patent application numbering during first filings by the end of that year. Moreover, NCIPR failed to answer questions related to its compliance with said system in certificates of priority. Training -------------- ¶15. Belarusian cooperation with WIPO continued in the area of IPR education and training. In 2007, over 1,000 persons in government, academia and business received training in IPR protection at the Intellectual Property Training Center in Minsk Public Awareness -------------- ¶16. Public awareness of IPR increased, but only modestly, and primarily with respect to IT. The GOB-sponsored High Tech Park organized a September 26-27 conference in Minsk entitled "Computer Programs as Intellectual Property" attended by representatives of several government agencies (ref C). Belpatentservis, a GOB-owned company assisting with patent applications, signed a memorandum of understanding with the U.S. Chamber of Commerce effective through January 2007 to consider cooperation on a website in Belarus dedicated to combating piracy, although no funding for the project was forthcoming. Internet Piracy -------------- ¶17. Internet piracy is not a primary concern in Belarus due to the relatively high cost of internet and the low speed of most connections. A relatively high proportion of Belarusians continue to use CDs, DVDs and even cassette tapes. Comment: Watch List Recommended -------------- ¶18. The high prevalence of piracy in Belarus calls for keeping the country on the Watch List. At the same time, moving Belarus to the Priority Watch List would be unjustified. Awareness of IPR is increasing, sales of licensed goods are increasing, and at least some enforcement efforts are evident. That the Ministry of Education is in negotiations with Microsoft indicates the government is moving to get its own house in order. This is a necessary precondition for average Belarusian citizens to respect IPR. Stewart