Ukraine has been named as a Priority Foreign Country (PFC) under the US’s ‘Special 301’ statute following the severe deterioration of enforcement in the areas of government use of pirated software and piracy over the Internet, as well as denial of fair and equitable market access through the authorisation and operation of copyright collecting societies.

The action is contained in the Office of the United States Trade Representative (USTR) released its annual Special 301 Report on the adequacy and effectiveness of US trading partners’ protection and enforcement of intellectual property rights (IPR) and market access for persons that rely on IPR protection. Other significant actions in this year’s report include:

• USTR reports grave concerns about misappropriation of trade secrets in China, and incremental progress on a few of China’s many other significant IPR and market access challenges;

• USTR adds Barbados, Bulgaria, Paraguay, and Trinidad and Tobago to the Watch List as a result of specific problems identified in the report;

• USTR announces that while El Salvador and Spain are not listed in the Report, USTR will conduct out-of-cycle reviews to assess progress on IPR challenges identified in this year’s reviews of those countries;

• Canada moves from the Special 301 Priority Watch List to the Watch List in recognition of significant progress on copyright issues, while USTR continues to work with Canada to address several remaining IPR concerns; and

• Brunei Darussalam and Norway move off of the Special 301 Watch List.

“This year’s Special 301 Report demonstrates U.S. resolve to take strong action to support critical jobs and exports in IP-intensive industries,” said Acting US Trade Representative Demetrios Marantis. “I regret that the Government of Ukraine has earned the first new Priority Foreign Country designation in 11 years due to its severely deteriorating climate for IPR protection and market access, and call upon that government to reverse recent backsliding and swiftly resolve the problems identified today. I am encouraged that other countries, notably Canada, have made long-awaited progress on concerns identified in past reports; I hope that Canada will sustain and build upon that progress, and that other listed countries will make similar progress.”

“The actions reflected in this year’s report send a message to all trading partners on the Priority Watch List and the Watch List that the United States is prepared to use the Special 301 process to its full effect, both to recognise positive action and, where necessary and appropriate, to identify deterioration of the IPR protection and enforcement systems that play such a vital role in international trade.”

The Special 301 Report is an annual review of the global state of IPR protection, enforcement, and market access, which USTR conducts pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act.

USTR reviewed 95 trading partners for this year’s Special 301 Report, and placed 41 countries on the Priority Foreign Country, Priority Watch List, or Watch List.

USTR has designated Ukraine as a Priority Foreign Country in this year’s report as a trading partner whose onerous or egregious acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant US products. In addition, Ukraine is not entering into good faith negotiations or making significant progress in bilateral or multilateral negotiations. Trading partners on the Priority Watch List present the most significant concerns regarding insufficient IPR protection or enforcement, or otherwise limited market access for persons relying on intellectual property protection. Ten countries – Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, and Venezuela – are on the Priority Watch List. USTR will seek to engage intensively with these countries, as appropriate, during the coming year.

Thirty trading partners are on the Watch List, also meriting bilateral attention to address underlying IPR problems: Barbados, Belarus, Bolivia, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Israel, Italy, Jamaica, Kuwait, Lebanon, Mexico, Paraguay, Peru, Philippines, Romania, Tajikistan, Trinidad and Tobago, Turkey, Turkmenistan, Uzbekistan, and Vietnam.

The Motion Picture Association of America (MPAA) noted that Spain remains off the watch list and welcomed the efforts of the Spanish Government to enforce copyright protection looking forward to concrete results in the months ahead.

Former Senator Chris Dodd, Chairman and CEO of the MPAA, commended the USTR and Marantis for the report and its documentation of worldwide intellectual property theft and market access barriers.

“The Special 301 report identifies some of the key foreign threats to America’s copyright industries,” Dodd said. “The report offers an important roadmap for improving strong and enforceable intellectual property protections and expanding IUS exports, both of which are vital to the strength of the US economy. We thank Acting US Trade Representative Marantis, the USTR, and the inter-agency team who continue to support job creation in the creative economy.”

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