Provided they have protection from Ukrainian pirates
“The imposetion or not of trade sanctions against Ukraine is contingent on fast enactment of legislation against media piracy,” US Ambassador to Ukraine Carlos Pascual declared. In his opinion, oversight agencies in Ukraine have too little power to effectively curb the illegal production of compact discs (Ukrainian entrepreneurs take a different view of the amount of authority our domestic agencies have — Ed.). Recall that on August 7 of this year the US government imposed a so-called prohibitive tax against a large group of Ukrainian goods, notably, products of the steel, chemical, and textile industries, which constitute the bulk of Ukrainian export to the world’s richest country. The reason for Washington’s harsh reaction was Ukraine’s inadequate efforts to suppress pirate production of audio and video tapes as well as CDs. Last month, however, the United States decided to postpone its sanctions, pending consideration by Verkhovna Rada of a bill to combat piracy.
“The bill already submitted to lawmakers will make it possible to solve many problems in fighting pirates. We need clear guarantees that piracy will be done away with,” Ambassador Pascual said. He said that several US recording companies have reserved funds to invest in CD production in Ukraine and are awaiting enactment of the bill. In their view, a licensed CD, with all taxes paid, will cost between 15 and 20 hryvnias, or double the price of a forged one. Carlos Pascual also noted that Ukrainian printing companies are expected to get more orders as foreign investors will supply CD covers printed only in Ukrainian.
US government experts say that nearly 40 million illegal CDs were made in Ukraine last year, a record high for Europe, with the total losses inflicted by Ukrainian pirates on the US economy estimated at $200 million. According to Ukrainian government official statistics, 89% of computer software is sold under the table. In the first six months of 2001, there were 3880 legal violations involving the illegal production and sale of copyrighted goods, Presidential Administration experts say. This means that twenty-one illegal makers or traders are detained by the police every day. The US ambassador emphasized that Ukraine has done much in the last several months to legalize this lucrative market. But if the anti-piracy bill is not approved in the near future, trade sanctions will be inevitable, he predicted.
In the first case, according to the ambassador, the departments of the Ministry of Internal Affairs dealing with the illegal production of CDs should be given more authority. The checks done by the ministry have shown that illegal production took place at Ukraine’s large enterprises and police must be authorized to carry out permanent oversight of these enterprises, Carlos Pascual said. Incidentally, head of the State Committee for the Development of Entrepreneurship Oleksandra Kuzhel has said earlier that fourteen CD plants were forced to phase out production due to incessant checks by oversight bodies, with several manufacturers dismantling their equipment and moving it over to Russia where control is not so stringent.
In general, the US ambassador pointed to the lack of accepted standards for customers and sellers, with the former ready to buy inferior quality goods and the latter trying to bend the established rules of fair play on the market. Time is the best healer, Mr. Pascual is convinced, provided the anti-piracy bill is enacted. If not, trade sanctions might be inevitable.
