The Office of the United States Trade Representative

USTR Reinstates Generalized System of Preferences Benefits for Ukraine

IPR Protection Ranking Improved

WASHINGTON - In recognition of the Government of Ukraine's efforts to improve the enforcement and protection of intellectual property rights, U.S. Trade Representative Rob Portman today announced that the United States will reinstate Generalized System of Preferences (GSP) benefits for Ukraine and lower Ukraine’s designation under Special 301 from Priority Foreign Country to Priority Watch List.

"I commend the Government of Ukraine for its sustained efforts to crack down on copyright piracy and urge the government to continue their efforts," said Ambassador Portman.

In 2001, significant illegal manufacturing of optical media products, such as CDs and DVDs, was occurring in Ukraine. The Office of the U.S. Trade Representative designated Ukraine as a Priority Foreign Country and repeatedly urged Ukraine to take steps to address this problem. In July 2005, Ukraine passed legislation that strengthens its licensing regime and enforcement efforts to stem the illegal production and trade of CDs and DVDs.

"Since the legislation passed, Ukraine has been actively inspecting plants licensed to manufacture optical discs, conducting raids against businesses involved in commercial distribution of IPR-infringing products, and imposing fines against infringers," Portman continued. "We strongly urge Ukraine to keep up these efforts, which reflect positively on the investment environment in Ukraine."



In March 2001, the U.S. Trade Representative designated Ukraine as a Priority Foreign Country under Special 301 (Section 182 of the Trade Act of 1974), and initiated an investigation under Section 301 of the Trade Act of 1974. At that time, Ukraine was the largest producer and exporter of pirated optical media products (CDs and DVDs) in Europe. As a result of the Section 301 investigation, USTR suspended Ukraine’s benefits under the Generalized System of Preferences in August 2001, and in 2002 imposed 100% tariff sanctions on $75 million worth of Ukrainian exports. The latter sanctions were removed on August 31, 2005, after extensive efforts by the Ukrainian Government to pass important amendments to Ukraine’s Laser-Readable Disk Law.

The Administration concluded a Special 301 Out-of-Cycle Review (OCR) of Ukraine in January 2006, which focused on Ukraine’s IPR enforcement, and considered Ukraine’s status as a Priority Foreign Country and its eligibility for Generalized System of Preferences benefits. Ukraine has further agreed to work with the U.S. Government and with the U.S. copyright industry to monitor the progress of future enforcement efforts through an Enforcement Cooperation Group. USTR will continue to monitor developments in the protection of intellectual property rights in Ukraine pursuant to Section 306 of the Trade Act of 1974.

The purpose of the GSP program is to promote economic growth in the developing world by providing preferential duty-free treatment for 3,400 products from nearly 140 designated beneficiary countries and territories. Ukrainian exports to the United States that could benefit the most from Ukraine’s restored GSP eligibility include manufactured items such as iron or steel articles, electrical and railway products, snow skis, protein products such as casein, and certain mineral and metal products.