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January 26, 2006

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Reference ID Created Released Classification Origin
06KIEV346 2006-01-26 13:22 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Kyiv
This record is a partial extract of the original cable. The full text of the original cable is not available.






E.O.: 12958: N/A 

REFS: A) KIEV 7, B) 2005 KIEV 2650 

Sensitive but unclassified.  Not for Internet distribution. 
Please handle accordingly. 

1. (U) SUMMARY: Assistant Secretary of State for Economic 
and Business Affairs E. Anthony Wayne met on January 24 with 
Acting Minister of Education and Science Borys Zhebrovskiy 
and other GOU officials involved in intellectual property 
(IPR) rights protection.  A/S Wayne told the officials that, 
in recognition of improvements in Ukraine's IPR protection 
regime, USTR had decided to restore GSP benefits and to 
improve Ukraine's ranking on IPR under the Special 301 
provisions of U.S. Trade Law.  He encouraged the GOU to 
enhance enforcement measures and applauded the GOU's 
agreement to take part in a new "Enforcement Cooperation 
Group" including representatives of the private sector.  The 
GOU officials reported on recent enforcement efforts -- 
including 115 new criminal cases based on new optical disc 
(OD) legislation passed in July -- as well as plans and 
training needs for the future.  The Acting Minister asked 
that the USG help encourage Ukraine's Foreign Ministry to 
complete work on extending the bilateral Science and 
Technology Agreement.  END SUMMARY. 

2.  (U) Present at the 40-minute meeting at the Ministry of 
Education and Science (MES) were Acting Minister Zhebrovskiy 
(whose portfolio as First Deputy Minister includes IPR 
issues), the Ministry's Press Secretary, and head of its 
international affairs division, as well as Valentyn 
Chebotariov, Deputy Chairman of the State Department of 
Intellectual Property (SDIP), which is under the MES's 
purview, and Serhiy Lebid, Deputy Head of the Economic Crime 
Department (and head of the IPR Unit within that Department) 
of the Ministry of Internal Affairs.  Accompanying A/S Wayne 
were officials from the Department of Commerce, EB/IFD/OMA, 
and Post. 

Good News from USTR 

3. (SBU) A/S Wayne called attention to the fact that USTR 
had the day before announced Ambassador Portman's decision 
following the conclusion of a Special 301 out-of-cycle 
review (OCR) to restore GSP benefits and to redesignate 
Ukraine from the Priority Foreign Country category to the 
Priority Watch List.  He gave Zhebrovskiy a copy of the USTR 
press release on the topic translated into Ukrainian. 
Congratulating the GOU for passing the OD measure in August, 
A/S Wayne said the U.S. was pleased the GOU had also agreed 
to ongoing consultation between government and industry on 
IPR enforcement.  (Ref A reports on the GOU agreement to 
create the Enforcement Cooperation Group.)  A/S Wayne noted 
that the USTR decision could open new opportunities for 
Ukraine's exports to the U.S. and would certainly send a 
signal to companies in the U.S. that the business climate in 
Ukraine had improved with regard to IPR protection. 

4. (SBU) Acting Minister Zhebrovskiy said he was pleased 
that the GOU's efforts to fulfill all of the obligations of 
the bilateral IPR Joint Action Plan established in 2002 had 
brought positive results.  He noted that he had been at the 
Rada (parliament) during the dramatic and contentious 
session that ended in the passage of the OD amendments (ref 
B).  It was very important for Ukraine's economy and its 
citizens to have these results at this time.  The U.S. move 
was proof, he said, that the GOU's efforts at democratic 
reforms paid off. (Note: Zhebrovskiy did not disguise that 
he was a member of President Yushchenko's Our Ukraine Party, 
and stopped just short of commenting on the political use 
that party may make of the U.S. decision.) 

SDIP's Plans to Improve IPR Protection 

5. (SBU) Chebotariov of the SDIP agreed that this was an 
important step.  He recalled that the GOU had begun its 
close cooperation with the U.S. in 2001 with the Joint 
Action Plan.  The five intervening years had not been 
wasted.  "Frankly," he said, "I believe that the U.S. 
sanctions and other actions were instrumental in bringing 
change to the government's approach to IPR issues." 
(Zhebrovskiy joked that this should not be taken to mean 
that the GOU needed more sanctions.)  Chebotariov added that 
the GOU's legislative base was now sound. 

6. (SBU) Chebotariov then described the GOU's priorities in 
improving IPR enforcement.  The GOU would soon take steps to 
harmonize existing legislation and to coordinate better the 
work of the various agencies charged with enforcement. 
There had been progress in the Customs Service, Chebotariov 
remarked.  Although Ukraine's "northern neighbor" sent large 
amounts of pirated optical discs to Ukraine, the Ministry of 
Internal Affairs and the SDIP were working together to stem 
the flow.  There were 29 special customs points where IPR- 
trained officers worked.  Chebotariov said the SDIP was able 
to prevent pirate production of ODs in Ukraine; there was 
constant monitoring of the OD manufacturing plants.  For the 
SDIP a main priority was now to ensure that copyrights were 
observed by other users, such as
 broadcast media, 
restaurants, bars, and casinos.  There had been no 
achievements yet in this area, but the SDIP had been 
developing plans. 

7. (SBU) Training was another priority for the SDIP, 
Chebotariov said.  There had been problems several years ago 
when the first IPR cases were brought to courts that were 
not prepared to hear them.  Now there were some experts 
working with the courts, but more experts were needed. 
Finally, Chebotariov said the SDIP saw a need for public 
outreach, so that citizens learned the importance of IPR 
protection.  SDIP inspectors would work with the media to 
inform the public of the existence of copyright laws and of 
how to alert authorities of copyright infringements. 

Internal Affairs Engaged on Enforcement 

8. (SBU) Lebid, head of the Ministry of Internal Affairs' 
(MIA) IP unit said that the passage of the OD amendments in 
July 2005 had made a tremendous difference in enforcement. 
In the two years prior to passage there had been zero 
criminal cases filed for illegal trading in optical discs. 
In the three months since enactment there had been 115 cases 
filed.  Over the last year there had been a total of 400 
criminal cases filed regarding infringement of copyright and 
neighboring rights.  This, he said, did not indicate that 
the number of violations was increasing, but that law 
enforcement was getting better at catching violators. 

9. (SBU) Lebid stressed that the GOU was not resting on its 
laurels.  One week earlier, the MIA and MES had persuaded 
the Rada to pass in the first reading changes to the 
criminal code stiffening penalties for IPR violations by 
organized crime groups.  This draft law had met with 
opposition in the Rada, but, he said, the public's approval 
of the measure had led to passage.  Zhebrovskiy interjected 
that the U.S. press release on Special 301 would help with 
passage of further measures and asked if the Ministry could 
publicize the U.S. notice. (Note: The draft, No. 8068, 
amends the Criminal Code to lower the threshold for criminal 
liability and strengthen the penalties for violations 
related to other copyrighted products -- including software, 
data bases, cassette tapes, etc. -- while the August 2005 
amendments had applied only to optical discs.) 

10. (SBU) A/S Wayne responded that it was encouraging that 
the GOU had been able to take swift enforcement action soon 
after passage of the OD amendments.  He said that the 
enforcement effort was a difficult, never-ending enterprise, 
even for the U.S.  He concurred with the priorities of 
public education and training.  He noted that the U.S. had 
provided some IPR training in the past and suggested that 
the discussions in the Enforcement Cooperation Group (ECG) 
may lead to other such opportunities.  He underlined the 
importance of learning from industry in the ECG, and pointed 
out that the private sector was able to share experience and 
best practices from other parts of the world.  He suggested 
that the launching of the ECG (note: anticipated for 
February) be accompanied by publicity.  He told Zhebrovskiy 
he could publicize the U.S. press release but encouraged the 
GOU to draft its own version stressing the importance of IPR 
protection to Ukraine's own creative professions such as 
scientists, artists, and inventors. 

Science and Technology Agreement 

11. (SBU) Zhebrovskiy closed the meeting by asking the U.S. 
side to persuade Ukraine's Foreign Ministry to complete work 
on extending the bilateral Science and Technology Agreement. 
He noted that his Ministry had already supplied its comments 
to the MFA, but that the document seemed to have gotten 
bogged down bureaucratically. 

12. (U) A/S Wayne has cleared this message. 



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