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07KYIV1888, UKRAINE IPR: ENGAGING LAW ENFORCEMENT ON INTERNET

August 2, 2007

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Reference ID Created Released Classification Origin
07KYIV1888 2007-08-02 14:06 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Kyiv

VZCZCXYZ0011
PP RUEHWEB

DE RUEHKV #1888/01 2141406
ZNR UUUUU ZZH
P 021406Z AUG 07
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 3253
INFO RUEAWJA/DEPT OF JUSTICE WASHDC
RUCPDOC/USDOC WASHDC
RUEHMO/AMEMBASSY MOSCOW 0224
RUEHWR/AMEMBASSY WARSAW 0130
RUEHPG/AMEMBASSY PRAGUE 0008

UNCLAS KYIV 001888 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/TPP/IPE AND EUR/UMB 
STATE PLEASE PASS TO USTR FOR JGROVES/LMOLNAR/PBURKHEAD 
USDOC FOR ITA/MAC/OIPR 
USDOC FOR 4231/ITA/OEENIS/NISD - CLUCYCK 
COMMERCE PLEASE PASS TO USPTO 
 
E.O. 12958: DECL: N/A 
TAGS: ETRD KIPR ECON UP
SUBJECT: UKRAINE IPR: ENGAGING LAW ENFORCEMENT ON INTERNET 
PIRACY, PETRIVKA MARKET 
 
REFS: A) KYIV 449 
 
      B) KYIV 348 
 
SENSITIVE BUT UNCLASSIFIED; NOT FOR INTERNET PUBLICATION. 
 
1. (SBU) Summary: Econ Counselor met on August 1 with 
leaders of the Ministry of Internal Affairs' (MIA) Economic 
Crime Department to push for improved IPR enforcement.  The 
MIA officials expressed a firm commitment to protecting IP 
rights, and described the Ministry's increased enforcement 
efforts since the beginning of the year.  They also 
described other measures, such as a plan to give more power 
to the GOU's IPR Coordination Council.  Econ Counselor 
highlighted Petrivka, Ukraine's largest outdoor market for 
IPR-infringing goods, and internet piracy as areas of 
particular concern, and pushed for more progress.  MIA 
officials described some successes in both areas, although 
contending the problem is too large for law enforcement to 
solve alone.  End Summary. 
 
2. (U) Econ Counselor met on August 1 with Serhiy Chernyh, 
head of the Ministry of Internal Affairs' (MIA) Economic 
Crime Department, to review Ukraine's IPR enforcement 
efforts.  Also present were Ihor Tyhtylo -- deputy head of 
the MIA's Economic Crime Department, Yuriy Shafray -- head 
of the MIA's IPR Division, and Volodymyr Berezan -- deputy 
head of the Ministry's Kyiv office. 
 
MIA Committed to IPR Enforcement... 
----------------------------------- 
 
3. (U) Chernyh described combating IPR crimes as a priority 
for the MIA and said that they had significantly stepped up 
enforcement efforts over the last several years.  Indeed, 
the latest statistics show that 2007 will see continued 
increases in the number of IPR cases filed and of seizures 
(ref A).  There were 753 IPR-related criminal 
investigations in the first half of 2007, already 93% of 
the total from all of 2006 (which in turn were up 68% from 
2005). As a result of the 753 investigations, 348 cases 
went to the courts, 75% of the total 2006 figure (which had 
been up 235% from 2005).  (Note: The number of convictions 
is not yet available.)  The GOU seized 1.02 million pirated 
discs in the first half of 2007, or 78% of the total for 
all of 2006.  The MIA initiated nearly 4,500 administrative 
cases in the first half of 2007, 21% more than during all 
of 2006. 
 
4. (SBU) Econ Counselor praised the GOU for its increased 
efforts, but expressed concern that the MIA was reportedly 
reducing its staff devoted to IPR crimes.  (Note: We have 
heard informally from MIA staff that new leadership at the 
Ministry diverted some resources away from IPR crimes.) 
Chernyh admitted that there had been some restructuring, 
with the goal of creating a more "vertical" structure 
within the IPR Division, but denied that there had been any 
staff reductions.  Tyhtylo noted that the MIA planned to 
strengthen its staff at the local level through additional 
IPR training. 
 
...But Arresting Pirates Not the Only Answer 
-------------------------------------------- 
 
5. (U) The MIA officials described the large profit margins 
involved -- Shafray said that pirated CDs costing $0.20 to 
produce sold for about $2.50 -- as well as strong demand 
from poorer Ukrainians unable to pay for legitimate copies 
made combating piracy particularly difficult.  They 
reiterated previous MIA complaints that Ukrainian courts 
hand down overly lenient sentences, undermining the 
criminal deterrent (ref A).  They noted that over half of 
those convicted receive probation, while the rest are given 
fines or community service.  Chernyh also emphasized the 
importance of public outreach, noting the MIA's practice of 
holding public events to publicize the destruction of 
seized pirated discs. 
 
6. (SBU) Shafray noted that the MIA was pushing for a 
Cabinet of Ministers Resolution to bolster the IPR 
Coordination Council (ref A).  The expected CabMin 
Resolution would empower the Coordination Council to task 
 
various Ministries to take certain actions, rather than 
just coordinate IPR activities.  This, for example, could 
help ensure that licensing (e.g., of outdoor markets) was 
coordinated with IPR enforcement objectives. 
 
Petrivka Market: Some Progress 
------------------------------ 
 
7. (U) Econ Counselor highlighted Kyiv's Petrivka, 
Ukraine's largest outdoor market for IPR-infringing 
material (ref A), as an area of particular concern because 
it lent the impression that piracy is still tolerated. 
Shafray said that efforts to combat piracy at Petrivka were 
ongoing, noting that 175,000 pirated discs (worth 
approximately $495,000) had already been seized at Petrivka 
in 2007.  Berezan added that the Kyiv city administration 
had a separate division to handle IPR violations, and that
 
a special working group was in place to focus on Petrivka. 
After a dip in the numbers in 2004-2005, said Berezan, the 
number of criminal cases initiated against Petrivka 
merchants increased to 84 in 2006, and stood at 76 for the 
first half of 2007.  Twenty three criminal cases had 
already resulted in convictions, and law enforcement had 
also initiated 1,020 administrative cases during the first 
half of the year.  Econ Counselor noted that Poland had 
particular success in pushing market operators to self- 
police, and encouraged the GOU to explore similar tactics. 
 
Internet Piracy 
--------------- 
 
8. (U) Econ Counselor mentioned the recent shutdown of 
allofmp3.com, the infamous Russian pirate website, and 
urged the GOU to be vigilant should elements of 
allofmp3.com seek to relocate to Ukraine.  Shafray thanked 
us for providing information on allofmp3.com, and said the 
MIA was watching the situation closely. 
 
9. (U) Econ Counselor also urged the GOU to tackle its own 
pirate websites and argued that shutting down mp3.ua, 
Ukraine's largest site, would send a strong signal that 
Ukraine is taking the issue seriously.  Shafray described 
internet piracy as a "burning" concern and said that the 
MIA had succeeded in closing down 20 pirate sites so far 
this year.  The MIA's preferred method, he said, was to 
work through Internet Service Providers (ISPs) in shutting 
down illegal sites.  (Note: MIA officials have previously 
told us that they lack the necessary authority to shut down 
pirate sites through the courts (ref B).)  Econ Counselor 
responded that, in order to assist MIA efforts, Post would 
try to relay information from industry regarding which ISPs 
were hosting pirate sites. 
 
Comment: Slow But Steady Wins the Race? 
--------------------------------------- 
 
10. (SBU) Chernyh and team impressed us with their firm 
commitment to combating IPR-related crime.  This meeting 
was nonetheless a useful opportunity to emphasize the 
importance of IPR enforcement for the USG, and to push for 
progress on the more troublesome problems of Petrivka 
market and internet piracy.  The MIA appears to be making 
some progress on both fronts, although Post will continue 
to push for a real breakthrough, such as shutting down 
mp3.ua or permanently closing illegal trade at Petrivka. 
 
TAYLOR

Wikileaks

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