Ukraine Faces Call for US Trade Sanctions over Online Piracy

The International Intellectual Property Alliance (IIPA) is recommending that the U.S. Government should suspend Ukraine’s GSP trade benefits, claiming that the country doesn’t do enough to protect the interests of copyright holders.

Last year Ukraine enjoyed $53.7 million in unilateral duty-free benefits in the US, while US companies suffering millions of dollars in losses in Ukraine due to online piracy, they argue.

The IIPA, which includes a wide range of copyright groups including the MPAA, RIAA, BSA and ESA, characterizes the country as a safe harbor for pirate sites. While physical piracy was properly addressed ten years ago after a previous sanction, digital piracy remains rampant.

One of the main problems is that local hosting companies are offering their services to a wide variety of copyright-infringing websites. Without proper enforcement, more and more websites have moved their services there.

“By allowing these problems to fester for years, weak digital enforcement has resulted in an exponential increase in the number of illegal peer-to-peer (‘P2P’) hosting and website-based Internet piracy sites, including some of the world’s largest BitTorrent sites located in Ukraine,” IIPA writes.

“Some Internet pirates have purposefully moved their servers and operations to Ukraine in the past few years to take advantage of the current lawless situation. Many of these illegal services and sites target audiences throughout Europe and the United States.”

The copyright holders highlight the defunct ExtraTorrent site as an example but note that there are also many other torrent sites, pirate streaming sites, cyberlockers, and linking sites in Ukraine.

While pirate sites are hosted all over the world, the problem is particularly persistent in Ukraine because many local hosting companies fail to process takedown requests. This, despite repeated calls from copyright holders to work with them.

“Many of the websites offering pirated copyright materials are thriving in part because of the support of local ISPs,” IIPA writes.

“The copyright industries have, for years, sought private agreements with ISPs to establish effective mechanisms to take down illegal websites and slow illegal P2P traffic. In the absence of legislation, however, these voluntary efforts have generally not succeeded, although, some ISPs will delete links upon request.”

In order to make real progress, the copyright holders call for new legislation to hold Internet services accountable and to make it easier to come after pirate sites that are hosted in Ukraine.

“Legislation is needed to institute proper notice and takedown provisions, including a requirement that service providers terminate access to individuals (or entities) that have repeatedly engaged in infringement, and the retention of information for law enforcement, as well as to provide clear third party liability regarding ISPs.”

In addition to addressing online piracy, IIPA further points out that the collecting societies in Ukraine are not functioning properly. At the moment there are 18 active and competing organizations, creating a chaotic situation where rightsholders are not properly rewarded, they suggest.

IIPA recommends that the U.S. Government accepts its petition and suspends or withdraws Ukraine’s benefits until the country takes proper action.

Ukraine’s Government, for its part, informs the US Government that progress is being made. There are already several new laws in the works to improve intellectual property protection. The issue is one of the Government’s “key priorities,” they state, hoping to avert any sanctions.

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IIPA’s full submission to the US Trade Representative is available here (pdf).

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