Identification of Ukraine as a Priority Foreign Country and Initiation of Section 301 Investigation, 33886-33888 [2013-13307]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 78, Number 108 (Wednesday, June 5, 2013)]
[Notices]
[Pages 33886-33888]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13307]



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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. USTR-2013-0023]


Identification of Ukraine as a Priority Foreign Country and 
Initiation of Section 301 Investigation

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of identification of priority foreign country; 
initiation of investigation; proposed determination; request for 
written comment; and invitation to participate in public hearing.

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SUMMARY: Pursuant to section 182(c)(1)(B) of the Trade Act of 1974, as 
amended (the Trade Act), in the May 1, 2013 Special 301 Report the 
United States Trade Representative (Trade Representative) identified 
Ukraine as a priority foreign country due to Ukraine's denial of 
adequate and effective protection of intellectual property rights and 
its denial of fair and equitable market access to persons that rely on 
intellectual property protection. Pursuant to section 302(b)(2) of the 
Trade Act, the Trade Representative is initiating a Section 301 
investigation of the acts, policies, and practices of the Government of 
Ukraine that resulted in the identification of Ukraine as a priority 
foreign country. The Office of the United States Trade Representative 
(USTR) proposes a determination that these acts, policies, and 
practices are actionable under section 301(b). USTR invites interested 
persons to submit written comments and to participate in a public 
hearing concerning the issues covered in the investigation.

DATES: The identification of Ukraine as a priority foreign country was 
made in the May 1, 2013 Special 301 Report. The Trade Representative 
initiated the Section 301 investigation on May 30, 2013. Persons 
wishing to testify orally at the public hearing must provide written 
notification of their intention, as well as a summary of their hearing 
testimony, by June 27, 2013. A written version of hearing testimony is 
due by July 11, 2013. The public hearing will be held on July 18, 2013, 
beginning at 9:30 a.m., at Conference Rooms 1 and 2 at the offices of 
USTR, 1724 F Street NW., Washington, DC 20508. Persons wishing to 
provide written comments and/or rebuttal comments to the hearing 
testimony must do so by July 31, 2013.

ADDRESSES: Notifications of intent to testify, testimony summaries, 
written testimony, and comments should be submitted electronically via 
www.regulations.gov, docket number USTR-2013-0023. If you are unable to 
provide submissions at www.regulations.gov, please contact Gwendolyn 
Diggs, Staff Assistant to the Section 301 Committee, at (202) 395-3150, 
to arrange for an alternative method of transmission.

FOR FURTHER INFORMATION CONTACT: For procedural questions concerning 
submissions, please contact Gwendolyn Diggs at the above number. 
Questions regarding this investigation should be directed as 
appropriate to: Elizabeth Kendall, Director for Intellectual Property 
and Innovation, Office of the United States Trade Representative, at 
(202) 395-3580; Isabella Detwiler, Director for Europe, at (202) 395-
6146; or Shannon Nestor, Assistant General Counsel, at (202) 395-3150. 
General questions regarding Section 301 investigations should be 
directed to William Busis, Deputy Assistant U.S. Trade Representative 
for Monitoring & Enforcement and Chair of the Section 301 Committee, at 
(202) 395-3150. Additional information on the investigation, including 
any changes in the time or location of the public hearing, will be 
posted at www.ustr.gov, under Trade Topics--Enforcement.

SUPPLEMENTARY INFORMATION: 

1. Identification of Ukraine as a Priority Foreign Country

    Section 182 of the Trade Act (19 U.S.C. 2242) authorizes the Trade 
Representative to identify foreign countries that deny adequate and 
effective protection of intellectual property rights (IPR) or that deny 
fair and equitable market access to persons that rely on intellectual 
property (IP) protection. Procedures under section 182 are commonly 
referred to as ``Special 301.'' In making Special 301 determinations, 
USTR chairs an interagency team that reviews information from many 
sources, and that consults with and makes recommendations to the Trade 
Representative on issues arising under Special 301.
    Under section 182(b) of the Trade Act, countries that have the most 
onerous or egregious acts, policies, or practices that have the 
greatest adverse impact (actual or potential) on the relevant United 
States products must be identified as ``priority foreign countries,'' 
unless they are entering into good faith negotiations or are making 
significant progress in bilateral or multilateral negotiations to 
provide adequate and effective protection for IPR and fair and 
equitable market access for persons that rely on IP protection. Section 
182 provides that identification of priority foreign countries shall 
take into account the history of intellectual property laws and 
practices of the foreign country, including any previous 
identifications as a priority foreign country; and the history of 
efforts of the United States to achieve adequate and effective 
protection and enforcement of IPR and fair and equitable market access 
for persons that rely on IP protection.
    In the May 1, 2013 Special 301 Report, the Trade Representative 
identified Ukraine as a priority foreign country. The identification 
was the culmination of several years of growing concern over widespread 
IP theft, including the growing entrenchment of IPR infringement that 
is facilitated by government actors. During intensive bilateral 
engagement, Ukraine had made a series of commitments to make specific 
improvements in the areas of government use of pirated software, 
nontransparent administration of royalty collecting societies, and 
online piracy. Notably, Ukraine and the United States agreed to an IPR 
Action Plan in 2010, which Ukraine publicized in 2011. Implementation 
of this plan was the subject of intensive bilateral engagement in 2012, 
including through the Trade and Investment Council meeting. 
Unfortunately, the situation regarding Ukraine's protection of IPR has 
continued to deteriorate.
    A full discussion of the basis for Ukraine's designation is set out 
in the May 1, 2013 Special 301 Report, which may be found on 
www.ustr.gov under `Reports.' A summary of the basis for identification 
is set out below.
    The first ground for the Trade Representative's identification of 
Ukraine as a priority foreign country is the unfair, nontransparent 
administration of the system for collecting societies, which are 
responsible for collecting and distributing royalties to U.S. and other 
rights holders. Ukraine has recognized that it has a significant 
problem with the operation of illegal or ``rogue'' collecting 
societies, i.e., organizations that collect royalties by falsely 
claiming they are authorized to do so. Such organizations tend to 
operate without adequate transparency and rarely disburse sufficient 
funds that they collect to the rights holders entitled to the 
royalties. The government has not prosecuted several rogue collecting 
societies--even societies that the Government of Ukraine determined 
were collecting money without the necessary authorization.
    Recent negative developments include the following: In May 2012, 
the State Intellectual Property Service of Ukraine revoked the 
authorization of the

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Ukrainian Music Rights League, a collecting society that had disbursed 
royalties to rights holders. In August 2012, a Ukrainian court issued a 
ruling that invalidated Ukraine's procedure for accrediting collecting 
societies. Currently, there are no authorized collecting societies in 
Ukraine in important spheres such as public performance rights.
    Second, there is widespread use of infringing software by Ukrainian 
government agencies. The Government of Ukraine acknowledges that a 
significant percentage of the software used by the government is 
unlicensed. The Government of Ukraine has further acknowledged the need 
for the government to use licensed software, and has issued repeated 
official documents calling for such use as far back as 2002, most 
recently in April 2013. To date, however, the government has not 
addressed this problem. Most recently, the Government of Ukraine 
budgeted 100 million UAH (equivalent to $12.3 million) for 2013 
software licensing in state institutions. However, the Government of 
Ukraine has not disbursed these funds to rights holders or taken any 
other concrete steps toward addressing the use of unlicensed software.
    Third, the Government of Ukraine has failed to implement an 
effective and systemic means to combat the widespread online 
infringement of copyright and related rights, including failures to 
institute transparent and predictable provisions on intermediary 
liability and liability for third parties that facilitate piracy; to 
introduce limitations on such liability for Internet Service Providers 
(ISPs); and to enforce takedown notices for infringing online content. 
Online piracy now has significant and growing consequences for both the 
Ukrainian market and for international trade. For example, several of 
Ukraine's BitTorrent sites are among the most popular in markets such 
as India, illustrating how Ukraine has become perceived as a safe haven 
for online piracy enterprises serving multiple markets.
    There was not a single online piracy-related conviction in Ukraine 
in 2012. In late January 2012, the Government of Ukraine seized servers 
as part of a criminal investigation into one of Ukraine's most visited 
Web sites that was (and remains) a prolific source of infringing 
international music, software, and video. However, the site reopened 
shortly thereafter, and continues to monetize infringing content.

2. Initiation of Section 301 Investigation

    Under Section 302(b)(2) of the Trade Act (19 U.S.C. 2412(b)(2)), 
the Trade Representative shall initiate an investigation under Chapter 
1 of Title III of the Trade Act (commonly referred to as ``Section 
301'') with respect to any act, policy, or practice that was the basis 
of the identification of a country as a priority foreign country under 
section 182 of the Trade Act. (Section 302(b)(2) provides exceptions 
where such acts, policies, and practices are already subject to 
investigation or action under Section 301, or where an investigation 
would not be in the national economic interest.)
    Pursuant to Section 302(b)(2), and in accord with the advice of the 
interagency Section 301 Committee, on May 30, 2013, the Trade 
Representative initiated a Section 301 investigation of the acts, 
policies, and practices of Ukraine that resulted in the priority 
foreign country identification.
    The investigation will examine whether these acts, policies, and 
practices are actionable under section 301(b) of the Trade Act, and, if 
so, what action the Trade Representative should take under Section 
301(b). Acts, policies, or practices of a foreign country are 
actionable under section 301(b) if they are unreasonable and burden or 
restrict U.S. commerce. Under section 301(d)(3)(B)(i)(II) of the Trade 
Act, unreasonable acts, policies, or practices include any act, policy, 
or practice which denies fair and equitable provision of adequate and 
effective protection of intellectual property rights, notwithstanding 
the fact that the foreign country may be in compliance with the 
specific obligations of the Agreement on Trade-Related Aspects of 
Intellectual Property Rights (TRIPS Agreement). Furthermore, under 
section 301(d)(3)(B)(i)(III) of the Trade Act, unreasonable acts, 
policies, or practices also include any act, policy, or practice which 
denies fair and equitable nondiscriminatory market access opportunities 
for persons that rely upon intellectual property protection.
    Section 303(a) of the Trade Act provides that on the date of 
initiation of a Section 301 investigation, the Trade Representative 
shall request consultations with the foreign country concerned 
regarding the issue involved in the investigation. In accordance with 
Section 303(a), by letter dated May 30, 2013, the Trade Representative 
requested consultations with the Government of Ukraine regarding the 
issues under investigation. Because the issues under investigation do 
not involve a trade agreement, the request for consultations does not 
involve formal dispute settlement procedures under a trade agreement.
    USTR will seek information and advice from appropriate 
representatives provided for under section 135 of the Trade Act in 
preparing the U.S. presentations for such consultations.

3. Proposed Determination and Schedule for Investigation

    USTR proposes a determination under sections 304(a)(1)(A) and 
301(b) of the Trade Act that the acts, policies, and practices of 
Ukraine with respect to intellectual property rights (summarized above) 
that resulted in the identification of Ukraine as a priority foreign 
country under Special 301 are unreasonable and burden or restrict 
United States commerce. If the Trade Representative makes a final 
determination under 304(a)(1)(A) that these acts, policies, and 
practices are actionable under Section 301(b), the Trade Representative 
also will determine under Section 304(a)(1)(B) what action to take 
under Section 301(b).
    Section 304(a)(3)(A) of the Trade Act provides that in an 
investigation initiated pursuant to a priority foreign country 
designation, and not involving a trade agreement, the Trade 
Representative shall make the determinations under section 304(a)(1)(A) 
and (B) no later than six months after the date of initiation. Under 
Section 304(a)(3)(B), in certain circumstances the Trade Representative 
may extend the investigation for an additional 3 months. In this 
investigation, unless extended under section 304(a)(3)(B), the 
determinations under section 304(a)(1)(A) and (B) would be made by no 
later than November 30, 2013.

4. Public Comments

a. Written Comments

    The Section 301 Committee invites interested persons to submit 
written comments and to participate in a public hearing on the matters 
under investigation. The subject matter of any written comments and 
oral testimony may include comments on: (i) The acts, policies, and 
practices of the Government of Ukraine that are the subject of this 
investigation; (ii) the amount of burden or restriction on U.S. 
commerce caused by these acts, policies, and practices; (iii) whether--
as described in the above proposed determination--the acts, policies, 
and practices of Ukraine are actionable under section 301(b); and (iv) 
what action the Trade Representative should take under section 301(b).

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    As noted above, interested persons should submit any written 
comments, as well as any rebuttal comments to the hearing testimony, by 
July 31, 2013.

b. Oral Testimony

    A public hearing will be held on July 18 in Conference Rooms 1 and 
2 at the offices of USTR, 1724 F Street NW., Washington, DC 20508. 
Persons wishing to testify at the hearing must provide written 
notification of their intention by June 27, 2013. The intent to testify 
notification must be made in the ``Type Comment'' field under docket 
number USTR-2013-0023 on the www.regulations.gov Web site and should 
include the name, address, and telephone number of the person intending 
to present testimony. A summary of the testimony must accompany the 
notification. After the Chairman of the Section 301 Committee considers 
the request to present oral testimony at the hearing, the Staff 
Assistant to the Section 301 Committee will notify the applicant of the 
time of his or her testimony. A full, written version of hearing 
testimony is due by July 11, 2013. Remarks at the hearing should be 
limited to no more than ten minutes to allow for possible questions 
from the Section 301 Committee.

c. Rebuttal Comments

    To allow interested persons an opportunity to contest the 
information provided by other parties at the hearing, USTR will accept 
written rebuttal comments, which must be filed by July 31, 2013. 
Rebuttal comments should be limited to demonstrating errors of fact or 
analysis not pointed out in the hearing testimony and should be as 
concise as possible.

5. Requirements for Submissions

    Persons submitting written comments, written hearing testimony, or 
rebuttal comments must do so in English and must identify (on the first 
page of the submission) the ``Ukraine Section 301 Investigation.'' Any 
comments that include quantitative discussions of burdens or 
restrictions on U.S. commerce should be accompanied by the methodology 
used in calculating such burdens or restrictions.
    To ensure the timely receipt and consideration of comments, USTR 
strongly encourages interested persons to make on-line submissions, 
using the www.regulations.gov Web site. To submit comments via 
www.regulations.gov, enter docket number USTR-2013-0023 on the home 
page and click ``search.'' The site will provide a search-results page 
listing all documents associated with this docket. Find a reference to 
this notice and click on the link entitled ``Comment Now.'' (For 
further information on using the www.regulations.gov Web site, please 
consult the resources provided on the Web site by clicking on ``How to 
Use This Site'' on the left side of the home page).
    The www.regulations.gov Web site allows users to provide comments 
by filling in a ``Type Comment'' field, or by attaching a document 
using an ``Upload File'' field. USTR prefers that comments be provided 
in an attached document. If a document is attached, it is sufficient to 
type ``See attached'' in the ``Type Comment'' field. USTR prefers 
submissions in Microsoft Word (.doc) or Adobe Acrobat (.pdf). If the 
submission is in another format, please indicate the name of the 
software application in the ``Type Comment'' field.
    For any comments submitted electronically containing business 
confidential information, the file name of the business confidential 
version should begin with the characters ``BC''. Any page containing 
business confidential information must be clearly marked ``BUSINESS 
CONFIDENTIAL'' on the top of that page. Filers of submissions 
containing business confidential information must also submit a public 
version of their comments. The file name of the public version should 
begin with the character ``P''. The ``BC'' and ``P'' should be followed 
by the name of the person or entity submitting the comments. Filers 
submitting comments containing no business confidential information 
should name their file using the name of the person or entity 
submitting the comments.
    Please do not attach separate cover letters to electronic 
submissions; rather, include any information that might appear in a 
cover letter in the comments themselves. Similarly, to the extent 
possible, please include any exhibits, annexes, or other attachments in 
the same file as the submission itself, not as separate files.
    As noted, USTR strongly urges submitters to file comments through 
www.regulations.gov, if at all possible. Any alternative arrangements 
must be made with Gwendolyn Diggs in advance of transmitting a comment. 
Ms. Diggs should be contacted at (202) 395-3150.

6. Public Docket

    Submissions will be placed in the docket and open to public 
inspection pursuant to 15 CFR 2006.13, except business confidential 
information exempt from public inspection in accordance with 15 CFR 
2006.15. Submissions may be viewed on the www.regulations.gov Web site 
by entering docket number USTR-2013-0023 in the search field on the 
home page.

William Busis,
Chair, Section 301 Committee.
[FR Doc. 2013-13307 Filed 6-4-13; 8:45 am]
BILLING CODE 3290-F3-P