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Opening Statement at the Oversight Hearing on "Intellectual Property Theft in Russia."

Location: Washington, DC

Oversight Hearing on "Intellectual Property Theft in Russia."

This, the second of our two back-to-back oversight hearings on the subject of international intellectual property theft, will focus on the state of IP enforcement offered within the Russian Federation.

In our first hearing, the Subcommittee received testimony that China, the single largest source of counterfeit and pirated products worldwide, has accelerated their theft of intellectual property and failed to adopt enforcement procedures that are designed to deter such actions.

The Russian Federation now seeks to become a member of the World Trade Organization and is counting on the support of the United States government and the American people for that privilege.

Recently, Secretary of State Condoleezza Rice acknowledged the reality that Russia lacks "the legal framework to prosecute those who engage in piracy," and stated that this "really must be taken care of before WTO accession."

However, the adoption of a "legal framework" alone, which is not accompanied by a demonstrated and sustained commitment to criminal enforcement of large scale commercial piracy and counterfeiting, is not enough to gain U.S. support for Russian accession.

This commitment must be made at the highest levels. And it must be made before the American people endorse Russian accession to the WTO.

Russian President Vladimir Putin stated last month, "Our bureaucracy is still to a large extent … isolated and … [is undermined by] corruption, irresponsibility and incompetence."

Anyone familiar with the Russian Federation's track record for protecting and enforcing intellectual property would concur with President Putin's statement.

Last Thursday's Wall Street Journal contained a report entitled "In Russia, Politicians Protect Movie and Music Pirates," that describes how certain Russian elected officials thwart police investigations of IP crimes and profit by so doing.

As our witnesses will testify today, the grim reality is that lawlessness, physical danger and corruption are part of the daily challenges faced by businesses and individuals who seek to conduct business or protect their IP rights in Russia.

They will provide compelling evidence that the situation has actually worsened rather than improved in recent years.

The Members of this Subcommittee will receive evidence that the Russian government is the landlord for as many as 18 optical disc (CD/DVD) plants that annually produce tens of millions of illicit copyrighted works for export to mature markets and that the government has failed to even "inspect" the vast majority of these facilities let alone investigate or prosecute any of the criminals.

On the rare occasions when someone is investigated for IP theft in Russia, the most likely outcome is that no prosecution will occur and that any conviction will result in a suspended sentence.

If Russia is permitted to join the WTO without first demonstrating a sustained and serious commitment to the enforcement of IP rights, then the real winners will be the criminal syndicates.

We owe it to the Russian people and to the American people to consider this record before the U.S. advocates that the Russian government be rewarded with accession to the WTO.

I look forward to hearing from today's witnesses.

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