01-20151. Determination of Action To Suspend GSP Benefits Under Section 301(b); Further Proposed Action and Publication of Preliminary Product List; and Request for Public Comment: Intellectual Property Laws and Practices of the Government of Ukraine

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice of determinations and action; notice of proposed action; request for written comments; invitation to participate in public hearing.

SUMMARY:

The United States Trade Representative (Trade Representative), pursuant to sections 304(a)(1)(A) and 301(b) of the Trade Act of 1974, as amended (the Trade Act), has determined that certain acts, policies, and practices of Ukraine with respect to the protection of intellectual property rights are unreasonable and burden or restrict United States commerce and are thus actionable under section 301(b). Pursuant to sections 304(a)(1)(B), 301(b) and 301(c) of the Trade Act, the Trade Representative has determined that appropriate action to obtain the elimination of such acts, policies, and practices includes the suspension of duty-free treatment accorded to all products of Ukraine under the Generalized System of Preferences (GSP) program. Moreover, because further action may include the imposition of prohibitive duties on certain products of Ukraine, in this notice USTR is also publishing a preliminary list of Ukrainian products under consideration for the imposition of prohibitive duties. USTR invites interested persons to submit written comments and to participate in a public hearing concerning the possible imposition of prohibitive duties on the products on the enclosed preliminary list.

EFFECTIVE DATES:

The Trade Representative's determinations as to actionability under section 301(b) and the suspension of GSP benefits were made on August 2, 2001. The suspension of Ukraine's GSP benefits will be effective with respect to goods entered, or withdrawn from warehouse, for consumption on or after August 24, 2001. With respect to the preliminary list of Ukrainian products under consideration for the imposition of prohibitive duties: requests to appear at the public hearing are due by August 24, 2001; written testimony is due by August 31, 2001; a public hearing is scheduled for September 11, 2001; and written comments and rebuttal comments are due by September 17, 2001.

ADDRESSES:

Requests, comments, and testimony should be submitted to Sybia Harrison, Staff Assistant to the Section 301 Committee, ATTN: Docket 301-121, Office of the United States Trade Representative, 1724 F Street, NW., Room 217, Washington, DC 20508. The public hearing is scheduled to be held in at the Office of the United States Trade Representative, 1724 F Street, NW., Rooms 1 and 2, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Kira Alvarez, Office of Services, Investment and Intellectual Property, Office of the United States Trade Representative [phone]; David Birdsey, Office of European Affairs, Office of the United States Trade Representative, [phone]; William Busis, Office of the General Counsel, Office of the United States Trade Representative, [phone]; Sybia Harrison, Staff Assistant to the Section 301 Committee, [phone], for information regarding participation in the public hearing or the submission of written comments; John Valentine, International Agreements Staff, U.S. Customs Service, [phone], for questions concerning product classification.

SUPPLEMENTARY INFORMATION:

In a notice published on April 6, 2001 (66 FR 18346), USTR announced the initiation of a section 302 investigation regarding the Government of Ukraine's intellectual property protection laws and practices, including the Government of Ukraine's failure to use existing law enforcement authority to stop the ongoing unauthorized production of optical media products and to enact an optical media licensing regime that would preclude the piracy of such products. See 66 FR 18346 (April 6, 2001). The April 6, 2001 notice proposed to determine that these acts, policies and practices are actionable under section 301(b) and that appropriate action may include the suspension of duty-free treatment accorded under the GSP program to some or all products of Ukraine. The notice also stated that, as a further step, the Trade Representative might decide to impose increased duties or other import restrictions on Ukrainian goods. Finally, the April 6, 2001 notice stated that prior to imposing increased duties or import restrictions on Ukrainian goods, USTR would publish a notice requesting comments on a specific list of Ukrainian products.

The Section 301 Committee conducted a public hearing on April 27, 2001, and received and reviewed written comments on the issues in the investigation. As of this time, the Government of Ukraine has not stopped the unauthorized production of optical media products and has not enacted a licensing regime to prevent optical media piracy.

Determinations

Matters actionable under section 301(b) include acts, policies, or practices of a foreign government that are “unreasonable” and burden or restrict U.S. commerce. Under section 301(d)(3)(B)(i)(II), “unreasonable” practices include any act, policy or practice which denies fair and equitable provision of adequate and effective protection of intellectual property rights.

The United States has consulted repeatedly with the Government of Ukraine regarding the matters under investigation. The Government of Ukraine has made very little progress in addressing two key issues: (1) the use of existing law enforcement tools to stop the current piracy, and (2) the introduction of an optical media licensing regime (which has become the international norm) to prevent a subsequent resurgence of pirate activity. Accordingly, on the basis of the investigation initiated under section 302 of the Trade Act, the comments received, and the consultations, the Trade Representative has determined pursuant to sections 301(b) and 304(a)(1)(A) of the Trade Act that the acts, policies and practices of Ukraine with respect to the protection of intellectual policy rights are unreasonable and burden or restrict U.S. commerce, and are thus actionable under section 301(b).

Because the determination of the Trade Representative under section 304(a)(1)(A) of the Trade Act is affirmative, the Trade Representative must determine the appropriate and feasible action to take under section 301(b) and (c). In a case in which the act, policy, or practice under investigation also fails to meet the eligibility criteria for receiving duty-free treatment under the GSP program, section 301(c)(1)(C) of the Trade Act provides that the Trade Representative may withdraw, limit or suspend such duty-free treatment. One of the GSP program's eligibility criteria is the extent to which a foreign country provides adequate and effective protection of intellectual property rights.

Pursuant to sections 304(a)(1)(B), 301(b), and 301(c)(1)(C) of the Trade Act, the Trade Representative has determined that appropriate and feasible action includes the suspension of duty-free treatment accorded to the products of Ukraine under the GSP program. Accordingly, the Harmonized Tariff Schedule of the United States (HTS) is modified as follows: (1) General note 4(a) is modified by deleting “Ukraine” from the list of independent countries; (2) general note 4(d) is modified by deleting “2306.30.00 Ukraine” and by deleting “Ukraine” set out opposite subheading 2804.29.00; and (3) the Rates of Duty 1-Special subcolumn for HTS subheading 2306.30.00 is modified by deleting the “A*” and inserting an “A”. The foregoing modifications to the HTS are effective with respect to articles entered, or withdrawn from warehouse, for consumption on or after August 24, 2001.

Also, in this notice USTR is proposing that further action under section 301—in addition to the suspension of GSP benefits—if appropriate should include the imposition of prohibitive duties on a final list of Ukrainian products. The final list of products would be drawn from the attached preliminary list.

Written Comments and Public Hearing

The Section 301 Committee invites interested persons to submit written comments and to participate in a public hearing on the possible imposition of prohibitive duties on the products of Ukraine identified in the preliminary product list in the Annex to this notice. The comments sought by the Section 301 Committee with respect to particular products include (i) whether imposing prohibitive duties on a particular product would be practicable or effective in terms of obtaining an elimination of the acts, policies, and practices of the Government of Ukraine that are the subject of the investigation; and (ii) whether imposing prohibitive duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses.

In the annexed products list, the items with respect to which comments are requested are products of Ukraine classified in the indicated subheadings of the HTS. The product descriptions in the annex are for information purposes only; the descriptions are not intended to delimit in any way the scope of products that are under consideration for the imposition of increased duties. Instead, the scope of the proposed action under section 301 is governed by the HTS nomenclature for the subheadings listed in the annex. Issues regarding the classification of particular products would be decided by the U.S. Customs Service under its usual rules and procedures for product classification.

Written comments are due by September 17, 2001. A public hearing addressed to these same issues is scheduled for September 11, 2001, in Rooms 1 and 2, First Floor, Office of the United States Trade Representative, 1724 F Street, NW., Washington, DC. Interested persons wishing to testify orally at the hearing must provide a written request by August 24, 2001 to Sybia Harrison, Staff Assistant to the Section 301 Committee, ATTN: Docket 301-121, Office of the United States Trade Representative, 1724 F Street, NW., Room 217, Washington, DC 20508. Requests to testify must include the following information: (1) Name, address, telephone number, fax number, and firm or affiliation of the person wishing to testify; and (2) a brief summary of the comments to be presented. After the Chairman of the Section 301 Committee considers the request to present oral testimony, Ms. Harrison will notify the applicant of the time of his or her testimony. In addition, persons presenting oral testimony must submit their complete written testimony by August 31, 2001. In order to allow each interested party an opportunity to contest the information provided by other parties at the hearing, USTR will accept written rebuttal comments, which must be filed by September 17, 2001. Rebuttal comments should be limited to demonstrating errors of fact or analysis not pointed out in the hearing and should be as concise as possible. All written comments must state clearly the position taken, describe with particularity the supporting rationale, be in English, and be provided in twenty copies to: Sybia Harrison, Staff Assistant to the Section 301 Committee, ATTN: Docket 301-121, Office of the United States Trade Representative, 1724 F Street, NW., Room 217, Washington, DC 20508. In addition, all written comments should list on the first page the particular HTS subheadings which are addressed in the comments.

Comments will be placed in a file (Docket 301-121) open to public inspection pursuant to 15 CFR 2006.13, except confidential business information exempt from public inspection in accordance with 15 CFR 2006.15. Confidential business information submitted in accordance with 15 CFR 2006.15 must be clearly marked “BUSINESS CONFIDENTIAL” in a contrasting color ink at the top of each page on each of the 20 copies, and must be accompanied by a non-confidential summary of the confidential information. The non-confidential summary shall be placed in the file that is open to public inspection. An appointment to review the docket may be made by calling Brenda Webb at [phone]. The USTR Reading Room is open to the public from 10 a.m. to 12 noon and 1 p.m. to 4 p.m., Monday through Friday, and is located in Room 3, First Floor, Office of the United States Trade Representative, 1724 F Street, NW., Washington, DC 20508.

William Busis,

Chairman, Section 301 Committee.

Annex

Preliminary Product List in Investigation 301-121

The proposed action under Section 301 includes the imposition of prohibitive duties on products of Ukraine that are classified in the subheadings of the Harmonized Tariff Schedule of the United States (HTS) listed below. The product descriptions in this annex are for information purposes only; the descriptions are not intended to delimit in any way the scope of products that are under consideration for the imposition of increased duties. Instead, the scope of the proposed action under Section 301 is governed by the HTS nomenclature for the subheadings listed in this annex. Issues regarding the classification of particular products would be decided by the U.S. Customs Service under its usual rules and procedures for product classification.

HTS subheadings	Product description
2530.90.00	Other mineral substances, not elsewhere specified or included.
2614.00.60	Titanium ores and concentrates, other than synthetic rutile.
2710.00.05	Distillate and residual fuel oils (including blends) obtained from bituminous minerals, testing under 25 degrees A.P.I.
2710.00.10	Distillate and residual fuel oils (including blends) obtained from bituminous minerals, testing 25 degrees A.P.I. or more.
2804.29.00	Rare gases, other than argon.
2814.10.00	Anhydrous ammonia.
2814.20.00	Ammonia in aqueous solution.
2823.00.00	Titanium oxides.
2825.60.00	Germanium oxides and zirconium dioxide.
2849.20.10	Silicon carbide, crude.
2849.20.20	Silicon carbide, in grains, or ground, pulverized or refined.
3102.80.00	Mixtures of urea and ammonium nitrate in aqueous or ammoniacal solution.
3105.51.00	Other mineral or chemical fertilizers, containing nitrates and phosphates.
3206.11.00	Pigments and preparations based on titanium dioxide containing 80% or more by weight of titanium dioxide calculated on the dry weight.
3206.19.00	Pigments and preparations based on titanium dioxide containing less than 80% by weight of titanium dioxide calculated on the dry weight.
4804.51.00	Other uncoated, unbleached kraft paper and paperboard, in rolls or sheets, weighing 225 gram/square meter or more.
6201.93.30	Other men's or boys' anoraks, windbreakers and similar articles, not knitted or crocheted, of manmade fibers, water resistant.
6201.93.35	Other men's or boys' anoraks, windbreakers and similar articles, not knitted or crocheted, of manmade fibers, not water resistant.
6202.93.45	Other women's or girls' anoraks, windbreakers and similar articles, not knitted or crocheted, of manmade fibers, water resistant.
6202.93.50	Other women's or girls' anoraks, windbreakers and similar articles, not knitted or crocheted, of manmade fibers, not water resistant.
6203.31.50	Men's or boys' suit-type jackets and blazers, not knitted or crocheted, of worsted wool fabric, made with wool yarn of 18.5 micron or less average fiber diameter.
6203.31.90	Men's or boys' suit-type jackets and blazers, not knitted or crocheted, of wool or fine animal hair, not elsewhere specified or included.
6203.33.10	Men's or boys' suit-type jackets and blazers, not knitted or crocheted, of synthetic fibers, containing 36% or more by weight of wool or fine animal hair.
6203.33.20	Men's or boys' suit-type jackets and blazers, not knitted or crocheted, of synthetic fibers, containing less than 36% by weight of wool or fine animal hair.
6203.39.50	Men's or boys' suit-type jackets and blazers, not knitted or crocheted, containing 70% or more by weight of silk.
6203.39.90	Men's or boys' suit-type jackets and blazers, not knitted or crocheted, of textile materials (other than wool, cotton or man-made fibers), containing less than 70% by weight of silk.
6203.41.12	Other men's or boys' trousers, not knitted or crocheted, of worsted wool fabric, made with wool yarn of 18.5 micron or less average fiber diameter.
6203.41.18	Other men's or boys' trousers, breeches and shorts, not knitted or crocheted, of wool or fine animal hair, not elsewhere specified or included.
6203.43.30	Men's or boys' trousers, breeches and shorts, not knitted or crocheted, of synthetic fibers, containing 36% or more by weight of wool or fine animal hair.
6203.43.35	Men's or boys' trousers and breeches, not knitted or crocheted, of synthetic fibers, containing less than 36% by weight of wool or fine animal hair, water resistant.
6203.43.40	Men's or boys' trousers, breeches and shorts, not knitted or crocheted, of synthetic fibers, containing less than 36% by weight of wool or fine animal hair, not water resistant.
6204.13.10	Women's or girls' suits, not knitted or crocheted, of synthetic fibers, containing 36% or more by weight of wool or fine animal hair.
6204.13.20	Women's or girls' suits, not knitted or crocheted, of synthetic fibers, containing less than 36% by weight of wool or fine animal hair.
6204.33.40	Women's or girls' suit-type jackets and blazers, not knitted or crocheted, of synthetic fibers, containing 36% or more by weight of wool or fine animal hair.
6204.33.50	Women's or girls' suit-type jackets and blazers, not knitted or crocheted, of synthetic fibers, containing less than 36% by weight of wool or fine animal hair.
6204.39.20	Women's or girls' suit-type jackets and blazers, not knitted or crocheted, of artificial fibers, containing 36% or more by weight of wool or fine animal hair.
6204.39.30	Women's or girls' suit-type jackets and blazers, not knitted or crocheted, of artificial fibers, containing less than 36% by weight of wool or fine animal hair.
6204.43.30	Women's or girls' dresses, not knitted or crocheted, of synthetic fibers, containing 36% or more by weight of wool or fine animal hair.
6204.43.40	Women's or girls' dresses, not knitted or crocheted, of synthetic fibers, not elsewhere specified or included.
6204.53.20	Women's or girls' skirts and divided skirts, not knitted or crocheted, of synthetic fibers, containing 36% or more by weight of wool or fine animal hair.
6204.53.30	Women's or girls' skirts and divided skirts, not knitted or crocheted, of synthetic fibers, containing less than 36% by weight of wool or fine animal hair.
6204.62.40	Women's or girls' trousers, breeches and shorts, not knitted or crocheted, of cotton, other than certified hand-loomed or folklore.
6204.63.25	Women's or girls' trousers, breeches and shorts, not knitted or crocheted, of synthetic fibers, containing 36% or more by weight of wool or fine animal hair.
6204.63.30	Women's or girls' trousers or breeches, not knitted or crocheted, of synthetic fibers, containing less than 36% by weight of wool or fine animal hair, water resistant.
6204.63.35	Women's or girls' trousers, breeches and shorts, not knitted or crocheted, of synthetic fibers, containing less than 36% by weight of wool or fine animal hair, not water resistant.
6204.69.20	Women's or girls' trousers, breeches and shorts, not knitted or crocheted, of artificial fibers, containing 36% or more by weight of wool or fine animal hair.
6204.69.25	Women's or girls' trousers, breeches and shorts, not knitted or crocheted, of artificial fibers, containing less than 36% by weight of wool or fine animal hair.
6205.20.20	Men's or boys' shirts, not knitted or crocheted, of cotton, other than certified hand-loomed and folklore.
6205.30.15	Other men's or boys' shirts, not knitted or crocheted, of manmade fibers, containing 36 percent or more by weight of wool or fine animal hair.
6205.30.20	Other men's or boys' shirts, not knitted or crocheted, of manmade fibers, containing less than 36% by weight of wool or fine animal hair.
6206.40.25	Women's or girls' blouses, shirts and shirt-blouses, not knitted or crocheted, of manmade fibers, containing 36% or more by weight of wool or fine animal hair.
6206.40.30	Women's or girls' blouses and shirts, not knitted or crocheted, of manmade fibers, not elsewhere specified or included.
6211.43.00	Women's or girls' track suits or other garments not elsewhere specified or included, not knitted or crocheted, of man-made fibers
6403.99.60	Footwear with outer soles of rubber, plastics or composition leather and uppers of leather, not covering the ankle, not welt, for men, youths and boys, not elsewhere specified or included.
6403.99.75	Footwear with outer soles of rubber, plastics or composition leather and uppers of leather, not covering the ankle, not welt, for persons (other than men, youths or boys), valued not over $2.50/pair.
6403.99.90	Footwear with outer soles of rubber, plastics or composition leather and uppers of leather, not covering the ankle, not welt, for persons (other than men, youths or boys), valued over $2.50/pair.
6404.19.35	Footwear with outer soles of rubber or plastics and uppers of textile, with open toes or open heels or slip-on type, 10% or more by weight of rubber or plastics.
7102.10.00	Diamonds, unsorted.
7102.31.00	Nonindustrial diamonds, unworked or simply sawn, cleaved or bruted.
7102.39.00	Nonindustrial diamonds, worked, but not mounted or set.
7115.10.00	Platinum catalysts in the form of wire cloth or grill.
7202.11.10	Ferromanganese containing by weight more than 2% but not more than 4% of carbon.
7202.11.50	Ferromanganese containing by weight more than 4% of carbon.
7202.21.10	Ferrosilicon containing by weight more than 55% but not more than 80% of silicon and containing by weight more than 3% of calcium.
7202.21.50	Ferrosilicon containing by weight more than 55% but not more than 80% of silicon, not elsewhere specified or included.
7202.21.75	Ferrosilicon containing by weight more than 80% but not more than 90% of silicon.
7202.21.90	Ferrosilicon containing by weight more than 90% of silicon.
7209.15.00	Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, in coils, not further worked than cold-rolled, of a thickness of 3 mm or more, not clad, plated or coated.
7209.16.00	Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, in coils, not further worked than cold-rolled, of a thickness exceeding 1 mm but less than 3 mm, not clad, plated or coated.
7209.17.00	Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, in coils, not further worked than cold-rolled, of a thickness 0.5 mm or more but not exceeding 1mm, not clad, plated or coated.
7209.25.00	Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, not in coils, not further worked than cold-rolled, of a thickness of 3 mm or more, not clad, plated or coated.
7209.26.00	Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, not in coils, not further worked than cold-rolled, of a thickness exceeding 1 mm but less than 3 mm, not clad, plated or coated.
7209.27.00	Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, not in coils, not further worked than cold-rolled, of a thickness of 0.5 mm or more but not exceeding 1 mm, not clad, plated or coated.
7211.23.20	Flat-rolled products of iron or nonalloy steel (not high-strength steel), of a width of less than 300 mm, not further worked than cold-rolled, containing less than 0.25% by weight of carbon, of a thickness exceeding 1.25 mm, not clad, plated or coated.
7211.23.30	Flat-rolled products of iron or nonalloy steel, of a width of less than 300 mm, not further worked than cold-rolled, containing less 0.25% by weight of carbon, of a thickness exceeding 0.25 mm but not exceeding 1.25 mm, not clad, plated or coated.
7211.23.60	Flat-rolled products of iron or nonalloy steel, of a width of 300 mm or more but less than 600 mm, not further worked than cold-rolled, containing less than 0.25% by weight of carbon, not clad, plated or coated.
7211.29.20	Flat-rolled products of iron or nonalloy steel, of a width of less than 300 mm, not further worked than cold-rolled, containing 0.25% or more by weight of carbon, of a thickness exceeding 0.25 mm, not clad, plated or coated.
7211.29.60	Flat-rolled products of iron or nonalloy steel, of a width of 300 mm or more but less than 600 mm, not further worked than cold-rolled, containing 0.25% or more by weight of carbon, not clad, plated or coated.
7213.10.00	Iron or nonalloy steel concrete reinforcing bars and rods, in irregularly wound coils, hot-rolled.
7214.99.00	Iron or nonalloy steel bars and rods, not further worked than hot-rolled, hot-drawn or hot-extruded but including those twisted after rolling, not elsewhere specified or included.
7215.50.00	Iron or nonalloy steel bars and rods, not further worked than cold-formed or cold-finished, not elsewhere specified or included.
7225.40.30	Flat-rolled products of other alloy steel, of a width of 600 mm or more, not further worked than hot-rolled, not in coils, of a thickness of 4.75 mm or more.
7228.20.10	Other bars and rods of silico-manganese steel, not cold-formed.
7228.30.80	Other bars and rods of other alloy steel, not further worked than hot-rolled, hot-drawn or extruded.
7228.40.00	Other bars and rods of other alloy steel, not further worked than forged.
7228.50.10	Other bars and rods of alloy tool steel (other than high-speed steel), not further worked than cold-formed or cold-finished.
7228.50.50	Other bars and rods of other alloy steel, not further worked than cold-formed or cold-finished.
7302.10.10	Rails for railway or tramway tracks, of iron or nonalloy steel.
7304.10.10	Seamless line pipe of a kind used for oil and gas pipelines of iron (other than cast iron) or nonalloy steel.
7304.29.20	Seamless casing pipe, not threaded or coupled, of a kind used in drilling for oil or gas, of iron (other than cast iron) or nonalloy steel.
7304.39.00	Other tubes, pipes and hollow profiles, seamless, of circular cross section, of iron (other than cast iron) or nonalloy, not elsewhere specified or included.
7326.90.85	Other articles of iron or steel, not elsewhere specified or included.
7402.00.00	Unrefined copper; copper anodes for electrolytic refining.
7601.20.90	Unwrought aluminum alloys not elsewhere specified or included.
8418.69.00	Other refrigerating or freezing equipment not elsewhere specified or included; heat pumps, other than the air-conditioning machines of heading 8415.
9506.11.20	Cross-country snow skis.
9506.11.40	Snow-skis (other than cross-country).
9506.99.25	Ice-hockey and field-hockey articles and equipment, except balls and skates, and parts and accessories thereof.