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Hong Kong: The United States is encouraged by the progress Hong Kong has made in the few months since the results of the out-of-cycle review were announced in January. However, despite significant steps forward, the piracy situation has continued to worsen. Retail distribution of pirated products continues to flourish, and illegal production of optical media is increasing rapidly. The United States is pleased that new anti-piracy legislation requiring licensing and inspection of CD production sites passed earlier this year and that a licensing requirement for the import and export of machinery and equipment used for production of compact discs, video compact discs, or CD-ROMs was implemented in late 1997. Hong Kong officials also improved cooperation with the copyright industries, leading to the initiation of a reward system for information concerning commercial pirate operations, and are taking increasingly significant enforcement actions. We look forward to full implementation of the anti-piracy legislation later this year, effective enforcement actions, and to a significant reduction in piracy rates in 1998. We will review Hong Kong's progress toward these goals in an out-of-cycle review in September.
Ireland: In 1997, the United States initiated dispute settlement proceedings against Ireland because Ireland has not yet amended its copyright law to comply with its TRIPS obligations. Developed country obligations under the TRIPS Agreement came into effect in January 1996. Examples of TRIPS inconsistencies include the absence of a rental right for sound recordings, no "anti-bootlegging" provision, and very low criminal penalties which fail to deter piracy, all of which have contributed to high levels of piracy in Ireland. We are pleased that Ireland recently committed to accelerate its work on a new copyright law, to pass expedited legislation addressing two pressing enforcement issues, and has increased enforcement actions against piracy. We look forward to enactment of a TRIPS-consistent copyright law and additional progress on enforcement in 1998.
Jamaica is three years late in passing legislation it committed to enact in our bilateral intellectual property agreement in 1994. Pending legislation, while not halted, has been moving very slowly through the legislature. The Bilateral Investment Treaty that accompanied the IPR agreement is already in force, so Jamaica enjoys the benefit of the BIT while failing to meet its commitments. We understand that the Jamaican Government has developed a time line for the progression of the IPR bills through the Congress, and look to the Jamaican Government to move quickly to move the pending IPR legislation in order to meet Jamaica's obligations.
Japan continues to present a number of concerns in its protection of software and trade secrets, and in the operation of its patent system. U.S. computer software groups remain concerned about end-user piracy in Japan. The Japanese Government should strengthen its enforcement of anti-piracy laws. The amendment of Japan's Civil Procedures Act to award punitive damages rather than actual damages would be an important step toward increasing the deterrent the deterrent against software piracy. Japanese law limits the ability of judges to seal court records or otherwise protect proceedings from disclosure. This puts owners of trade secrets, in cases involving misappropriation, in the untenable position of being unable to protect a trade secret without disclosing it. We encourage the Government of Japan to amend the civil procedure act to correct this anomaly. Over the years, Japan has been receptive to U.S. concerns regarding narrow
