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. Last Updated: 07/27/2016

U.S. Slaps Sanctions On Kiev for Piracy

KIEV -- Seeking to pressure Ukraine into taking more action to eradicate compact disc piracy, the United States imposed trade sanctions Wednesday that will restrict steel and other metal exports.

The United States has accused Ukraine of failing to crack down sufficiently on the illegal production of CDs, which the U.S. record industry estimates costs it some $200 million annually.

The sanctions are expected to cost Ukraine some $470 million annually, government officials say. Lawmakers have said that they will cost thousands of Ukrainian jobs.

The issue emerged some three years ago after accusations by U.S. authorities that Ukraine is the main producer of pirated CDs in Europe. According to experts' estimates, the country produces around 70 million CDs annually, far exceeding local demands of up to 5 million CDs, the U.S. Embassy has said.

Officials at the two main plants that are accused of CD piracy claim they are innocent and that the U.S. campaign to root out unlawful production of compact discs is politically motivated and aimed at protecting the U.S. metals market.

At the Rostok-CD plant in Kiev, the country's biggest compact disc producer, top officials said the plant had undergone numerous checks by domestic and foreign experts last year and is always open to media visits.

"A plant that fulfills a service cannot be a pirate by definition," said Rostok-CD director Oleh Purik. He said the plant tries to check whether its customers are honoring intellectual property rights.

Government action to root out piracy has prompted three of Ukraine's five CD producers to shut down, Purik said.

Bootleg CDs are available at kiosks throughout Kiev, costing about $2 each. CDs are also on sale in many shops for about twice as much.

Last week, the Ukrainian parliament approved a bill aimed at regulating compact disc production and heading off economic sanctions. But the legislation apparently failed to satisfy U.S. demands.

Ihor Eihenvald, head of a business association that favors the protection of intellectual property, said no law would solve Ukraine's piracy problems."If there are some shady companies, they'll remain in the shade," he said.