XN000022-1996-05-01 — Page 3

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"In addition, we are also taking vigorous enforcement action. We have:

a) adopted a pro-active enforcement approach in the form of intelligence gathering and investigation work relating to alleged triad and organised criminal involvement in local and cross-border copyright piracy activities. Customs and the Police have been closely co-operating with each other on this front;

b) increased by 40% over three years the number of enforcement staff in order to strengthen the Customs' capability in enforcement and prosecution, intelligence gathering, border surveillance and interceptions; and

c) instituted closer co-operation between the Hong Kong Customs and the relevant IPR enforcement authorities in the Guangdong Province and the Shenzhen Special Economic Zone. Good progress has been made on a number of initiatives, including the setting up of specific contact points, exchange of information and intelligence, organisation of visits and seminars, and where appropriate, the possibility of mounting co-ordinated anti-piracy operations."

Under Special 301 provisions, the US Trade Representative is required to publish annually lists of countries which offer inadequate IPR protection to US IPR investments in these countries.

The lists are ranked in the following descending order in terms of seriousness in IPR violation: "Priority Foreign Country List", "Priority Watch List" and "Watch List". There is also the lowest category "Other Observations" in the Report.

In this year's Report, there are some 50 countries named in categories above "Other Observations" and some twenty trading partners referred to in "Other Observations".

Except for countries named in the "Priority Foreign Country List", the US law does not require Special 301 action against countries named in any of the other categories. Hence, there will not be any immediate threat of trade sanction against Hong Kong.

Separately, the US Trade Representative's report names China as a "Priority Foreign Country".

"We note that negotiations are continuing between China and the US on the latter's concerns with IPR protection in China. This is a bilateral trade matter between China and the US, and we hope that it will be resolved through dialogue," the spokesman said.

End