Termination of Action: Protection of Intellectual Property Rights by the Government of Honduras

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-116]

Termination of Action: Protection of Intellectual Property Rights

by the Government of Honduras

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of termination of action and monitoring and request for

public comments.

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SUMMARY: On March 16, 1998, the USTR determined that the failure by the

Government of Honduras to provide adequate and effective protection of

intellectual property rights was unreasonable and burdened or

restricted United States commerce and that the appropriate action was

to suspend preferential treatment accorded under the Generalized System

of Preferences (GSP) and Caribbean Basin Initiative (CBI) programs to

certain products of Honduras, including certain cucumbers, watermelons,

and cigars. In view of the Government of Honduras' measures to combat

piracy and to protect intellectual property rights of the United

States, the USTR has terminated that action taken under Section 301(b)

of the Trade Act of 1974 (``Trade Act''). USTR will monitor Honduras'

compliance in protecting the intellectual property rights of the United

States pursuant to Section 306 of the Trade Act.

ADDRESSES: Office of the United States Trade Representative, 600 17th

Street, NW, Washington, DC 20508.

FOR FURTHER INFORMATION CONTACT:

Mary Barnicle, Office of the Western Hemisphere, (202) 396-5190 or

William Busis, Office of the General Counsel, (202) 395-3150, Office of

the United States Trade Representatives.

SUPPLEMENTARY INFORMATION: In 1992, the Motion Picture Association

filed a petition under the Generalized System of Preferences program

asking that tariff preference benefits to Honduras under the GSP and

CBI programs be withdrawn due to widespread, blatant copyright piracy.

In May 1997, the Trade Policy Staff Committee (TPSC) recommended that

GSP and CBI benefits be suspended unless the Government of Honduras

improved its intellectual property rights enforcement within four

months. On October 31, 1997, in order to implement the TPSC

recommendation, the USTR initiated an investigation under Section

302(b) of the Trade Act (19 U.S.C. 2412(b)) with respect to certain

acts and policies of the Government of Honduras concerning its

protection of intellectual property rights, including the failure to

provide adequate and effective copyright protection and enforcement of

rights of copyright owners, resulting in, for example, the wise-spread

unauthorized broadcasting in Honduras of pirated videos and the

rebroadcasting of U.S. satellite-carried television programming. See 62

FR 60299 of November 7, 1997. The USTR proposed to determine that the

practices under investigation were actionable under Section 301 of the

Trade Act and that the appropriate response would be a partial

suspension of tariff preferences for certain Honduran imports.

After the initiation of the investigation, the United States

consulted repeatedly with the Government of Honduras regarding the

matters under investigation. However, while the Honduran government

established a television regulatory authority and initiated criminal

actions against two stations engaged in broadcast piracy, blatant

broadcast piracy continued and U.S. copyright-based industries

continued to suffer harm. On March 16, 1998, the USTR determined

pursuant to sections 301(b)(1) and 304(a)(1)(A)(ii) of the Trade Act

that the Government of Honduras failed to provide adequate and

effective protection of intellectual property rights and the acts,

policies or practices of Honduras under investigation were unreasonable

and burdened or restricted U.S. commerce. The USTR further determined

pursuant to sections 304(a)(1)(B), 301(b)(2), and 301(c)(1)(C) of the

Trade Act that the appropriate and feasible action was to suspend the

duty-free GSP and CBI treatment accorded to certain products of

Honduras, including certain cucumbers, watermelons, and cigars. See 63

FR 16608 of April 3, 1998.

Following the USTR determinations as to the actionability and

specific action to be taken, the Government of Honduras has taken a

number of steps to stop broadcast piracy. It temporarily shut down two

television stations and imposed and collected fines from the stations

in an effort to provide adequate copyright protection. The Government

of Honduras has also made a written promise to impose higher fines and

to temporarily shut down the television stations again for a longer

period if piracy resumes. Section 307(a)(1)(C) of the Trade Act

authorizes the USTR to terminate any action, subject to the specific

direction, if any, of the President, if such action is being taken

under Section 301(b) and is no longer appropriate. In light of the

foregoing, the USTR has determined that the existing Section 301(b)

action should be terminated and, as specified in the annex to this

notice, the suspended GSP and CBI benefits should be restored.

Restoration of benefits will be effective with regard to articles

entered, or withdrawn from warehouse for consumption, on or after the

date of publication of this notice. The USTR has also decided to

terminate the GSP review initiated in 1993.

Section 604 of the Trade Act, as amended (19 U.S.C. 2463),

authorizes the President to modify the Harmonized Tariff Schedule of

the United States (HTS) to reflect laws, and actions thereunder,

affecting the treatment of imports. In Proclamation 6969 of Jan. 27,

1997 (62 FR 4415 of Jan. 29, 1997), the President delegated to USTR the

authority under Section 604 to embody rectifications, technical or

conforming changes, or similar modifications in the HTS.

The notice that suspended GSP and CBI benefits for certain imports

from Honduras renumbered HTS general note 7(d)(iv)--which embodied in

the HTS Section 213(d) of the CBERA, as amended (19 U.S.C. 2703(d))--as

HTS general note 7(g). See 63 FR 16608 of April 3, 1998. Pursuant to

the authority delegated by the President to USTR in Proclamation 6969,

the annex to this notice makes a technical correction to HTS general

note 7(g) in order to make the provision a complete sentence.

Prior to terminating this 301 action, the USTR consulted with the

domestic industry concerned regarding the modification and termination

of the existing action. An opportunity for public comment prior to this

action was not possible in view of the need for expeditious action.

Immediate termination of the Section 301 action was required to ensure

full and prompt implementation of measures taken by the Government of

Honduras to prevent resumption of piracy.

Interested members of the public are now invited to submit comments

to USTR regarding this action. USTR will review these comments upon

receipt.

Public Comments

Comments must be filed in accordance with the requirements set

forth in 15 CFR 2006.8(b) (55 FR 20593) and must be filed on or before

noon on July 31, 1998. Comments must be in English and provided in

twenty copies to: Sybia Harrison, Staff Assistant to the Section 301

Committee, Room 223,

[[Page 35634]]

Office of the U.S. Trade Representative, 600 17th Street, NW,

Washington, DC 20508.

Comments will be placed in a file (Docket 301-116) 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 20 copies, and

must be accompanied by a nonconfidential summary of the confidential

information. The nonconfidential summary shall be placed in the file

that is open to public inspection. Copies of the public version of the

petition and other relevant documents are available for public

inspection in the USTR Reading Room. An appointment to review the

docket (Docket No. 301-116) may be made by calling Brenda Webb (202)

395-6186. The USTR Reading Room is open to the public from 9:30 a.m. to

12 noon and 1:00 p.m. to 4:00 p.m., Monday through Friday, and is

located in Room 101.

Susan G. Esserman,

Acting United States Trade Representative.

Annex

The Harmonized Tariff Schedule of the United States (``HTS'') is

modified as set forth below with respect to articles entered, or

withdrawn from warehouse for consumption, on or after the effective

specified for the enumerated actions:

1. With respect to articles both: (i) imported on or after January

1, 1976, and (ii) entered, or withdrawn from warehouse for consumption,

or on after June 30, 1998:

(a). General note 4(d) of the HTS is modified by deleting the

following subheadings and the country set out opposite them: 0707.020

Honduras; 0707.00 Honduras; 0807.11.30 Honduras.

(b). For the following subheadings, the Rates of Duty 1--Special

subcolumn is modified by deleting the symbol ``A*'' and inserting an

``A'' in lieu thereof: 0707.20; 0707.00; 0807.11.30.

2. With respect to articles entered, or withdrawn from warehouse

for consumption, on or after June 30, 1998.

(a). General note 7(d) of the HTS is modified by:

(i). in subdivision (ii) deleting ``of the CBERA;'' and inserting

``of the CBERA; or'' in lieu thereof;

(ii) in subdivision (iii) deleting ``provided for in this note;

or'' and inserting ``provided for in this note.'' in lieu thereof; and

(iii). deleting subdivision (iv).

(b). For the following subheadings, the Rates of Duty 1--Special

subcolumn is modified by deleting the symbol ``E*'' and inserting an

``E'' in lieu thereof: 0707.00.20; 0707.00.40; 0807.11.30; 2402.10.60.

3. With respect to articles entered, or withdrawn from warehouse

for consumption, on or after the April 20, 1998, general note 7 to the

HTS is modified by deleting subdivision 7(g) and inserting the

following new subdivision 7(g) in lieu thereof:

``(g) The duty-free treatment provided under the CBERA shall not

apply to any agricultural product of chapters 2 through 52, inclusive,

that is subject to a tariff-rate quota, if entered in a quantity in

excess of the in-quota quantity for such produce.''

[FR Doc. 98-17485 Filed 6-26-98; 12:56 pm]

BILLING CODE 3190-01-M