VZCZCXRO4649
PP RUEHLN RUEHVK RUEHYG
DE RUEHKV #2265/01 3241131
ZNR UUUUU ZZH
P 191131Z NOV 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 6743
INFO RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUCPDOC/USDOC WASHDC
RUCNCIS/CIS COLLECTIVE
RUEHSF/AMEMBASSY SOFIA 0040

UNCLAS SECTION 01 OF 03 KYIV 002265 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/UMB AND EB/TPP/IPE 
STATE PLEASE PASS TO USTR FOR BURKHEAD/GROVES 
USDOC FOR 4201/DOC/ITA/MAC/BISNIS 
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYCK 
SOFIA FOR MLAMBERTI 
 
E.O. 12958: DECL: N/A 
TAGS: ETRD KIPR ECON UP
SUBJECT: UKRAINE: IPR ENFORCEMENT COOPERATION GROUP 
ADDRESSES COUNTERFEIT AGRICULTURAL CHEMICALS 
 
REF: KYIV 821 and previous 
 
¶1. (SBU) Summary: GOU, Embassy, and industry 
representatives discussed efforts to combat counterfeit 
agrochemicals at a November 14 IPR Enforcement Cooperation 
Group (ECG) meeting.  Constructive GOU-industry dialogue on 
this topic continued several days later under the auspices 
of the European Business Association.  GOU interlocutors 
recognized the danger presented by counterfeit 
agrochemicals and expressed a desire to improve 
enforcement.  The GOU remained tight-lipped regarding a 
major seizure made two years ago, however, and we pressed 
the government to be more transparent with industry on such 
cases.  Ukraine does not yet have an effective procedure 
for destroying counterfeit agrochemicals, but GOU officials 
at least identified the agency with overall responsibility. 
GOU reps also recognized the need to increase transparency 
in granting agrochemicals market approval.  Post will 
consider further steps to encourage improved enforcement in 
this area.  End Summary. 
 
¶2. (U) On November 14 Ukraine's State Department of 
Intellectual Property (SDIP) hosted the eighth meeting of 
the IPR Enforcement Cooperation Group (ECG), with 
participation of numerous industry representatives. (Note: 
See reftel for previous ECG meetings.  End Note.)  This ECG 
meeting focused on combating counterfeit agricultural 
chemicals.  The European Business Association followed up 
on November 18 with a roundtable of its own on the same 
topic. 
 
¶3. (U) The following is a list of key participants in the 
ECG meeting: 
 
GOU 
--- 
Valentin Chebotaryov - Deputy Chairman, SDIP 
Iryna Vasylenko      - Head of Enforcement Division, SDIP 
Olena Shcherbakova   - Head of European Integration and 
                       Int'l Cooperation Division, SDIP 
Yuriy Shafray        - Head of IPR Division, Ministry of 
                       Internal Affairs 
 
Industry 
-------- 
Svetlana Matveyeva   - DuPont 
Alexey Filatov       - Vasil Kisil & Partners Law Firm 
                       (handling DuPont patent cases) 
Maurice de Billot    - Monsanto 
Olena Fomina         - Monsanto 
Sergey Lobov         - Dow AgroSciences 
Valentina Nesina     - BASF 
Natalia MacMaithghon - Pakharenko & Partners Law Firm 
                      (representing CropLife International) 
 
Counterfeit Agrochemicals - A New Priority 
------------------------------------------ 
 
¶4. (U) Chebotaryov and Deputy Econ Counselor noted that the 
issue of counterfeit agrochemicals was a new one for the 
ECG.  Deputy Econ Counselor stressed that, while the 
problem was a complex and challenging one, the GOU could 
make significant progress if it worked closely and 
constructively with industry. 
 
¶5. (U) Shafray gave a short briefing on recent cases 
involving counterfeit agrochemicals, noting that such cases 
had become more of a priority for law enforcement given the 
clear threat to the environment and plant, animal, and 
human health.  Police had launched 15 criminal cases over 
the last two years involving distribution of illegal 
agrochemicals and had also detected some illegal 
production, albeit in relatively small amounts.  Shafray 
noted that police could hold suspected counterfeit products 
for only 24 hours and said that help from industry in 
conducting analysis was therefore critical. 
 
"Uzin Case" - Mum's the Word 
---------------------------- 
 
¶6. (SBU) Fomina and de Billot asked for an update on the 
status of the large seizure of counterfeit agrochemicals 
 
KYIV 00002265  002 OF 003 
 
 
made in 2006.  (Background Note: In 2006, the GOU stopped 
and seized a shipment of approximately 500 metric tons of 
counterfeit agrochemicals, with a potential sales value of 
$2.5 million, from China.  The shipment contained fake 
products of several international companies, including 
Monsanto, Dow, and DuPont.  The seized goods were initially 
held at a facility in the city of Uzin, but there were soon 
rumors that part or all of the shipment had "disappeared," 
presumably sold off by corrupt government officials.  The 
GOU was slow to provide details, although law enforcement 
officials told us informally that the State Security 
Service (SBU) had taken possession of the seized goods and 
was conducting an investigation.  Recently, industry reps 
heard rumors that what was left of the shipment was moved 
to a different facility in the city of Shostka.  End Note.) 
 
¶7. (SBU) Chebotaryov and Shafray said that they were unable 
to discuss the details of the case, but at least confirmed 
that the SBU was in fact responsible.  Econoff noted that 
an SBU official had attended almost every other ECG 
meeting, and lamented his absence.  Econoff also emphasized 
that the GOU needed to open a more serious dialogue with 
industry on this case in order to make progress. 
Chebotaryov responded that SDIP would circulate a report on 
the ECG meeting to other agencies, including the SBU, and 
would encourage the SBU to be more forthright in providing 
information on the case. 
 
¶8. (U) Marek Luczak, head of Syngenta's Kyiv office and 
Chairman of the European Business Association's 
Agrochemical Committee, delivered a similar message at the 
November 18 roundtable, urging the GOU to be more open in 
providing details on seizures. 
 
Destruction 
----------- 
 
¶9. (U) Chebotaryov noted that legislation passed as part of 
WTO accession gave the GOU the necessary authority to 
destroy counterfeit goods and commented that the GOU was 
still working out how destruction would work in practice. 
(Note: The GOU has a fairly effective procedure in place to 
destroy optical discs, but destruction of other goods, 
particularly potentially dangerous chemicals, has proved 
more challenging.  End Note.) 
 
¶10. (U) Shafray and Chebotaryov clarified that, once a 
court issued the appropriate ruling, the State Executive 
Service (SES), under the Ministry of Justice, took 
responsibility for destruction of all counterfeit goods. 
In the case of chemicals, said Shafray, the SES would rely 
on experts from the Ministry of Environment, Agriculture, 
and other related agencies, but the SES remained the 
responsible agency.  (Note: Ukraine's capacity to destroy 
agrochemicals remains quite limited, with only two capable 
facilities in the entire country, and the GOU often has to 
send chemicals to a third country for destruction.  End 
note.)  Fomina noted that destruction of agrochemicals can 
be quite expensive and expressed concern that such costs 
could prevent progress. 
 
¶11. (U) At the November 18 roundtable, Oleksandr Sokolov 
from the Ministry of Environment and Alexey Filatov, a 
lawyer for DuPont, said that the Law on Agrochemicals and 
corresponding implementing regulations needed amendment to 
clarify the procedures for destroying counterfeit 
agrochemicals.  Other participants agreed but argued that 
the GOU already had sufficient legal authority to improve 
IPR enforcement in this area right away. 
 
Patent Linkage 
-------------- 
 
¶12. (U) Fomina and Matveyeva complained that patent linkage 
for agrochemicals remained weak and urged SDIP's patent 
authorities to coordinate more closely with agencies at the 
Ministries of Environment and Agriculture responsible for 
granting market access.  Chebotaryov accepted the criticism 
but noted that the GOU had to be careful in stopping 
registration of suspected patent-infringing products.  If 
such agrochemicals later proved not to be patent- 
infringing, he said, the producer could sue the government, 
 
KYIV 00002265  003 OF 003 
 
 
or launch an unfair competition case. 
 
¶13. (U) Industry reps argued that the agencies responsible 
for granting market access could at least do a better job 
of publicizing registration applications, so that patent 
holders would have more time to address the courts. 
Vasylenko agreed that the GOU agencies could revise their 
procedures to increase transparency and said she would 
reach out to them. 
 
Comment: SDIP Struggling to Coordinate 
-------------------------------------- 
 
¶14. (SBU) The poor attendance from key GOU agencies at this 
ECG meeting was concerning.  SDIP is supposed to serve as 
the policy coordinating body for IPR issues, and we have 
invested heavily, with mostly positive results, in building 
SDIP's capacity.  Chebotaryov suggested that a follow-up 
meeting, if deemed necessary, be hosted by the Embassy in 
an effort to raise the meeting's profile and attract better 
GOU attendance.  Indeed, following the meeting, 
Shcherbakova revealed frustration that so many other 
agencies had apparently ignored SDIP's request that they 
attend.  End Comment. 
 
TAYLOR