Business Week reports that copyright fraud is alive and well and proudly living in Russia (mind you, this isn't like NAPSTER, where music was GIVEN away SONG by SONG, this is SELLING whole albums for profit -- no wonder Russia and its bosom pal China lead the world in copyright thievery, and no wonder Russia can't develop any orginal material of its own):

Russia music Web site upsets music execs

A Russian Web site that lets visitors download albums for less than US$1 (euro0.79) is a smash hit with music fans -- but not with U.S. trade and music industry officials.

The site is a pirate, they allege, and say Russia's failure to close it down presents a direct obstacle to the country's negotiations to join the World Trade Organization.

The site, they allege, amounts to a haven for music pirates. They say it presents a direct obstacle to Russia's negotiations to join the World Trade Organization. Russia is already the second-biggest source of pirated music film and software in the world after China -- costing U.S. companies nearly US$1.8 billion (euro1.4 billion) last year, according to anti-piracy groups. The Web site -- Allofmp3.com -- just adds to the dispute.
The site's knockdown prices make it a strong draw.

Apple Computer Inc.'s iTunes Music Store, which is the world's most popular online store licensed by the industry, charges 99 cents (80 euro cents) per song, but the Russian site offers tracks for a tenth of that price.Songs from new albums by popular rock groups cost between 10 and 16 cents (8 and 13 euro cents). The whole of one top new album can be had for US$1.40 (euro1.10).

According to a report by the Britain-based IXN data company, which compared traffic volumes of Web sites offering music downloads, Allofmp3 leapfrogged U.S. online music store Napster over the first half of the year to make it the second most popular music site in the U.K. after iTunes.

But popular or not, the site is already under criminal investigation by Russian prosecutors and has been picked out by the U.S. Trade Representatives Office as an example of Russia's bad record on tackling piracy."The United States is seriously concerned about the growth of Internet piracy on Russian web sites," Neena Moorjani, chief spokeswoman for the Office of the United States Trade Representative, said Friday. She called Allofmp3 "the world's largest server-based pirate Web site."

"Russia's legal framework for intellectual property rights protection must meet WTO requirements ... In that context, we continue to call on Russia to shut down Web sites that offer pirate music, software and films for downloading," she said.

The site warns users to check to make sure they are not violating the laws of their country before downloading songs and insists its mother company -- MediaServices -- is fully licensed to operate under Russian law.

"MediaServices pays license fees for all materials downloaded from the site subject to the Law of the Russian Federation," the site says, citing an agreement with the Russian Multimedia and Internet Society. That group, which goes by the acronym ROMS, says it collects and distributes royalties for online use of copyrighted music. It claims that under Russian copyright law, it does not need permission from copyright holders to license the sale of music on the Internet.

"What can I say -- this has to be decided by a court and no court has said this is illegitimate," ROMS general director Oleg Nezus told The Associated Press. "... Believe me -- I'm a lawyer, you have to understand the law as a whole."

But Igor Pozhitkov of the International Federation of the Phonographic Industry, which represents Western recording companies such as Universal, Sony and EMI, says Nezus is reading the law selectively.

According to IFPI's lawyers, agencies such as ROMS do not need to seek permission from rightholders if they are licensing the broadcast, performance or transmission of works by cable -- but they do if it concerns their sale over the Internet.

"They (ROMS managers) are using this as a money machine," Pozhitkov said. "Hopefully they will defend it for a while and then disappear."

Allofmp3.com provides no phone numbers, and questions emailed to addresses listed on the site went unanswered