Russia Poised to Shutter AllofMP3 will likely be shut down by Russian authorities as part of its entrance into the World Trade Organization (WTO). But the site is fighting back, providing a legal argument for its continued operation.

A document released by the Office of the United States Trade Representative seems to indicate that Russia and the US have come to an agreement that would remove one of the biggest roadblocks to its entry into the WTO - intellectual property rights.

In addition to the apparent imminent closure of AllofMP3, Russia has also agreed to take steps to fight optical disc piracy, strengthen criminal penalties and border enforcement against piracy and counterfeiting, and bringing intellectual property rights in line with WTO standards.

Russia has agreed to pass laws that would meet these requirements by June 1, 2007. Among those would be laws to prevent societies operating within the country from collecting royalty fees from websites without consent of the rights holder.

AllofMP3 has regularly defended its operation by claiming it has licenses from Russian Multimedia and Internet Society (ROMS) and the Rightholders Federation for Collective Copyright Management of Works Used Interactively (FAIR).

However, neither the U.S. nor Britain recognize those licenses, and organizations such as RIAA and MPAA have refused to accept payments from either organization.

The US government document specifically singles out the site as a target: "The United States and Russia agreed on the objective of shutting down websites that permit illegal distribution of music and other copyright works. The agreement names the Russia-based website as an example of such a website."

In a new twist, AllofMP3 parent company Mediaservices has shot back, claiming it operates within the confines of Russian and US law in a statement on Tuesday, and saying RIAA CEO Mitch Bainwol is deliberately trying to mischaracterize the site.

According to the statement, AllofMP3 is legal under Articles 44 and 45 of the Russian constitution, and under U.S. statutes such as 17 U.S.C. sections 602(a), 1008, 1001, 109, 107, 117 among others. Points in the law including the "iPod" and Fair Use provisions make it legal, it argued.

"If the RIAA had done its homework, it would have discovered that even under U.S. law, consumers apparently have a legal basis to purchase music from AllofMP3," said Vadim Mamotin, Director General of Mediaservices. "There is absolutely no legal basis for the campaign against AllofMP3."

The company also argued that RIAA has no jurisdiction within Russia, and that U.S. laws do not apply within the country. Mediaservices also pointed to the fact that it has been offering record labels the option to have their content removed, but it has heard nothing from neither the labels nor the Russian licensing societies.

"Perhaps, opt-out requests are not being made because the record labels can't clear the rights," it chided.

Still, strong words may not be enough to save the company, as Russia is intent on joining the WTO and says it is working to fix the lack of intellectual property controls in the country.

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