The International Federation of the Phonographic Industry (IFPI) said Ukraine was eastern Europe's "new piracy trouble spot." Ukraine harboured Europe's fastest-growing CD pirate industry, estimated to be costing record companies more than $125 million a year, IFPI said.

IFPI drew attention to the problem in a letter to acting European Foreign Affairs Commissioner Hans van den Broek before an EU-Ukraine summit to be held in Kiev on Friday.

In the letter, IFPI says the EU should urge Ukraine "in the strongest terms" to take all necessary steps to halt illegal CD production and export, which it said was seriously disrupting markets throughout the region, including the EU.

"Ukraine wants to participate in the world's trading community, to join the WTO (World Trade Organisation) and to enjoy closer links with the EU," IFPI Chairman and Chief Executive Jason Berman said in a press statement.

"The message to be conveyed to the Ukraine government is that failing to provide the proper copyright protection and allowing its CD plants to swamp the world with illegal CDs seriously jeopardises these objectives," he said.

Stefan Krawczyk, senior adviser on international trade for IFPI, told Reuters that the European Commission had promised to raise the issue of pirated CDs with Ukraine.

Ukraine's President Leonid Kuchma will meet Finland's Prime Minister Paavo Lipponen and Commission officials on Friday.

IFPI said pirate CD manufacturing in Ukraine dwarfed levels seen in Bulgaria, which it called Europe's previous piracy black spot, two years ago.

It said much of Bulgaria's pirate manufacturing had moved to Ukraine, which now had an estimated production capacity of 70 million optical discs, including CD-Roms and video CDs.

This was more than twice the level of estimated legitimate demand in the entire region of central and eastern Europe, it said.

The trade group said about one million pirate CDs, made in Ukraine, had been seized on the Russian-Belarus border in the last few weeks and 34,000 Ukraine-made pirate CDs had been seized on the northeast Italian border recently.

Pirated CDs had been seized of recordings by well-known artists such as Robbie Williams, Roxette, Elton John, George Michael and Luciano Pavarotti, it said.

Traffic in pirated CDs was coordinated through sophisticated cross-border trading networks and there was evidence that organized crime was involved, it said.

In its letter to van den Broek, IFPI called for Ukraine to introduce legislative reforms to strengthen copyright protection of recordings, to introduce tougher criminal penalties to deter piracy and to give police and customs greater powers to act against pirates.

It also called for the introduction of new government CD plant regulations, including compulsory use of identification codes by CD manufacturers. IFPI said it planned to open a new office in Kiev to help Ukraine authorities fight piracy.

Reuters/Variety