----------------------------------- hbgator Wed 18 Oct, 2006 Russian music download site sends defiant message to US ----------------------------------- Russian music download site allofmp3.com insisted it was a legitimate business and said US accusations of piracy were merely an excuse to keep Russia out of the World Trade Organisation. "The US government is conveniently using allofmp3 as an issue to gain further concessions from Russia," said company boss Vadim Mamotin and other executives. "We operate under Russian law, we pay taxes in Russia and we pay royalties," they said in response to journalists' questions in an online news conference. Russia has campaigned for 12 years to join the WTO but the United States is still witholding its endorsement of Moscow's candidacy -- it is the only major economy that has not yet backed Russia's bid -- citing shortcomings in several key trade sectors. Moscow wants to join the organisation both for the prestige of membership and as a means to spur diversification in its own economy, still focused heavily on raw materials export. But US negotiators have repeatedly returned to the issue of the worldwide music sales of allofmp3.com -- protection of intellectual property being a major stumbling block in Russia's negotiations to join the club. US Trade Representative Susan Schwab has placed allofmp3.com on a "notorious markets" list and in a speech last month she accused Russian authorities of allowing the website to operate with impunity. The music site has a ready market outside Russia as well as at home, offering music tracks for as little as a third of a dollar and entire albums for two dollars, which compares with 99 US cents per track from iTunes. The website's executives denied Tuesday that the site had refused to pay royalties for its world-wide music sales. They said the company had paid royalties to a Russian music society, the Russian Organisation for Multimedia and digital Systems (ROMS), but the industry had refused to take such payments from the society. "ROMS has offered to pay the record companies the royalties they collected but has been rebuffed.... As we see it, the record companies really have an issue with ROMS and perhaps the Russian government," they said. They insisted the company would go from strength to strength, buoyed by the growth of the Internet, and that it was the record labels whose time was running out. "They are concerned with making money for themselves not the artists. In our opinion, we and the artists are better off dealing directly with each other. In fact we believe it is the future of the music industry," they said. The owner of the website, Denis Kvasov, has been battling a lawsuit in a Moscow court by the international music industry body IFPI. In a bid to allay US concerns, Russia's parliament gave preliminary approval last month to a strict new law on intellectual property rights that Deputy Prime Minister Dmitry Medvedev said would bring Russian in line with Western demands. But more widely, Russia's negotiations to join the WTO have been hampered by Washington's increasingly tough stance towards Moscow on the issue of Iran's nuclear programme. Russia is the only major world economy not in the World Trade Organisation. In Tuesday's news conference the website's executives refused to reveal details of the company's finances. The Kommersant daily estimated earlier the annual turn-over of allofmp3.com at between 25 million and 30 million dollars (20 million and 23 million euros).