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The costs of intellectual property violations in Israel reached $450 million in 2006, similar to the amount lost in 2005, according to a report prepared by the U.S. Commerce Department. The report was given to the Israeli government recently in advance of the publication of the rankings of countries that violate intellectual property rights. The report is expected to be made public at the end of the month.

Israel is expected to remain on the watch list of those countries that seriously violate such rights, as there was no real improvement in the situation over the past year, and no talks were held over the matter. Government sources feel that the situation will only change when Israel will be on the verge of joining the OECD, since then it will be required to make its laws line up with those of the EU and the U.S. in regards to intellectual property. The major stumbling block is pharmaceuticals. The U.S. objects to the Israeli law passed a year and a half ago relating to drug patents.