US estimates 80 million CDs are illegally copied in Ukraine
The US has accused the Ukraine of failing to impose tough enough penalties on those caught pirating copyrighted music.
The US estimates tens of millions of CDs are illegally copied each year in the Ukraine, costing the US music industry $200m (£141m).
It has imposed $75m (£53m) worth of sanctions, affecting trade in steel and other exports after interpreting new laid down laws as too "weak".
'No grounds'
But deputy prosecutor General Oleksiy Bahanets claims there are not the resources or equipment in the country to produce such a high amount of CDs.
He said a thorough investigation of five Ukrainian plants revealed there were "no grounds" to accuse them of issuing pirated CDs.
But he did admit some operators had the means to produce small amounts of illegal CDs.
While the Kiev government has attempted to launch an anti-piracy crackdown, the Ukraine parliament passed weaker legislation, including watered down regulations on licensing requirements and excluding from the measures CDs transported through the country.
Bootleggers
The US has not been alone in expressing its disquiet at Ukraine, whose flourishing bootlegging industry produces an estimated 80 million audio and video discs a year.
Record industry representatives from other countries have expressed similar complaints in the past.
And Ukraine is far from being the only country to have a problem with counterfeiters.
Since its entry into the World Trade Organisation, China has begun a crackdown on its own thriving bootleggers, while similar operations exist across the southern hemisphere.