The International Intellectual Property Alliance has kept Lithuania and Estonia on its recently released special watch list of countries with high levels of media piracy.
The alliance estimates that the motion picture, music and software industries lost a combined $11.3 million in Estonia and $11 million in Lithuania last year.
Estonia's losses are likely much higher, the alliance reported, because the estimate does not include losses attributed to entertainment software, 90 percent of which it believes is pirated.
According to the alliance's report, Latvia also has problems with piracy but less so than Lithuania or Estonia.
The alliance estimates 90 percent of the entertainment software, 60 percent of the music recordings and 69 percent of the business software in Lithuania is pirated.
It applauded Lithuania's legislative efforts to curb piracy but criticized its law enforcement and customs authorities for not giving the laws teeth.
Police and customs in both countries have conducted training programs, usually with help from abroad, but it has resulted in few arrests or seizures.
"The most persistent problem confronting the copyright industries in Lithuania continues to be the lack of any effective, on-the-ground enforcement, resulting in devastatingly high piracy levels," the report concludes.
"Failures by police, prosecutors and especially by customs officials to engage in effective domestic criminal enforcement are destroying the possibility of establishing legitimate markets for copyright materials in Lithuania," the report continued.
Sales of bootleg software and movies in open markets in Estonia is still a major concern, according to the report, but a looming problem is distribution via the Internet.
Estonia has one of the highest Internet penetration rates in Europe and pirated software sellers are starting to advertise online.
"There is very little retail piracy anymore because most piracy is operated out of private homes," the report reads. "As a result, the offering of illegal material over the Internet, which is then distributed by mail, has grown rapidly."
Marketing pirated discs and videocassettes online is starting to take hold in Lithuania as well, the report noted.
Police have reportedly been working with Internet service providers to remove the ads.
Estonia imports most of it from Russia and Ukraine, a large portion of which is shipped through Lithuania.
"Given its geographical location between Eastern and Western Europe and its totally ineffective border enforcement, Lithuania remains a major regional exporter of pirated material," the report reads.
Most of the material is produced in Russia, Ukraine and, more recently Belarus, according to the report. It is then shipped through Lithuania to Eastern, Central and Western Europe.
Lithuania's "porous" border with Belarus is the most popular entry point.
The biggest piracy problem in Lithuania is the bootlegging of music CDs and cassettes, which the alliance says is worse than ever, with organized crime becoming heavily involved.
Lithuania did not join the Geneva Phonograms Convention, an agreement aimed at curbing music copyright violations, until January 2000.
"Because it took so many years to join this treaty and to provide protection for foreign sound recordings, Lithuania became a haven for sound recording piracy during the 1990s and this remains a lingering problem," the report reads.
The International Intellectual Property Alliance is a private sector coalition formed in 1984 representing U.S. copyright-based industries.