AllofMP3.com, the Russia-based digital download service that has drawn the ire of the music industry, is facing an expiration date.

In order to ensure its long-awaited entry into the World Trade Organization (WTO), the Russian government has agreed to shut down the maverick digital retailer, according to a document released by the Office of the United States Trade Representative.

But the site's operators continue to insist on its legality in the face of accusations from the global music industry, issuing a statement today saying that AllofMP3.com is legal under Russian law and is not subject to US law.

The standoff between the site and the music industry has intensified through most of 2006, as major record labels in the US and the UK have called for the Russian government to shut it down. Credit card giants Visa and Mastercard have yanked payment support as well.

AllofMP3.com charges customers for downloads but at hugely discounted rates from the industry standard of 99 cents per song, with most songs available for less than 10 cents.

The US government has made Russia's entry into the WTO contingent upon AllofMP3.com's shutdown, additional antipiracy measures, and bringing intellectual property rights in line with WTO standards. The US trade representative document indicates that Russian has "agreed on the objective of shutting down websites that permit illegal distribution of music and other copyright works," naming AllofMP3.com specifically.

Russia has also agreed to prevent societies operating within the country from collecting royalty fees from Web sites without consent of the rights holder. Two of those societies, the Russian Multimedia and Internet Society (ROMS) and the Rightholders Federation for Collective Copyright Management of Works Used Interactively (FAIR), have been cited as AllofMP3.com as protecting its legality. The site says it pays those societies royalties, but the major labels have not granted those groups from doing so on their behalf.

Russia has agreed to pass all of the laws that would meet these requirements by June 1, 2007.

But the site is fighting back, providing a legal argument for its continued operation. Parent company Mediaservices issued a statement saying that it operates within the confines of Russian and US law and that Recording Industry Association of America CEO Mitch Bainwol is deliberately trying to mischaracterize the site.

"If the RIAA had done its homework, it would have discovered that even under US law, consumers apparently have a legal basis to purchase music from AllofMP3," said Vadim Mamotin, Director General of Mediaservices, in a statement. "There is absolutely no legal basis for the campaign against AllofMP3."

The company also argued that the RIAA has no jurisdiction within Russia, and that US laws do not apply within the country. Mediaservices also pointed to the fact that it has been offering record labels the option to have their content removed, but it has heard nothing from neither the labels nor the Russian licensing societies.

"Perhaps, opt-out requests are not being made because the record labels can't clear the rights," it stated.

Stay tuned.