>as a condition for the import, distribution, sale or use of such software, or of products containing such software, in its territory.
>This part of the sentence limits the application of the rest of the paragraph to software that crosses the border into the country in some way or another.
No, the word "or" is the operative one here. So if you deleted the word "import", it wouldn't matter. Yes, the law applies to imported software, but it also applies to any software which is distributed in its territory, or sold in its territory, etc. No border-crossing is necessary.
No, I'm not ignoring it. I'm simply not addressing it. I am specifically addressing the fact that in the case of "import, distribution, or sale of...", it is incorrect to interpret that to mean that it only applies to imported software. It applies to essentially all software.
>This part of the sentence limits the application of the rest of the paragraph to software that crosses the border into the country in some way or another.
No, the word "or" is the operative one here. So if you deleted the word "import", it wouldn't matter. Yes, the law applies to imported software, but it also applies to any software which is distributed in its territory, or sold in its territory, etc. No border-crossing is necessary.