International Trade News. September-November 2013

I. UKRAINE & WTO

New Director-General of WTO|1|

On 1 September 2013 Roberto Carvalho de Azevêdo (Brazil) began his term of office as the sixth WTO Director-General. Just to remind: on 14 May 2013 the WTO General Council approved the appointment of Mr. Azevêdo as the next Director-General of the WTO to a four-year term.

Japan filed a complaint against Ukraine in WTO|2|

On 30 October 2013 Japan requested consultations with Ukraine on the safeguard duties imposed by Ukraine in respect of the import of cars. In its request for consultations, Japan complains of the allegedly inconsistent actions of Ukraine under the Agreement on Safeguards and the GATT 1994. In particular, it alleges that Ukraine failed to immediately notify the Committee on Safeguards and to provide adequate opportunity for prior consultations with WTO members. Furthermore, Ukraine did not publish a report on its findings, did not provide detailed analysis and reasoned conclusions in the case under investigation, and applied the safeguard measures two years after the expiration of the investigation period. Japan also considers that the measure imposed by Ukraine was in excess of the reasonable level necessary to prevent or remedy serious injury. On 13 November 2013 the European Union requested to join the consultations. On 14 November 2013 the Russian Federation requested to join the consultations.

WTO dispute settlement between the EU and the Russian Federation|3|

On 25 November 2013 the Dispute Settlement Body established a Panel requested by the European Union to consider the case on the recycling fee on motor vehicles in Russian Federation. Ukraine, among the other states, reserved its third-party rights to participate in the Panel’s proceedings. Just to remind: on 9 July 2013 the EU requested consultations with the Russian Federation regarding its measures relating to the so?called “recycling fee” imposed on motor vehicles. The EU claims that the measures appear to be inconsistent with provisions of the GATT 1994 and the TRIMs Agreement.

II. REGIONAL TRADE LIBERALIZATION

EU-Singapore FTA is signed|4|

On 20 September 2013 the EU and Singapore signed the Free Trade Agreement. The EU-Singapore FTA provides not only cancellation of duties, but also deals with the procurement and financial services, coordinating technical standards, etc.

Canada has suspended negotiations on the free trade area with Ukraine|5|

As the Embassy of Ukraine in Canada noted, negotiations were suspended due to the application of Ukraine for the review of the WTO schedule of duties under Article XXVIII of the GATT 1994. It is considered that such a measure is preliminary and may be terminated in future. Further negotiations will continue only upon the withdrawal of the application.

III. TRADE DEFENSE REMEDIES

Anti-dumping investigation by the Eurasian Economic Commission on imports of steel bars from Ukraine|6|

On 20 November 2013 the Eurasian Economic Commission (“EEC”) started an anti-dumping investigation related to import into the customs territory of the member-countries of the Customs Union of steel bars originating from Ukraine. The Notification "On Commencement of an Anti-Dumping Investigation on Bars Originating from Ukraine Imported into the Common Customs Territory of the Customs Union" was approved by the Order of the Director of the Department on Internal Market Protection of the EEC of 20 November 2013. According to the Notification the investigation was initiated by EVRAZ United West Siberian Metallurgical Plant, the Nizhneserginsky Hardware Metallurgical Plant, the Chelyabinsk Metallurgical Plant, the Severstal and the Magnitogorsk Metallurgical Plant, which have a total share of 65.9 % of the production of metal bars in the Customs Union.

New decisions of the Interdepartmental Commission on International Trade

In autumn 2013 the Interdepartmental Commission on International Trade (the "Commission") adopted the following decisions:

• Decision No. АД-304/2013/4423-06 of 25 November 2013, under which the Commission initiated an anti-dumping investigation related to import into Ukraine of rubber conveyor belts classified under UCG FEA code 4010 12 00 10 and originating from the Russian Federation. In accordance with the Notification “On Initiation and Conducting the Anti-dumping Investigation related to Import of Rubber Conveyor Belts Originating from the Russian Federation”|7| the investigation was initiated under the results of the analysis of a complaint submitted by LLC Arlite. According to the Notification within the period from June 2012 to May 2013 the rubber conveyor belts originating from the Russian Federation were sold at the market of Ukraine at the lower price than on the market of the Russian Federation which leads to the conclusion that there was dumping. The Notification was published in the newspaper "Yryadovy Courier" of 28 November 2013;
• Decision No. AD-303/2013/4423-06|8| of 25 November 2013, under which the Commission initiated expiry review of the anti-dumping measures applied to import into Ukraine of turnouts originating from the Russian Federation. In accordance with the Notification “On Initiation and Conducting the Expiry Review of Anti-dumping Measures on Import of Turnouts Originating from the Russian Federation”, the review was initiated under the results of the analysis of a complaint submitted by the Ukrainian manufacturer – LLC Kerch Turnouts Plant. The Notification was published in the newspaper "Yryadovy Courier" of 28 November 2013;
• Decision No. AD-302/2013/4423-06 of 2 October 2013 "On the Extension of Force of Anti-Dumping Measures on Imports into Ukraine of Electric Filament Lamps for General Purposes Originating in the People's Republic of China", under which the Commision decided to extend the force of anti-dumping measures applied by the Commission’s Decision No. AD-137/2006/143-36 of 14 July 2006 "On the Application of Definitive Anti-Dumping Measures on Imports into Ukraine of Electric Filament Lamps for General Purposes Originating in the People's Republic of China" for the term of five years. The relevant official Notification|9| was published in the newspaper "Yryadovy Courier" of 4 October 2013;
• Decision No. AD-301/2013/4423-06 of 2 October 2013, under which the Commission decided to extend to 16 months the period of the anti-dumping investigation on imports of polyvinyl chloride suspension in Ukraine originating from the United States of America, which was initiated by the Commission’s Decision No. AD-283/2012/4423-08 of 10 September 2012. The relevant official notification|10| was published in the newspaper "Yryadovy Courier" of 4 October 2013.

IV. CUSTOMS RELATED ISSUES

Introduction of the institution of authorized economic operator

The Draft Order “On Granting a Company the Status of an Authorized Economic Operator” was published at the official site of the Ministry of Incomes and Fees of Ukraine|11|. The status of an authorized economic operator shall entitle the companies to special exemptions provided by the Customs Code of Ukraine. In particular, the companies will have the right to declare the customs value providing the reduced list of documents, place goods in storage without interference of customs service, unload the goods, remove seals, etc. In order to receive the status of the authorized economic operator, the company shall have to meet certain criteria, namely, the term of operation in the sphere of foreign economic activity shall be not less than three years, the company shall satisfy the requirements on accounting, solvency and safety standards, etc.

V. AGRICULTURE

The government offered to terminate the mandatory internal certification of grain|12|

8 October 2013 the Committee of the Parliament of Ukraine on the Agrarian Policy and Land Relations recommended the Parliament of Ukraine to adopt the Draft Law “On Amendments to the Law of Ukraine “On Grain and the Market of Grain in Ukraine” No.3140 of 29 August 2013. The provisions of this draft provide for simplification of the procedure of grain certification. In particular, it is proposed to terminate the requirement on mandatory internal grain certification during their shipment to grain elevators. Grain certification will only be required in ports for the purposes of exportation. Adoption of this Law will advance the process of deregulation of agrarian market, in particular: it will allow to reduce the cost of grain logistics and the time of shipment.

The government adopted the Strategy for development of the agrarian sector up to 2020|13|

On 17 October 2013 the Cabinet of Ministers of Ukraine adopted the Order “On Approval of the Strategy for the Development of the Agrarian Sector of Economy up to 2020” No. 806-r of 17 October 2013. It is expected that the Strategy will allow increasing the total output of the agriculture sector up to 1.3 times and increasing exportation of food products up to 4 % annually. It also provides for the stimulation of investments, technological modernization, recovery of the irrigation systems in the south of Ukraine and support of minor producers. The Strategy addresses not only economical issues but also social ones and is expected to increase incomes of residents of rural areas.

VI. PHARMACEUTICALS

Amendments to the License Conditions of Importing Medicinal Products

The Order of the Ministry of Health of Ukraine “On Approval of Amendments to the License Conditions of the Business Activity of Importing Medicinal Products” No. 960 of 08 November 2013|14| entered into force on 1 December 2013. The Order terminated the Order of the Ministry of Health of Ukraine “On Approval of Amendments to the License Conditions of the Business Activity of Importing Medicinal Products” No. 453 of 30 May 2013 and introduced the following amendments. Annexes 10 and 11 are included into the Licensing Conditions. Annex 10 provides for a list of information to be contained in the importers profile which shall be attached to the application for the license for business activity on importing medicinal products. It is required that the production of medicinal products imported in Ukraine shall be in compliance with the requirements on the good manufacturing practice. Compliance verification will be carried out under the rules of the Order of the Ministry of Health of Ukraine No. 1130 of 27 December 2012. Annex 11 provides for the information to be contained in the license for the sale of medicinal products. Furthermore, the Order obliges the importer to develop the pharmaceutical quality system which shall include the good manufacturing, distribution, storage and quality risks management practice. Chapter III of the Licensing Conditions sets forth the special requirements for the storage premises.

Control over compliance with the licensing conditions for importing medicinal products

The Order of the Ministry of Health of Ukraine “On Approval of the Procedure of Control over Compliance with the Licensing Conditions of the Business Activity of Importing Medicinal Products” No. 835 of 26 November 2013|15| entered into force on 1 December 2013. The State Administration of Ukraine on Medicinal Products and its local departments will execute the compliance control by holding inspections. The term of a scheduled inspection may not exceed 15 working days or 5 working days for small enterprises (10 working days and 2 working days accordingly in case of extraordinary inspections). The officials of the inspecting body will only have the right to carry out the inspection in case they have a certificate for such inspection and the service certificate. The Order provides the list of documents and conditions which may be verified during inspection, inter alia, importer’s profiles, registration certificates, presence of unregistered medicinal products, compliance with the storage requirements, etc. The importer, having received the order for elimination of gross violations of licensing conditions, shall terminate importation of the relevant medicinal products upon elimination of such violations. Importation shall be resumed only after written consent of the licensing body.

New technical regulations for medical devices

On 2 October 2013 the Cabinet of Ministers of Ukraine adopted the Resolution “On Approval of the Technical Regulation for the Medical Devices” No. 753|16|, the Resolution “On Approval of the Technical Regulation for the Medical Devices for in vitro examination” No. 754|17|, and the Resolution “On Approval of the Technical Regulation for the Active Implanted Medical Devices” No. 755|18|. All Resolutions will come into force on 1 May 2014 and terminate the previously adopted and effective acts in this sphere. The requirements of the said Resolutions concern the development and production of medical devices; their clinical examinations; language of information provided to the consumer; conformity assessment procedure; labelling with the national conformity mark, etc. The State Administration of Ukraine on Medicinal Products will be responsible for control over compliance with these requirements.

Amendment to public regulation of prices for medicinal products

On 8 November 2013 the Draft Law “On Making Amendment to Article 54 of the Principles of Legislation for Public Health in Ukraine Concerning Public Regulation of Prices for Medicinal Products” No. 3583|19| was registered to the Parliament of Ukraine. According to the Draft Law the Cabinet of Ministers of Ukraine will regulate prices for medicinal products establishing margin levels for extra charges with regard to the daily amount of consumption recommended by the World Health Organization and the reference prices for such products.

Amendments to the procedure of public registration of medical equipment and medical devices

On 28 October 2013 the Draft Resolution of the Cabinet of Ministers of Ukraine “On Amending the Procedure of Public Registration of Medical Equipment and Medical Devices”|20| was published at the official website of the Ministry of Health of Ukraine. It will grant the individuals and entities the right to apply for public registration of medical equipment and medical devices in electronic form avoiding burdensome procedures. While applying in electronic form, the applicant will have to use his electronic digital signature. Application will have to be submitted through the official website of the State Administration of Ukraine on Medicinal Products and in accordance with the requirements for electronic document circulation in public bodies. The requirement to submit the copies of documents will be abolished. In addition, the Resolution of the Cabinet of Ministers of Ukraine “On Approval of the Procedure of Public Registration of Medical Equipment and Medical Devices” No. 1497 of 9 November 2004 will be terminated from 1 July 2014 under the Regulation of the Cabinet of Ministers of Ukraine “On Approval of the Technical Regulation for Medical Devices” No. 753 of 2 October 2013.

Introduction of the procedure for keeping the public register of medical products

On 20 November 2013 the Draft Order of the Ministry of Health of Ukraine “On Certain Issues of Keeping the State Register of Medicinal Products of Ukraine”|21| was published on the official website of the Ministry of Health of Ukraine. The Draft Order shall introduce the Procedure of Keeping the State Register of Medicinal Products of Ukraine. The public enterprise “Public Expert Centre of the Ministry of Health of Ukraine” will be appointed to be in charge of this activity, become a technical administrator of the Register, ensure its functionality, provide extracts from the Register upon applications of individuals or legal entities within the time-limit of 10 days after payment of the relevant fees. The Register shall be kept in electronic form; the Public Expert Centre of the Ministry of Health of Ukraine will, as well, ensure the functionality of the web site of the Register open for public access.

Technical regulation for cosmetic products

The Draft Resolution of the Cabinet of Ministers of Ukraine “On Adoption of the Technical Regulation for the Safety of Cosmetic Products”|22| was published at the official website of the Ministry of Health of Ukraine. The sphere of safety and quality of cosmetic products remained poorly regulated in Ukraine for a long time. The Draft Resolution introduces requirement on good manufacturing practice, which includes regulation of the production, personnel, premises, equipment, raw materials, packing, quality assessment, etc. Products, admitted to the market, shall be subject to safety examination. Registration profile for the products shall be kept by the responsible person. In case of new products, the responsible persons shall notify the Ministry of Health of Ukraine about these products prior to customs procedures or sale of such products. The Ministry of Health of Ukraine registers such products and provides notification registration certificate. The information on the safety of the products shall be public.

VII. FOOD PRODUCTS

Reforms in the sphere of safety and quality of food products|23|

The Draft Law “On Amendments to Certain Legal Acts of Ukraine for the Safety of Food Products” No. 3102 was drafted by the Ministry of Agrarian Policy and Food of Ukraine and submitted to the Parliament of Ukraine. The Draft Law is intended to eliminate drawbacks of the national system of public control in the sphere of food safety such as the activity of several public bodies with the similar powers and the absence of real liability of market operators for the breach of law in this sphere. It is also expected to introduce the principle ‘from farm to fork’ which is in compliance to the EU legislation.

The Draft Law provides for specification of some term definitions, in particular, the procedures of public veterinary and epidemiological expert examinations will be exempted from the system of sanitary measures; instead the procedures of “traceability” and “public registration of objects of sanitary measures” will be introduced. Also, the Draft Law stipulates new requirements in the sphere of labelling of food products, hygiene of premises, vehicles, personal hygiene of the staff of manufacturers.

The reform provides for redistribution of powers between certain public bodies. Thus, the Ministry of Health of Ukraine will continue to execute its powers and fix the appropriate level of health protection, the criteria of safety of food products, sanitary requirements, etc. The central public body will execute control over food products in catering companies. Another body will be responsible for control over compliance with the consumers’ protection rules. The main activity will be held by the Public Sanitary and Phytosanitary Service, which will control the safety of food products.

Sanitary requirements for dietary additives

On 6 November 2013 the Ministry of Health of Ukraine published the Draft Order “On Approval of Sanitary Requirements for Dietary Additives”|24|. The Draft Order will establish sanitary requirements for dietary additives, their labelling, and advertising and will provide for a list of vitamins and minerals approved for use in production of dietary additives. Vitamins and minerals, which will be not mentioned in the above list, may be used for production only if their use is allowed by international organizations or the EU. The labelling of dietary additives shall include the inscription “dietary additive”; the names of categories of nutrition substances; the quantity of the additive for daily consumption; recommendation not to exceed the daily amount; recommendation not to supplement the daily ration with the additive and recommendation to store the additive out of children reach. Labelling and advertising of dietary additives shall not state that additives can be used for prevention or treatment of any diseases.