International Trade News. June-August 2013
I. WTO news
Measures in response to Ukrainian safeguard measures on import of motor cars
On 11 June 2013 Turkey submitted the Notification|1| to the WTO Council for Trade in Goods on proposed suspension of concessions under Article 8.2 of the WTO Agreement on Safeguards in relation to safeguard duty on import of motor cars imposed by Ukraine. The suspension of concessions will be done in the form of increase of duties on walnuts (HS codes 0802.31 and 0802.32) originating from Ukraine. The Notification provides that the Government of Turkey reserves its right to effectuate the proposed suspension from 12 July 2013.
On 5 July 2013 the Russian Federation also submitted the Notification|2| to the WTO Council for Trade in Goods on proposed suspension of concessions under Article 8.2 of the WTO Agreement on Safeguards. The suspension of concessions will be done in the form of increase of duties on chocolate, sugar confectionery, float glass and coal originating from Ukraine. Under the Notification the Russian Federation reserves its right to make the proposed suspension effective from the date of the adoption of the relevant decision within the Customs Union.
Just to remind: On 14 March 2013 the Decision of the Interdepartmental Commission on International Trade “On Application of Safeguard Measures on Imports in Ukraine of Motor Cars Irrespective of Their Country of Origin and Export” No. СП-275/2012/4423-08 dated 28 April 2012 was published in the newspaper "Yryadovy Courier" and came into force on 14 April 2013.
Trade concerns raised against Ukraine|3|
On 11 July 2013 at the meeting of WTO Council for Trade in Goods some WTO members raised serious concerns over certain trade measures of Ukraine, namely:
- Japan, Australia, Korea, the EU, the Russian Federation, and Turkey expressed serious concerns about Ukraine’s safeguard duties on automobiles imposed in April 2013 without providing adequate opportunity for the prior consultations. Ukraine said that it imposed the safeguard duty after domestic auto production decreased by 78% and employment in the sector declined by 50%. It also said that it had fulfilled all the requirements of the WTO Safeguards Agreement.
- The EU and the USA expressed concerns about Ukraine’s import quota on coking coal. Ukraine said that the measure would expire in December 2013 and, in the meantime, Ukraine had increased the quota.
- With regard to Ukraine’s Article XXVIII of the GATT notification, the USA urged Ukraine to take into consideration the views of many WTO members (the ASEAN, the EU, Turkey, Canada, Japan, Mexico) and to abandon the renegotiation of its bound tariffs. Ukraine said that Article XXVIII of the GATT is a right regularly invoked by the WTO members and should not be seen as a protectionist measure. Ukraine also stated that its notification covered only 3% of its total tariff lines and that it will provide country-specific compensation.
The first WTO dispute against Russian Federation|4|
On 9 July 2013, the EU requested consultations with the Russian Federation regarding Russia's measures relating to the so?called “recycling fee” imposed on motor vehicles. According to the EU, the Russian Federation imposed the recycling fee only on imported motor vehicles. The EU claims that the measures appear to be inconsistent with provisions of the GATT 1994 and the TRIMs Agreement.
On July 2013 the USA, China, Japan, Turkey and Ukraine requested to join the consultations.
Two Decrees of the President of Ukraine were adopted
On 19 June 2013 the President of Ukraine adopted the Decree “On Regulations on Representative of Ukraine in the World Trade Organization” No.333/2013|5|and the Decree “On Regulations on Commissioner of Ukraine on Foreign Policy and Integration Processes” No. 334/2013|6|. The Decrees regulate in details the duties and authorities of the above mentioned officials. Under the Decree No. 333/2013 the representative of Ukraine in the WTO is authorized to participate in the work of the WTO bodies and represent the position of Ukraine in them; maintain formal contacts with the officials of the WTO and the representatives of the WTO member-states; participate in multilateral trade negotiations conducted within the WTO, etc. Under the Decree No.334/2013 the main tasks of the Commissioner of Ukraine on Foreign Policy and Integration Processes include preparation and submission of proposals to the President of Ukraine on overall direction and coordination of executive power to implement certain basic principles of the foreign policy of Ukraine in the sphere of foreign policy and European integration processes; regular informing the President of Ukraine on foreign and European integration processes, their influence on the foreign policy of Ukraine; performance on behalf of the President of Ukraine special missions concerning foreign policy and European integration processes, participation on behalf of the President of Ukraine in such missions.
Just to remind: Under the Decrees of the President of Ukraine No. 215/2013 and No.255/2013 Mr. Andryi Goncharuk was appointed as the Representative of Ukraine in the WTO and Mr. Konstyantyn Eliseev was appointed as the Commissioner of Ukraine on Foreign Policy and Integration Processes respectively.
II. REGIONAL TRADE LIBERALIZATION
Start of negotiations on the TAFTA|7|
On 17 June 2013 the start of negotiations on the Transatlantic Free Trade Area (TAFTA) between the USA and the EU was announced at the G8 summit in the Northern Ireland. The first round of negotiations was started on 8 July 2013 in Washington.
Just to remind: TAFTA will aim to go beyond the classic approach of removing tariffs and opening markets on investment, services and public procurement. If negotiations are successful, this EU-US agreement will be the biggest bilateral trade agreement ever negotiated.
The Free Trade Agreement between Ukraine and Serbia could be signed during the visit of the Prime Minister of the Republic of Serbia, Mr. Ivica Dacic, to Ukraine in autumn 2013. It was announced by the President of Ukraine, Mr. Viktor Yanukovych, speaking at the Ukrainian-Serbian business forum in Belgrade on 7 June 2013.
FTAs of Georgia and Armenia with EU
The European Commission announced that negotiations with Georgia|9| and Armenia|10| on the Deep and Comprehensive Free Trade Agreements with these states were successfully finished on 22 and 24 July 2013 respectively. As in the case of Ukraine, the FTAs are planning to be parts of the Association Agreements. The Agreements are planned to be initialed on the 3rd Eastern Partnership Summit in Vilnius in November 2013.
III. TRADE DEFENSE REMEDIES AND TRADE BARRIERS
Anti-dumping investigation as to stainless seamless pipes originating from China
On 25 July 2013 the Interdepartmental Commission on International Trade adopted the Decision “On Initiation and Conducting an Anti-Dumping Investigation Related to Import into Ukraine of the Stainless Seamless Pipes Originating from China”. The pipes are classified under codes 7304 41 00 90 and 7304 49 92 90 of UCG FEA. The relevant Decision No. СП-300/2013/4423-06 dated 25 July 2013 came into force on 27 July 2013.
Reviews of the imposed anti-dumping and safeguard measures
In July 2013 the Interdepartmental Commission on International Trade (the "Commission") adopted the following decisions on reviews of the measures in force:
(i) “On Initiation and Conducting a Review of Anti-Dumping Measures Related to Import into Ukraine of Fiberboards Originating from Belarus in Connection with the Expiration of Their Application” (sunset review). The relevant Decision No. АД-295/2013/4423-06 came into force on 8 July 2013. In addition, under the Decision anti-dumping measures imposed by the Commission pursuant to the Decision No. AД-45/2002/52-61 dated 12 July 2002 related to import of goods classified under code 4411 92 10 00 of UCG FEA shall be in force till the Commission's decision is adopted following the results of the sunset review;
(ii) “On Review of Safeguard Measures Related to Import into Ukraine of Steel Seamless Pipes (Casing and Pumping) Irrespective of Country of Origin and Export”. The relevant Decision No. СП-297/2013/4423-06 related to import of goods classified under codes 7304 29 10 00 and 7304 29 30 00 of UCG FEA came into force on 1 August 2013;
(iii) “On Results of Interim Review of Anti-Dumping Measures Related to Import into Ukraine of Turnouts Manufactured By PJSC “Muromsky Factory of Turnouts” Originating from the Russian Federation”. According to the relevant Decision No. АД-298/2013/4423-06 dated 2 July 2013 the anti-dumping measures are imposed by introducing anti-dumping duties on imports into Ukraine of the turnouts: a) at the rate of 13.44% for PJSC “Muromsky factory of turnouts”; b) at the rate of 59.4% – for other exporters;
(iv) “On Initiation and Conducting a Review of Anti-Dumping Measures Related to Import into Ukraine of Articles Made From Iron Originating from China in Connection with the Expiration of Their Application” (sunset review). The relevant Decision АД-299/2013/4423-06 dated 25 July 2013 came into force on 29 August 2013. In addition, under the Decision АД-299/2013/4423-06 dated 25 July 2013 anti-dumping measures imposed by the Commission under the Decision No. AД-183/2008/143-48 dated 23 July 2008 related to import of goods classified under codes 7312 10 41 00, 7312 10 49 00, 7312 10 65 00, 7312 10 81 00, 7312 10 83 00 and 7312 10 98 00of UCG FEA shall be in force till the Commission's decision is adopted following the results of the above sunset review;
(v) “On Initiation and Conducting an Interim Review of Anti-dumping Measures Related to Import into Ukraine of Ammonium Nitrate originating from the Russian Federation” related to import of goods classified under code 3102 30 90 00 of UCG FEA.
The relevant official notifications were published in the newspaper "Yryadovy Courier" No. 117 and 134 on 4 and 27 July 2013 respectively.
The quota for Interpipe was not prolonged|11|
The Customs Union refused to prolong a quota for the import of pipes produced by the plants of the Interpipe Group without paying the anti-dumping duties. Starting from 1 July 2013 the above companies shall pay anti-dumping duties at the rates of 18,9-19,9% (depending on pipes types), while importing their pipes into the Russian Federation, Belarus and Kazakhstan.
Russian Federation banned the import of goods from Ukraine
On 29 July 2013 the Federal Service on Customers' Rights Protection and Human Well-Being Surveillance (the Federal Service) of the Russian Federation imposed a ban on the import of confectionery products of the Ukrainian manufacturer “Roshen” into the Russian Federation because of its incompliance with the quality standards. On 16 August 2013 the Ministry of Agrarian Policy and Food of Ukraine and the Head of the Federal Service agreed that in Ukraine 5 laboratories would be certified by the Russian authorities. After verification of the confectionery plants “Roshen” by the said laboratories, the ban may be cancelled|12|.
In addition, on 14 August 2013 the Customs Service of the Russian Federation included all Ukrainian importers in the list of "risk" importers that in fact blocked the supplies of all goods from Ukraine to the Russian Federation. The Ukrainian goods were subject to continuous testing by the Russian customs authorities, including unloading, reloading and loading them back into the transport that led to demurrage of cars and other vehicles, and, consequently, increased the cost and disrupted the supplies of goods. On 19 August 2013 during negotiations the representatives of the Ministry of Incomes and Taxes of Ukraine and the Federal Customs Service of the Russian Federation agreed that additional customs control procedures would not apply to the Ukrainian goods|13|.
U.S. anti-dumping investigation related to imports of pipes|14|
On 23 July 2013 the U.S. Commerce Department launched the anti-dumping investigation related to import into the USA of tubular goods originating from Ukraine and eight other countries. The only Ukrainian importer of the mentioned goods is company "Interpipe". Ukraine's share in total imports of pipes in the USA constitutes 3%.
IV. CUSTOMS RELATED ISSUES
Laws regulating the activity of the Ministry of Incomes and Fees of Ukraine|15|
On 4 July 2013 the Parliament of Ukraine adopted the Laws No. 2833-2835 setting forth the effective implementation of the tax and customs policy in connection with the establishment of the Ministry of Incomes and Fees of Ukraine. Thus, the Law No. 2833 amends the Tax Code of Ukraine and stipulates the legal conditions of the overall tax administration by the Ministry of Incomes and Fees. The Law No. 2833 provides, inter alia, that the authority of the Ministry of Incomes and Taxes includes: a) development and implementation of national tax and customs policies; b) administration of taxes and fees, customs duties, etc.
Finally, the Law No. 2835 provides amendments to 188 legislative acts regulating legal status of tax and customs authorities represented now by the Ministry of Incomes and Taxes.
Customs procedures for containers shipped by rail
On 19 June 2013 the Cabinet of Ministers of Ukraine adopted the Regulation “On Amendments to the Regulation of the Cabinet of Ministers of Ukraine No.381 dated 8 April 2009” No. 422-р|16| which provides the opening of the checkpoint across the state border in the territory of the container terminal of railway station Odessa-Lisky of Odessa railroad for goods transported in containers through Odessa Commercial Sea Port, Ilyichevsk Commercial Sea Port and Commercial Sea Port "Yuzhny". Before the adoption of the Regulation the goods in containers had to pass through customs clearance twice – at checkpoints of the relevant seaport and at the Odessa-Lisky checkpoint. Thus, the Regulation facilitates the procedures of customs clearance for container shipments by rail.
Determination of checkpoints for transportation of excisable goods
On 18 June 2013 the Resolution of the Cabinet of Ministers of Ukraine “On the Determination of Checkpoints across the State Border of Ukraine, through which the Transportation of Excisable Goods is Conducted and Cancellation of Certain Legislative Acts of the Cabinet of Ministers of Ukraine”|17| No. 390 dated 29 May 2013 came into force. The Resolution improves the conditions and removes many restrictions on the transportation of excisable goods across the stateborder of Ukraine. In particular, the Resolution allows the transportation of goods, except of alcohol, alcoholic beverages and tobacco, military goods, drugs for the treatment, through almost all checkpoints of the state border of Ukraine and extends the list of checkpoints through which the alcohol, alcoholic beverages and tobacco products may be transported.
The Memorandum of Understanding on Grain Exports was signed|18|
On 19 June 2013 the Ministry of Agricultural Policy and Food of Ukraine and non-governmental organizations such as the Ukrainian Grain Association, the Ukrainian Agrarian Association, the American Chamber of Commerce in Ukraine and others, representing the interests of grain exporters, signed the Memorandum of Understanding. Under the provisions of the Memorandum the parties agreed on cooperation in the grain market and ensuring mutual interests for the 2013/2014 marketing year. Total exports will be determined and agreed by the parties before 1 September 2013 and set forth in the Annex to the Memorandum.
Individual labeling of medicinal products
The Ministry of Health of Ukraine has published on its official web-site the Draft Law “On Amendments to the Law of Ukraine “On Medicinal Products”|19| introducing the binding individual labeling of the medicinal products packaging. The Draft Law introduces such labeling for manufacturers and distributors of the medicinal products from 1 July 2015 and for companies engaged in the retail trade – from 1 July 2016.
The Draft Lawis aimed to allow preventing the entry of counterfeit medicinal products onto the pharmaceutical market of Ukraine.
Amendments to the License Conditions of Importing Medical Products|20|
On 17 June 2013 the Order of the Ministry of Health of Ukraine “On Approval of Amendmentsto the License Conditions of the Business Activity of Importing Medical Products” No. 453 dated 30 May 2013 was registered in the Ministry of Justice of Ukraine. The amendments include the requirement to file a new document, importer’s profile, in order to obtain a license to import medical products. New Annex 10 to the Licensing Conditions sets forth requirements for the content of the importer’s profile. In addition, the Order provides the obligation to establish the fully documented and properly functioning, effective pharmaceutical quality system that requires the participation of senior staff and employees of various departments of licensee. The amendments, inter alia, set forth the mandatory submission of agreements on import of medical products entered into by an importer and a manufacturer or an importer, a supplier and an owner of the registration certificate of a medical product in order to obtain a license to import medical products. The Order will come into force on 1 December 2013.
Ban of medical products advertising |21|
On 2 August 2013 the Order of the Ministry of Health of Ukraine “On Amendments to the List of Medical Products Prohibited for Advertising and subject to Prescription” No. 514 dated 17 June 2013 entered into force. The Order contains 300 medical products. The Order, inter alia, includes medical products used exclusively by children under the age of 12, despite the fact that this group of medical products has been previously banned for advertising under the Order of the Ministry of Health of Ukraine "On Certain Issues of Ban Advertising of Medical Products" No. 422 dated 6 June 2012.
Strengthening state control over the medicinal products|22|
The Draft Order "On Approval of the Order of State Control of Medicinal Products Quality before They are Released for Free Circulation in the Customs Territory of Ukraine" was published on the official website of the Ministry of Health of Ukraine. According to the Draft Order the control will be carried out by the State Administration of Ukraine on Medicinal Products. The medicinal products can be imported into Ukraine with a certificate of quality – certificate of analysis or certificate of series, issued by the manufacturer, and licenses for import of a medicinal product. The annex to the license shall identify the list of medicinal products approved for import, as well as special conditions for conducting such activities.
Under the Draft Order an importer, importing medicinal products into the customs territory of Ukraine for the purpose of further sale or use in the production, before the customs clearance may submit to the authority of state control at the place of business the application for conclusion on the quality of medicinal products. The state control may be performed through: examination of the documents submitted by the importer; check of cargo at its location on conformity of each batch of medicinal products with the customs declaration and visual control of medicinal products; laboratory analysis in certain cases.
On 23 July 2013 the Ministry of Incomes and Fees of Ukraine published on its official website the Draft Law “On Amendments to the Tax Code of Ukraine concerning Improvement of Taxation by Value Added Tax”|24|. The Draft Law proposes to establish the VAT at the rate of 9%, repeal the preferences with regard to the VAT and introduce the turnover tax at rate of 1% and 2%. The Draft Law also proposes to exclude Art. 197 of the Tax Code of Ukraine "Transactions exempt from taxation", which, inter alia, provides for the exemption from taxation of supply of medical products approved for production and use in Ukraine and included in the State Register of Medical Products (including pharmacies) as well as medical devices according to the list ap proved by the Government of Ukraine.
Just to remind: Under the Tax Code of Ukrainethe VAT shall be 20% for the period from 1 January 2011 to 31 December 2013 inclusive, and 17% – from 1 January 2014.
VII. PRODUCT SAFETY
Amendments to Technical Regulations of Detergents
On 12 June 2013 the Cabinet of Ministers of Ukraine adopted the Resolution "On Amending the Resolution of the Cabinet of Ministers of Ukraine No. 717 dated 20 August 2008”|25| No. 408 amending the Technical Regulations of Detergents. The Resolution, inter alia, provides that the total content of phosphorus in laundry powder shall be limited to 0.5 grams in the recommended amount of laundry powder for the standard washing machine load, and up to 0.3 grams in a standard dose of detergent for dishwashing machine load of 12 persons’ dishes set. The Resolution will take effect from 12 December 2014 in relation to washing powders and 1 January 2017 – in relation to the means for dishwashers.
Regulation of maximum levels for certain polluting substances in food products
On 14 June 2013 the Order of the Ministry of Health of Ukraine “On Approval of State Sanitary Rules and Norms “Regulations of Maximum Levels for Certain Polluting Substancesin Food Products”|26| No. 368 dated 13 May 2013 was published in the magazine “Ofitsiyny Visnyk Ykrainy”. The Regulations, inter alia, prohibits the usage of ingredients in food products that do not meet the maximum levels of polluting substances set out in the Annex to the Regulations; the mixture of food products that meet and do not meet the maximum levels of polluting substances established in the Annex to the Regulations; detoxication of food products containing mycotoxins by chemical processing, etc.
The Regulations stipulate that food products that do not conform to the Regulations and manufactured and/or sold not later than 12 months after the entry into force of the Regulations shall remain in circulation in Ukraine until their expiration date.
The Order will come into force in three years after its official publication.
Protection of intellectual property rights in Internet
The State Service of Intellectual Property placed on its official web-site the Draft Law “On Amendments to Certain Legislative Acts on the Protection of Copyright and Related Rights in the Internet”|27| for the public discussion. The Draft Law is developed to ensure effective protection of copyright and related rights in the Internet, overcome piracy and improve the investment climate in Ukraine. In particular, under the Draft Law the holder of the intellectual property rights can submit the application to the State Service of Intellectual Property if their rights are violated. The State Service of Intellectual Property is obliged within 10 working days to check the lawfulness of the placing of intellectual property right objects online and publish information on this on its website. Within 14 days the person, who posts intellectual property right objects on his/her website, is obliged to stop the relevant violation or submit proof of the lawfulness of such posting to the State Service of Intellectual Property.
Postponing the responsibility for non-introduction of equipment of cash registers with electronic tapes
On 21 June 2013 the Parliament of Ukraine adopted the Law of Ukraine "On Amending Final Clauses of the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine due to Adoption of the Tax Code of Ukraine" regarding Responsibility for Non-Submission of Electronic Reports"|28| No. 2087a-1. Under the previous version of the Law the owners of retail business were obliged to equip their cash registers with electronic tapes for transferring electronic copies of cash operations and fiscal receipts to the Ministry of Incomes and Fees of Ukraine and the responsibility for such non-equipment was prescribed from 1 July 2013. Under the Law the responsibility for the non-compliance with this requirement was postponed to 1 July 2014.
Amendments in the sphere of personal data protection
On 3 July 2013 the Parliament of Ukraine adopted the Law "On Amendments to Certain Legislative Acts of Ukraine Concerning Improvement of the Personal Data Protection" No. 383-VII|29|. The Law determines the parliamentary Commissioner for human rights as the authorized body in the sphere of personal data protection with the following powers: conducting scheduled and unscheduled off-site inspections on the controller and processor; providing recommendations in the sphere of the personal data protection; coordinating corporate codes of conduct, etc.
The Law canceled the requirement of data bases registration. However, it provides for that the processor of personal data shall notify the Commissioner about the processing of personal data constituting the particular risk to the rights and liberties of a person within 30 working days from the date of such processing. Such notified information shall be subject to disclosure. The types of personal data processing, including processing, which constitutes a particular risk to the rights and liberties of personal data, and categories of entities covered by the notification requirement shall be determined by the Commissioner.