International Trade News. March-April 2013
I. UKRAINE & WTO
Members rejected the legitimacy of actions of Ukraine|1|
At the meeting of the WTO Council for Trade in Goods on 25 March 2013 the WTO member-states, including ASEAN countries, Australia, Brazil, the EU, Canada, China, the USA, Turkey, Japan, made a statement on actions initiated by Ukraine under Article XXVIII of GATT 1994. In particular, the statement indicates that the Ukrainian proposal applies to 371 tariff lines of critical importance for Ukraine and the exporting countries. Thus, the question is not just quantitative, but also qualitative. The WTO Members appealed to the Government of Ukraine to take into consideration the concerns of the WTO Members to change course and abandon the proposed action under Article XXVIII of GATT 1994.
Just to remind: On 14 September 2012 Ukraine submitted to the WTO document marked "secret", in which it expressed its readiness to raise binding tariffs on more than 371 goods under Article XXVIII of GATT 1994.
Representative of Ukraine to the WTO
On 15 April 2013 the President of Ukraine adopted the Decree "On Representative of Ukraine to the World Trade Organization” No. 215/2013|2|.
The Decree provides for the appointment of Mr. Andryi Goncharuk, the Advisor to the President of Ukraine, the Head of the Department of International Relations of the Presidential Administration of Ukraine, as the representative of Ukraine to the WTO (with location in the city of Kiev). According to the Decree the appointment is made to ensure the introduction and implementation of a single foreign policy of Ukraine on cooperation with the WTO and effective representation of Ukraine in the WTO.
State Commission for Cooperation with WTO
On 15 April 2013 the President of Ukraine adopted the Decree "On State Commission for Cooperation with the WTO” No. 214/2013|3|. Under the Decree the State Commission for Cooperation with the WTO was established as an advisory body to the President of Ukraine. The main tasks of the Commission are to prepare and make proposals for the introduction of a single foreign policy of Ukraine in relations with WTO members, in particular to address the problems of cooperation between Ukraine and the WTO, as well as Ukraine's national interests in foreign economic relations of the WTO members.
However, on 17 April 2013 at a press briefing Mr. Andryi Goncharuk, the Representative of Ukraine to the WTO, who was appointed as a chairman of the State Commission for Cooperation with the WTO, said that one of the priorities of the State Commission is to continue negotiations on the re-negotiation of binding tariffs in the WTO under Article XXVIII of GATT 1994.
II. REGIONAL TRADE LIBERALIZATION
Ukraine may become the observer in the Customs Union|4|
On 23 April 2013 the Prime Minister of Ukraine, Mr. Mykola Azarov, stated to the reporters that Ukraine agreed with the Customs Union of Russia, Belarus, and Kazakhstan to become an observer of this organization. However, the Eurasian Economic Commission, the main regulative body of the Customs Union, has not adopted its final decision on this issue yet.
FTA with Faroe Islands|5|
As the future EU-Ukraine Free Trade Agreement will not apply to Faroe Islands (being an autonomous region of Denmark), the Embassy of Denmark proposed Ukraine to fill this gap by entering into a Free Trade Agreement with the Faroe Islands. Now the respective draft is being approved in the relevant ministries and departments of Ukraine. It is expected that the FTA with Faroe Islands will eliminate customs duties on all goods.
III. TRADE DEFENSE REMEDIES AND QUOTAS
Safeguard measures on imports of motor cars
On 14 March 2013 the Decision of the Interdepartmental Commission on International Trade “On Application of Safeguard Measures on Imports of Motor Cars in Ukraine Irrespective of Their Country of Origin and Export”|6| No. СП-275/2012/4423-08 dated 28 April 2012 was published in the newspaper "Yryadovy Courier". The Decision states that safeguard measures are imposed for three years by introducing safeguard duties on imports into Ukraine of the motor cars based on their cylinder volume:
1) over 1000 cm3, but not exceeding 1500 cm3 – at the rate of 6.46%;
2) over 1500 cm3, but not exceeding 2 200 cm3 – at the rate of 12.95%.
In addition, at the end of March 2013 the Kyiv District Administrative Court received an administrative claim for recognition as unlawful of inactivity of the Interdepartmental Commission on International Trade as to publishing the Decision of the Interdepartmental Commission on International Trade No. СП275/2012/4423-08 that was adopted on 28 April 2012, but published only on 14 March 2013.
New decisions of the Interdepartmental Commission on International Trade|7|
At the meeting on 24 April 2013, the Interdepartmental Commission on International Trade decided to:
(i) extend for 5 years the anti-dumping duties on imports of asbestos cement corrugated sheets (slate) originating from the Russian Federation (Decision No.АД-289/2013/4423-06).
(ii) impose definitive anti-dumping duties on imports of citric acid (monohydrate) originating from China as follows: to Cofco Biochemical (Anhui) Co., Ltd – 8,15%; to other exporters of citric acid (monohydrate) originating from China as well as other imports without a certificate of origin – 24.74% (Decision No. АД-291/2013/4423-06). Under the Decision the antidumping investigation is terminated in respect of Weifang Ensign Industry Co., Ltd without application of antidumping measures.
The respective official notifications were published in the newspaper "Yryadovy Courier" on 27 April 2013.
Changes in the composition of the Interdepartmental Commission on International Trade
On 8 April 2013 the Cabinet of Ministers of Ukraine adopted the Resolution “On the Change of Composition of the Interdepartmental Commission on International Trade” No. 216-p|8|. Pursuant to the Order three new members are included into the Interdepartmental Commission on International Trade, approved by the Resolution of the Cabinet of Ministers of Ukraine No 301 dated 18 April 2012. They are: Mr. Oleksandr Danyleyko – an Acting Director-General of Directorate General for Economic Cooperationof the Ministry of Foreign Affairs of Ukraine; Mr. Sergii Netudykhata – a State Authorized Representative of the Antimonopoly Committee of Ukraine; Mr. Yaroslav Shyhovets – a Deputy Director of the Department of Civil and Financial Legislation and Legislation on Land Relations, a Head of Department on Financial Legislation of the Ministry of Justice of Ukraine. In addition, according to the Order Mr. Igor Nikolaiko, Mr. Myhailo Rusynsky and Ms. Olena Ferens are excluded from the Commission.
The proposed amendments to the anti-subsidy legislation
On 10 April 2013 the Draft Law "On Amendments to the Law of Ukraine “On Protection of Domestic Producers from Subsidized Import" (regarding Procedures of Anti-subsidy Investigations and Application of Countervailing Measures)” No. 2772|9| was registered in the Parliament of Ukraine.
One of the major amendments under the Draft Law is the exclusion of the classification of subsidies into legitimate and illegitimate ones. The above amendments are proposed because the legitimate subsidies provided for in Article 8 of the WTO Agreement on Subsidies and Countervailing Measures has been repealed from 1 January 2000. Thus, under the above WTO Agreement any subsidy may be subject to countervailing measures, if it causes or may cause injury to the producers of other WTO Members. In addition, the Draft Law provides principles for determining the targeting of subsidies, the calculation of benefit provided by the recipient and offers to exclude Annexes 4-7 to the current Law.
Quotas for 2013
Starting from 1 June 2013 quotas for coking coal, bituminous coal, coke, semi-coke and some other goods have been introduced by the Resolution of the Cabinet of Ministers of Ukraine “On Amendments to the Resolution of the Cabinet of Ministers of Ukraine No. 1201 dated 19 December 2012”|10| No. 225 dated 13 March 2013.
The Resolution of the Cabinet of Ministers of Ukraine “On the Interdepartmental Commission for Allocation of Quotas of Goods subject to Import Licensing in 2013, and the Amendments to Annex 8 of the Resolution of Cabinet of Ministers of Ukraine No. 1201 dated 19 December 2012”|11| No. 312 dated 22 April 2013 provides for establishment of the Interdepartmental Commission for Allocation of Quotas of Goods subject to Import Licensing in 2013. The Commission is a temporary advisory body established by the Cabinet of Ministers of Ukraine with the main task to provide recommendations on the allocation of quotas of goods subject to import licensing in 2013 between business entities engaged in import of the respective goods.
IV. CUSTOMS RELATED ISSUES
The Ministry of Incomes and Fees of Ukraine was established
The Ministry of Incomes and Fees of Ukraine began performing all functions and responsibilities imposed on it. The relevant Order of the Cabinet of Ministers of Ukraine “Issues of the Ministry of Іncomes and Fees”|12| No. 166-p dated 20 March 2013 was published on 3 April 2013 in the newspaper "Yryadovy Courier".
According to the Order the Ministry of Incomes and Fees of Ukraine shall perform all functions and powers of the State Tax Service of Ukraine and the State Customs Service of Ukraine which assigned to it by the Order of the President of Ukraine "On the Ministry of Incomes and Fees of Ukraine” No. 141 dated 18 March 2013. The State Tax Service of Ukraine and the State Customs Service of Ukraine stopped to perform their activities.
In addition, in connection with the establishment of the Ministry of Incomes and Fees of Ukraine, some Draft Laws were elaborated to facilitate its activity, to name but a few: the Draft Law of Ukraine "On Amendments to the Budget Code of Ukraine In Connection with the Creation of Authorities of Incomes and Fees" No. 2800 dated 15 April 2013; the Draft Law of Ukraine "On Amendments to the Customs Code of Ukraine In Connection with the Creation of Authorities of Income and Fees" No. 2798 dated 15 April 2013; the Draft Law of Ukraine "On Amendments to the Tax Code of Ukraine In Connection with the Creation of Authorities of Income and Fees" No. 2797 dated 15 April 2013.
Just to remind: On 24 December 2012 the President of Ukraine issued the Decree “On Some Measures of Optimization of the System of Central Executive Bodies” No. 726/2012 reorganizing the State Customs Service of Ukraine and the State Tax Service of Ukraine into the Ministry of Incomes and Fees of Ukraine. The Ministry is also administrating the single payment for mandatory state social insurance.
The Board of the Ministry of Incomes and Fees of Ukraine was established|13|
On 29 March 2013 the Ministry of Incomes and Fees of Ukraine adopted the Order "On Approval of the Board of the Ministry of Incomes and Fees of Ukraine” No. 13. Under the Order the Board is an advisory body and formed to prepare recommendations on the performance of the tasks of the Ministry of Incomes and Fees of Ukraine and solution of issues within its competence. The functions of the Board include, inter alia, the discussing and deciding the prospects and the most important activities of the Ministry of Incomes and Fees of Ukraine; consideration of issues concerning improvement of legislation on matters within the competence the Ministry of Incomes and Fees of Ukraine; formation of a single state tax policy, state customs policy and control over production and sale of alcohol, alcoholic beverages and tobacco products, etc. Pursuant to the Order the Board includes the Minister of Incomes and Fees of Ukraine (the Chairman of the Board), the First Deputy Minister, the Deputy Minister – the Chief of Staff and Deputy Minister.
New personnel of the Customs Department of the Ministry of Income and Fees of Ukraine
On 8 April 2013 the new personnel of the Customs Department of the Ministry of Income and Fees of Ukraine was approved by the Letter of the Ministry of Income and Fees of Ukraine No. 13/2-495-ЕП|14|.
Goods under the customs regime of processing
On 27 March 2013 the Cabinet of Ministers of Ukraine adopted the Resolution "On Certain Issues of the Goods under the Customs Regime of Processing in the Customs Territory of Ukraine, Restrictions and Prohibitions on the Placing of Certain Goods at Specified Customs Regime and Recognition of Certain Acts of the Cabinet of Ministers of Ukraine to be Expired” No. 295. The Resolution approves the list of goods, which placing under the customs regime of processing in the customs territory of Ukraine shall be prohibited. These include: 1) meat and edible by-products; 2) clothing and other items that were used; 3) goods, which processing provides the derived products (except for certain residues and waste). In addition, in accordance with the Resolution the financial guarantees are applicable to sugar and confectionery goods produced of sugar, placed in the customs regime of processing in the customs territory of Ukraine. The products derived from the processing of foreign goods and are subject to a special kind of duty under the decisions of the Interdepartmental Commission on International Trade, shall be subject to compulsory re-export from the customs territory of Ukraine.
Order on Customs Clearance of Imported Goods in Wrapping Material is valid again
On 30 July 2009 the Order of the Ministry of Economy of Ukraine, the Ministry of Environmental Protection of Ukraine and the State Customs Service of Ukraine “On the Procedure of Customs Clearance of Imported Goods in Wrapping Material” No.789/413/709 was adopted. The Order provides, inter alia, the obligations of importers to present during customs clearance of imported goods the contract with state company “Ukrekokomresursy” or proving materials of self maintained recycling the used packaging materials.
Under the Decision of the State Service of Ukraine for Regulatory Policy and Entrepreneurship Development No. 7 dated 30 October 2012 and the Order of the Ministry of Justice of Ukraine No. 101/5 dated 14 January 2013, the Order was suspended. The reasons for such suspension were the unlawfulness of compulsory placing personal stamp "Import is permitted" by the State Inspector of Environmental Protection for the customs clearance of goods imported in containers and packaging and contradictory provision of the obligatory submission of a contract with the state enterprise "Ukrekokomresursy" to organize the collection, storing and disposal of containers and packing materials, or the submission of other documents for self-acceptance and disposal of packaging.
Notably, in accordance with the Decision of Kyiv Appeal Administrative Court dated 27 March 2013 the above Decision of the State Service of Ukraine for Regulatory Policy and Entrepreneurship Development No. 7 dated 30 October 2012 and the Order of the Ministry of Justice of Ukraine No. 101/5 dated 14 January 2013 were recognized unlawful and cancelled.
In addition, the Letter of the State Customs Service of Ukraine No 11.1/4-12/2894-EП dated 28 March 2013 provides that the Order of the Ministry of Economy of Ukraine, the Ministry of Environmental Protection of Ukraine and the State Customs Service of Ukraine “On the Procedure of Customs Clearance of Imported Goods in Wrapping Material” No.789/413/709 dated 30 July 2009 shall be valid starting from 27 March 2013.
At the same time, the Order of the Ministry of Economy of Ukraine, the Ministry of Environmental Protection of Ukraine and the State Customs Service of Ukraine “On the Procedure of Customs Clearance of Imported Goods in Wrapping Material” contradicts the Customs Code of Ukraine as the former sets forth that the stamp of the State Inspector of Environmental Protection, which is not customs official, is a mandatory condition for customs clearance of goods in containers and packaging.
On 4 April 2013 the Parliament of Ukraine adopted the Law of Ukraine “On Amendments to the Customs Code of Ukraine and Certain Other Laws of Ukraine”|15| No. 183-VII effective starting from 28 April 2013. The Law provides for the amendments to the Customs Code of Ukraine and some other laws of Ukraine with regard to the regulation of financial guarantees. In particular, the Law provides for the amendment to Article 309 of the Customs Code of Ukraine stipulating that individual financial guarantee in paper form applies only when the goods are transferred across the border with the use of a customs declaration or document control in paper form. An electronic copy of such individual guarantee shall be sent to a unified information system of customs authorities of Ukraine by electronic message of a guarantor.
The Law provides the cases when the guarantees are terminated, more detailed regulation of different kind of guarantees, conditions of return of a guarantee etc.
Unlimited wheat export
On 24 April 2013 the meeting of participants of the grain market and the Ministry of Agricultural Policy and Food of Ukraine was held. The participants agreed that the grain traders can export wheat from Ukraine until the end of the current marketing year (July 2012 – June 2013) in unlimited quantities. However, the director of the Department for the Economic Development of the Agrarian Market at the Ministry, Mr. Vitaliy Sabluk, said that the agreement has not yet been formalized.
Amendments to procedure of registration of pharmaceutical products
The Order of the Ministry of Health of Ukraine “On Amendments to the Order of the Ministry of Health of Ukraine No.426 dated 26 August 2005 and Invalidating Certain Orders of the Ministry of Health of Ukraine on Registration of Pharmaceutical Products” No.3 dated 4 January 2013|16| came into force on 16 April 2013.
The Order improves the procedure for expert evaluation of registration materials for the state registration (re-registration) of pharmaceutical products, providing for: unification of regulations on examination of registration materials under the Order; optimization and clear information for the timelines of every stage of expert evaluation of registration materials; detalization of variation expertise system and its classification update based on modern trend in industry; new approach to procedure of additional testing as part of expert evaluation process; rules of the applicant appeal procedure; extended list of definitions.
The Order also approves the Regulations on the Qualification Commission of the Ministry of Health of Ukraine.
Information on applications for registration of pharmaceutical products
The Letter of the State Expert Center of the Ministry of Health of Ukraine dated 16 April 2013 with regard to publication of information on applications for registration of pharmaceutical products is published on the web-site of the American Chamber of Commerce in Ukraine|17|. In the Letter the State Expert Center notifies that information stated in applications for registration of pharmaceutical products is subject to state protection and could not be disclosed. Therefore, the Ministry of Health of Ukraine publishes the status of the registration procedure stage on its web site.
VII. PRODUCT SAFETY
Technical regulations on safety of toys
On 18 April 2013 the Draft Resolution of the Cabinet of Ministers of Ukraine "On Approval of Technical Regulations on Safety of Toys"|18| was published on the official website of the Ministry of Economic Development and Trade of Ukraine. The Technical Regulation is designed in accordance with Directive on the Safety of Toys 2009/48 of the European Parliament and the Council dated 18 June 2009. The Technical Regulation shall apply to products that are designed or intended exclusively or not only, for use by children under 14 years. The Technical Regulation governs the responsibilities of manufacturers, importers, distributors, establishes the basic safety requirements, conformity assessment procedures, requirements for technical documentation and procedures of conformity assessment bodies and others.
Federal Serviceof Russian Federation lifted control over Ukrainian cheese|19|
On 9 April 2013 on its official website the Federal Service on Customers' Rights Protection and Human Well-being Surveillance of the Russian Federation announced withdrawal of control of each batch of the Ukrainian cheese imported to the Russian Federation.
Ban on use and import of certain food additives is proposed
On 28 March 2013 the Draft Law “On Amendments to Certain Laws of Ukraine (regarding the Ban on Import and Usage of Certain Food Additives)”|20| was registered in the Parliament of Ukraine. The Draft Law stipulates the ban of some food additives, such as E 956, E 959, E 961, E 962; Е 965; E 966; Е967. The Draft Law provides for the possibility to use some additives for production of diet and children food. In such cases the producers shall have to receive a permit from the central executive authority on the healthcare and introduce a special label mentioning the additives.
Language of labeling
On 4 March 2013 the Resolution of the Cabinet of Ministers of Ukraine "On Amendments to the Procedure on Trading Activity and Trading Service Rules on Consumer Goods Market”|21| No. 226 was adopted with the effect starting from 16 April 2013. The Resolution amends the Procedure on Trading Activity and Trading Service Rules on Consumer Goods Market. The Procedure is complemented by paragraph 1.10 as follows: "By decision of the business entity, labeling of goods or instructions on their application (in prescribed cases) may next to text in the official language contain a translation into regional or minority language, other languages".
Registration of pesticides and agrochemicals
On 14 March 2013 the Order of the Ministry of Ecology and Natural Resources of Ukraine "On Amendments to the Order of the Ministry of Natural Resources No. 149 dated 25 March 2008 "No. 73 dated 26 February 2013 was registered by the Ministry of Justice of Ukraine.
The Order stipulates that the applicant for the test and registration of pesticides and agrochemicals shall ensure that in connection with such state registration the intellectual property rights of the third parties will not be violated and the ownership of the substance and the process of its preparation for a new use of the substance or the process of obtaining the substance will not be breached. The applicant agrees that in the event a court finds a violation of intellectual property rights or property rights, the state registration will be denied or canceled on the basis of a court decision.
Prohibition of actions contributing to corruption
On 29 March 2013 the Draft Law "On Amendments to the Law of Ukraine "On Principles of Prevention and Combating Corruption" (Prohibiting Persons Authorized to Perform the Functions of the State or Local Governments, Persons Equated to Them and Their Families to Open Bank Accounts Abroad and Perform Other Actions that Contribute to Corruption Offenses)"|22| was registered in the Parliament of Ukraine. Under the Draft Law a person authorized to perform the functions of the state or local governments, persons equated to them and their family members are prohibited to: 1) have deposits in foreign banks in the territory of foreign states, and/or have the real estate abroad and/or have the securities of foreign companies, and 2) open deposit accounts in a foreign bank abroad and/or purchase for personal possession the immovable property abroad and/or to acquire ownership of securities of a foreign company. The ban does not apply to certain categories of persons mentioned above in case of the necessity of medical or educational services.