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12 June 2013

International Trade News. May 2013

I. UKRAINE & WTO

New Director-General of WTO|1|

On 14 May 2013 the WTO General Council approved the appointment of Ambassador Roberto Carvalho de Azevêdo (Brazil) as the next Director-General of the WTO. He will begin his term of office on 1 September 2013.

Personal Composition of State Commission for Cooperation with WTO

Under the Decree of the President of Ukraine "On Personal Composition of State Commission for Cooperation with WTO" No.258/2013 dated 15 May 2013|2| the personal composition of the State Commission for Cooperation with WTO was approved. Under the Decree the head of the Commission is Mr. Andryi Goncharuk, who was also appointed as a representative of Ukraine to the WTO in April 2013.

II. REGIONAL TRADE LIBERALIZATION

Ukraine and the Customs Union signed the Memorandum|3|

On 31 May 2013 the Memorandum on Deepening Cooperation between the Eurasian Economic Commission and Ukraine was signed between Ukraine and the Eurasian Economic Commission.

Under the Memorandum Ukraine is entitled to be present at public meetings of the Supreme Eurasian Economic Council, the Council of the Eurasian Economic Commission and the Board of the Eurasian Economic Commission, but only at the invitation of the president of the relevant body, with the consent of all its members and without the right to participate in decision-making process. Moreover, pursuant to the Memorandum Ukraine declared the intention to observe the principles envisaged in the documents forming the legal base of the Customs Unionand Common Economic Space and to refrain from actions directed against the interests of the Customs Union. In addition, Ukraine will appoint a representative with the necessary authorities in order to ensure the cooperation under the Memorandum and discuss issues related to the further cooperation.

However, paragraph 5 of the Memorandum provides for directly that it is not an international treaty and does not create rights and obligations governed by international law.

III. TRADE DEFENSE REMEDIES AND QUOTAS

New decisions of the Interdepartmental Commission on International Trade

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

(i) On initiation and conducting a safeguard investigation related to import into Ukraine of the porcelain dishware and cutlery classified under code 6911 10 00 00 of UCG FEA irrespective of the country of origin and export (Decision No. СП-292/2013/4423-06 dated 16 May 2013). The relevant official notification was published in the newspaper "Yryadovy Courier" on 21 May 2013;

(ii) On initiation and conducting a review of anti-dumping measures related to import into Ukraine of ammonium nitrate originating from the Russian Federation in connection with the expiration of their application (sunset review). The claim for such review was submitted by 4 Ukrainian manufacturers. The relevant Decision АД-294/2013/4423-06 dated 24 May 2013 shall come into force on 28 June 2013. In addition, under the Decision anti-dumping measures imposed by the Commission under the Decision No. AД-176/2008/143-47 dated 21 May 2008, as amended on 25 October 2010, shall be in force till the Commission's decision on the results of this review. The relevant official notification was published in the newspaper "Yryadovy Courier" on 29 May 2013;

(iii) On application of definitive anti-dumping measures related to import into Ukraine of medical glass packing of capacity up to 0,15 liters originated from the Russian Federation. Under the relevant Decision No. АД-293/2013/4423-06 dated 24 May 2013 the definitive anti-dumping duties are imposed as follows: to JSC Berezytskyy Glass Factory – 13.08%; to other exporters – 27.99 %. The anti-dumping investigation was terminated in respect of LLC Ostriv Dzhus without application of anti-dumping measures. The relevant official notification was published in the newspaper "Yryadovy Courier" on 29 May 2013.

In addition, the Notification "On Expiry of Anti-dumping Measures related to Import into Ukraine of Switch Throwers Originating from the Russian Federation" was published in the newspaper "Yryadovy Courier" on 21 May 2013. Under the Notification the Ministry of Economic Development and Trade of Ukraine informs that the term of application of anti-dumping measures on import into Ukraine of switch throwers originating from the Russia Federation will expire on 29 November 2013.

USA initiated Section 301 investigation against Ukraine|4|

On 30 May 2013, after identification of Ukraine as a Priority Foreign Country in this month’s Special 301 Report, the acting U.S. Trade Representative (USTR), Ms. Miriam Sapiro, announced that the United States have initiated an investigation under Section 301 of the Trade Act 1974 of the acts and practices of the Government of Ukraine. Section 301 of the Trade Act 1974 is aimed to protect the US persons from the acts of foreign countries violating the intellectual property rights.

As part of this investigation, the Office of the USTR will receive comments from interested stakeholders and will hold a public hearing on 18 July 2013. The USTR will publish a notice in the Federal Register announcing the initiation of the investigation and procedures for the interested persons to submit written comments and to request to participate in the hearing.

Quotas for 2013

On 17 May 2013 at the meeting of the Interdepartmental Commission for Allocation of Quotas of Goods subject to Import Licensing in 2013, the Commission adopted its recommendations|5| on allocation of quotas between legal entities for 2013 for import of goods under codes of UCG FEA 2701 12 10 00, 2701 12 90 00, 2701 19 00 00.

IV. CUSTOMS RELATED ISSUES

Full rates of import duties applied to goods with undefined country of origin to be doubled

The Draft Law "On Amendments to Customs Tariff of Ukraine, Approved by the Law of Ukraine "On Customs Tariff of Ukraine" No. 2105а|6| was registered in the Parliament of Ukraine on 22 May 2013. The Draft Law proposes that the full rates of import duties applied to goods with undefined country of origin shall be doubled in order to encourage the importers to declare actual information on the country of origin of goods. In view of the authors of the Draft Law, it does not contradict to the requirements of the WTO, as under Article 280 of the Customs Code of Ukraine privileged rates (but not full) of import duties are applied to goods originating from the members of the WTO or the countries, with which Ukraine has entered into bilateral or regional agreement providing most favored nations. As for now the full and privileged import duty rates for almost 87% of subcategories of the Customs Tariff of Ukraine are established on the same level that does not encourage importers to declare information about the country of origin of goods.

Changes to customs valuation regulation are proposed

On 20 May 2013 the Draft Law "On Amendments tothe Customs Code of Ukraine (Regarding Customs Valuation and Methods of Its Determination)" No.2061а|7| was registered in the Parliament of Ukraine. The Draft Law amends Section III, Articles 263 and 311 of the Customs Code of Ukraine relating to the order of declaration of customs value.

In particular, the Draft Law proposes to: a) authorize the declarant to choose the method of determining the customs value of declared goods; b) establish that the information contained in the information systems of authorities on incomes and taxes can not be a ground for refusal in customs clearance of goods with the customs value declared by the declarant and determined by the price of the contract; c) establish the grounds on which the authorities on incomes and taxes may monitor and verify the correctness of the declared customs value of the goods after customs clearance; d) authorize officials of incomes and taxes to verify the correctness of the determination of the customs value after customs clearance through documentary off-site inspection, etc.

V. AGRICULTURE

Amendments to the grain certification requirements

On 21 May 2013 the Parliament of Ukraine adopted in the first reading the Draft Law "On Amendments to the Law Ukraine "On Grain and Grain Market in Ukraine" (Concerning the Deregulation of the Grain Market) No.2459|8|. The Draft Law provides, inter alia, the limitation of mandatory certification of quality ofthe grain and its products during their export from the customs territory of Ukraine. In particular, under the Draft Law it shall be mandatory only if foreign economic contract contains such requirement. In addition, if the grain and its products are transferring within the territory of Ukraine, such certification is mandatory in the following cases only: a) grain and its products are purchased wholly or partly at the expense of state or local government; b) the relevant contract contains such requirement.

Now the Draft Law is being prepared to the second reading.

VI. PHARMACEUTICALS

Draft Technical Regulations of Medical Devices

On 28 May 2013 the Draft Resolution of the Cabinet of Ministers of Ukraine "On Approval of Technical Regulations of Medical Devices" was published on the official site of the Ministry of Health of Ukraine|9|. The Draft Resolution, contrary to the current Technical Regulations of Medical Devices approved by the Resolution of the Cabinet of Ministers of Ukraine No.536 dated 11 June 2008, contains more detailed principles and conditions of the manufacture and sale of medical devices; the introduction of the assessment procedures on conformity with the requirements for safety and efficiency; criteria for the classification of medical devices, etc. In addition, the Draft Resolution contains provisions on the requirements for clinical evaluation of medical devices.

VII. OTHERS

Compulsory sale of the proceeds in foreign currency

On 14 May 2013 the Board of the National Bank of Ukraine adopted the Resolution "On the Change in Timing of the Settlement of Transactions on Exports and Imports of Goods and the Introduction of Compulsory Sale of Foreign Exchange Earnings" No. 163|10| and the Resolution "On Establishing the Amount of the Mandatory Sale of Foreign Exchange Earnings" No. 164|11|.

Both Resolutions entered into force on 20 May 2013 and are in force till 19 November 2013.

Resolution No.163 provides that the term of payments for the export and import of goods, envisaged in Articles 1-2 of the Law of Ukraine "On the Procedureof Payment in Foreign Currency" shall be 90 days (instead of 180 days). Under Resolution No. 164 the residents’ currency earnings from the sale of goods under foreign economic agreements shall be subject to compulsory sale on the interbank foreign exchange market of Ukraine in the amount of 50% of such earnings.

Just to remind: Resolutions of the National Bank of Ukraine No. 475 and 479 both dated 16 November 2012 introduced the same provisions which were to be in force till 19 May 2013. Now, according to Resolutions No. 163 and No. 164 the above requirements and restrictions are prolonged for an additional 6 months.

Criminal liability of legal entities

On 23 May 2013 the Parliament of Ukraine adopted the Draft Law "On Amendments to Certain Legislative Acts of Ukraine (Regarding Action Plan on Liberalization by the EU of Visa Regime with Ukraine on the Liability of Legal Entities)" No.2990|12|. Now the Law is submitted to the President of Ukraine for signing. 

The Law provides the amendments to the Criminal Code of Ukraine, the Criminal Procedure Code of Ukraine, the Law of Ukraine “On the Safety of Persons Involved in Criminal Proceedings”, the Law of Ukraine "On the Prevention and Counteraction of Corruption". The Law stipulates the grounds for the application of criminal liability to legal entities, grounds for exemption of the legal entities from criminal liability, types of criminal legal measures which can be applied to the legal entities, etc. The Law provides that it will come into force on 1 September 2014.

Authority of the Commissioner for human rights in the field of personal data protection

On 14 May 2013 the Parliament of Ukraine adopted the Draft Law "On Amendments to Certain Legislative Acts of Ukraine Concerning Improvement of the Personal Data Protection" No.2836|13|. The Draft Law determines the parliamentary Commissioner for human rights as the authorized body in the sphere of personal data protection with the following powers, in particular: 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; introducing proposals on the establishment and implementation of public policy in the sphere of personal data in the manner prescribed by law, etc.

Now the Draft Law is submitted to the President of Ukraine for signing. 

Amendments to the anti-corruption legislation

On 18 May 2013 the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine in Order to Bring National Legislation into Conformity with the Standards of the Criminal Law Convention on Corruption"|14| No.221-VII dated 18 April 2013 entered into force. The Law introduces the amendments to the Criminal Code of Ukraine and the Code of Administrative Offences of Ukraine. Under the Law the term "bribe" in Articles 368-369 of the Criminal Code of Ukraine is replaced by "improper advantage" which shall include money or other property, benefits, privileges, services, intangible assets that are promised, offered or received without lawful reason. In addition, the Law establishes criminal liability for providing or proposing to provide improper advantage to an employee of the state enterprise or organization who is not a civil servant.


|1|http://www.wto.org/english/news_e/news13_e/gc_14may13_e.htm

|2|http://www.president.gov.ua/documents/15722.html

|3|http://www.kmu.gov.ua/control/uk/publish/article?art_id=246390607&cat_id=244274130

|4|http://www.ustr.gov/about-us/press-office/press-releases/2013/may/amb-sapiro-ukraine-investigation

|5|http://www.me.gov.ua/control/uk/publish/article?art_id=206980&cat_id=206977

|6|http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=47074

|7|http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=47007

|8|http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=45970

|9|http://www.moz.gov.ua/ua/portal/Pro_20130528_0.html

|10|http://zakon2.rada.gov.ua/laws/show/z0718-13

|11|http://zakon2.rada.gov.ua/laws/show/v0164500-13

|12|http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=46901

|13|http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_2?pf3516=2836&skl=8

|14|http://zakon4.rada.gov.ua/laws/show/221-18

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