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International Trade

17 December 2021

International trade 2022

Source: Chambers and Partners

Law and practice

1. Trade agreements

1.1 World Trade organization membership or plurilateral agreements

Ukraine joined the WTO on 16 May 2008. It is a party to the Marrakesh Agreement establishing the World Trade Organization (the “WTO Agreement”) and all multilateral agreements included in the annexes thereto (including the Trade Facilitation Agreement). In 2016, Ukraine joined the Government Procurement Agreement, a WTO plurilateral agreement.

Since 2020, Ukraine has been participating in a Multi-Party Interim Appeal Arbitration Arrangement under Article 25 of the DSU (MPIA), a dispute settlement procedure agreed by WTO members to secure an appeal mechanism among the parties to this arrangement until the WTO Appellate Body becomes operational.

1.2 Free trade agreements

Ukraine is currently a party to 18 free trade agreements (FTAs) covering 47 states; in particular:

the UK–Ukraine FTA (entered into force on 1 January 2021)
the Ukraine–Israel FTA (entered into force on 1 January 2021)
the EU–Ukraine FTA within the framework of the EU–Ukraine Association Agreement (entered into force on 1 September 2017 and has applied provisionally since 1 January 2016)
the Canada–Ukraine FTA (entered into force on 1 August 2017)
the Ukraine–Montenegro FTA (entered into force on 1 January 2013)
the Commonwealth of Independent States (CIS) FTA (entered into force on 20 September 2012), which was concluded by Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Moldova, the Russian Federation, Tajikistan, Ukraine and Uzbekistan; the application of the CIS FTA to trade relations between Ukraine and the Russian Federation has been suspended since 1 January 2016
the EFTA–Ukraine FTA (entered into force on 1 June 2012)
the Ukraine–Macedonia FTA (entered into force on 5 July 2001)
the Ukraine–Azerbaijan FTA (entered into force on 26 August 1996)
the Ukraine–Georgia FTA (entered into force on 4 June 1996) and
the Ukraine–Turkmenistan FTA (entered into force on 4 November 1995)

In the early 1990s, before the CIS FTA, Ukraine had concluded bilateral FTAs with seven CIS member states (Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Moldova, Tajikistan and Uzbekistan). These FTAs are still in force and should be terminated.

A vast majority of the FTAs to which Ukraine is a party are bilateral agreements, except for the CIS FTA, which is plurilateral. All existing Ukrainian FTAs can be subdivided into two broad categories: “old generation” FTAs and “new generation” FTAs.

“Old generation” FTAs (namely, bilateral FTAs with the CIS member states and with Georgia, Azerbaijan, Turkmenistan and Macedonia) were concluded before Ukraine acceded to the WTO and have the following distinctive features:

the scope of their coverage is limited to goods only
these agreements are primarily focused on trade in goods and the elimination of import duties
they are drafted in a very general manner, often lacking sufficient specification for effective implementation
the respective agreements lack detailed dispute settlement rules (almost all FTAs stipulate only bilateral consultation mechanisms for addressing all disputes); and
the agreements provide for full liberalisation in trade in goods. Even though they do not directly stipulate any exceptions from the full liberalisation, in practice such exceptions have been agreed by the parties in separate protocols (usually adopted at the level of governments), which have often been revised or suspended fully or partially. Thus, in practice, because of this non-systematic approach, it is hardly possible to identify the complete list of effective exceptions

“New generation” FTAs (including the UK–Ukraine FTA, the Ukraine–Israel FTA, the EU–Ukraine FTA, the Canada–Ukraine FTA, the EFTA–Ukraine FTA, the CIS FTA and the Ukraine–Montenegro FTA) have been concluded by Ukraine in the past ten years and were built on the existing framework of WTO commitments and obligations, often going beyond them. The scope of coverage of such agreements is wider and, depending on the agreement, covers such areas as trade in services, intellectual property, investment, government procurement, trade facilitation, e-commerce, competition, movement of capital, labour and dispute settlement mechanisms. Moreover, such agreements contain specific rules and procedures that allow for meaningful operation of the free trade areas (eg, extensive rules of origin, cumulation mechanisms, notification procedures, detailed dispute settlement mechanisms). “New generation” FTAs also tend to contain detailed schedules of concessions indicating the level of liberalisation to be provided on a code-by-code basis.

1.3 Other trade agreements

In 2018, Ukraine joined the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (the “Pan-Euro-Med Convention”), which established common rules of origin among the countries with which the EU had FTAs and customs unions, and allowed for the application of diagonal cumulation between the Pan-Euro-Med members.

In addition, Ukraine currently benefits from the Generalised System of Preferences (GSP) schemes of the United States, Japan and Canada.

Under the US GSP Scheme, Ukrainian exporters are entitled to export more than 3,500 goods to the USA, including manufactured items and inputs, certain agricultural products and fishery, jewellery, chemicals, minerals and other items. At the same time, a lot of agricultural products, most textiles and apparel, leather products, footwear and watches are excluded from the scheme.

The volume of products covered by the Japanese GSP Scheme is similar to that of the USA and comprises 3,625 products (416 agricultural items and 3,209 industrial items). Agricultural items are subject to various tariff reductions, including duty-free treatment. Most of the industrial products are given duty-free treatment. The current GSP Scheme is effective until 31 March 2031.

Ukraine is also among the beneficiaries of the Canadian GSP Scheme, under which the applicable rates range from duty-free rates to reductions of the general most-favoured nation (MFN) rates. Certain products are excluded from the Scheme, such as chemicals, textiles and apparel. According to the current version of the Canadian Customs Tariff, sections related to the general preferential tariff (applied under the GSP Scheme) are valid until 31 December 2024. GSP preferences are operating in parallel with the Canada–Ukraine FTA that entered into force in 2017.

1.4 Future trade agreements

Ukraine has been negotiating an FTA with Turkey since 2011. According to the public statements, the parties have already agreed on about 95% of the provisions of the future agreement and expect to complete the negotiations in the near future.

1.5 Key developments regarding trade agreements

With regard to the trade agreements concluded by Ukraine, the following key developments have occurred in the last 12 months.

In December 2020, the report of the Arbitration Panel in the EU–Ukraine dispute on the wood export ban was issued. This is, indeed, a unique case due to different reasons. In particular, it was the first dispute between the EU and Ukraine and the first dispute involving Ukraine under its FTA. The Arbitration Panel ruled that Ukraine’s ten-year export ban on all unprocessed wood violated the EU–Ukraine Association Agreement and said violation could not be justified by the exceptions (in particular, by the exceptions envisaged by Article XX(g) of the GATT 1994, incorporated into the EU–Ukraine Association Agreement). Therefore, Ukraine is currently amending its respective legislation to bring it into compliance with the recommendations of the Arbitration Panel.

1.6 Pending changes to trade agreements

The FTAs concluded by Ukraine with the EU and Canada are currently undergoing revisions.

First, the EU–Ukraine FTA is currently being reviewed in the context of the EU–Ukraine Association Agreement. To this end, the parties are considering “faster and deeper liberalisation of trade in goods”, particularly the expansion of tariff quotas. Ukraine and the EU are also negotiating the Agreement on Conformity Assessment and Acceptance of industrial products to accelerate the access of industrial products to the markets of both parties through the mutual recognition of conformity assessment procedures. In a long-term perspective, the EU and Ukraine are working on the development of the roadmap for Ukraine’s participation in the European Green Deal. The parties are also considering Ukraine’s accessions to the EU Digital Single Market, the Single Euro Payments Area and other issues in the context of the EU–Ukraine Association Agreement.

Second, Ukraine and Canada started public consultations on further revision of the Canada–Ukraine FTA in 2020. According to the official statements, the parties are interested in expanding the co-operation under the existing Agreement in such sectors as services and investments. Thus, the respective chapters are currently being negotiated.

2. Customs

2.1 Authorities governing customs

The primary legal act regulating customs matters in Ukraine is the Customs Code of Ukraine No 4495-VI dated 13 March 2012.

2.2 Enforcement agencies enforcing customs regulations

The State Customs Service of Ukraine administers and enforces customs laws and regulations in Ukraine. It is responsible for the following in particular:

the control and supervision of compliance with the customs laws and regulations within the territory of Ukraine
customs clearance
the control of goods crossing the border
the administration of customs duties and related payments and
the administration of customs statistics, etc

2.3 Legal instruments

Under Article 29 of the Law “On Foreign Economic Activity” No 959-XII dated 16 April 1991 (the “Foreign Economic Activity Law”), Ukraine may introduce trade restrictions in response to discriminative or unfriendly actions by a state that is not a WTO member (anti-discriminative measures).

Ukrainian legislation does not provide for an exhaustive list of discriminative or unfriendly actions that may lead to the imposition of anti-discriminative measures. The Foreign Economic Activity Law only states that actions limiting legal rights and interests and deteriorating the position of Ukrainian entities engaged in foreign economic activities compared to foreign entities are considered discriminative.

Anti-discriminative measures are imposed by the Interdepartmental Commission on International Trade (the “Commission”) following an investigation conducted by the Ministry of Economy of Ukraine (the “Ministry”). The Commission is responsible for the key decisions during proceedings, while the Ministry is responsible for procedural issues. The procedure governing the anti-discriminative investigation is established by the Resolution of the Cabinet of Ministers of Ukraine No 2120 dated 22 November 1999.

An anti-discriminative investigation is initiated following the submission of an application by an entity engaged in foreign economic activities or an executive agency. Within 60 days of receiving the application, the Ministry must conduct an anti-discriminative investigation in order to determine the existence of discriminative or unfriendly actions that are causing injury or a threat thereof to the state and/or Ukrainian entities engaged in foreign economic activities.

Based on the results of an anti-discriminative investigation, the Ministry drafts a report with the relevant recommendations and submits it to the Commission on the decision to be adopted.

According to Article 29 of the Foreign Economic Activity Law, anti-discriminative measures can be introduced in the following forms:

full or partial bans on trade
termination of trade preferences
quotas
licensing of foreign economic operations
safeguard duties and
other measures envisaged by domestic legislation and international treaties

Ukraine has recently applied several anti-discriminative measures against Belarus.

See 5. Anti-dumping and countervailing (AD/CVD) for the discussion related to safeguard measures.

2.4 Key developments in customs measures

In 2021, Ukraine has started to implement the Authorised Economic Operator (AEO) Programme, which is intended to simplify customs formalities for businesses by delegating the responsibility for compliance with customs procedures to an AEO company. The introduction of the AEO Programme is based on the obligations of Ukraine under the EU–Ukraine Association Agreement. The work on the legal framework started in 2015, and the amendments to the Customs Code were introduced in 2019. The necessary by-laws were adopted in 2020, and the first AEO certificate was issued on 26 March 2021.

In addition, Ukraine has launched the implementation of the New Computerised Transit System (NCTS), the technology based on the European Convention on the Common Transit Procedure allowing the movement of goods between 35 countries: EU member states, European Free Trade Association (EFTA) countries, Turkey, Northern Macedonia and Serbia. The implementation of the NCTS is the prerequisite of the accession to the respective Convention.

2.5 Pending changes to customs measures

According to the public statements of the Ukrainian government, the primary objectives of further Ukrainian customs reform include the following:

the completion of the harmonisation of Ukrainian customs regulation with the EU legislation, primarily the EU Customs Code
the introduction of joint control and exchange of information between the EU and Ukraine and
the launch of a risk-oriented system of customs procedures

3. Sanctions

3.1 Sanctions regime

Sanctions are applied in Ukraine based on the Law “On Sanctions” No 1644-VII dated 14 August 2014 (the “Sanctions Law”).

According to the Sanctions Law, sanctions can be imposed on the following matters:

actions of a foreign country, a legal entity, an individual or other actors that:
1. create a real or potential threat to the national interests, security, sovereignty and territorial integrity of Ukraine
2. contribute to terrorist activity and/or violate the rights and freedoms of Ukrainian individuals and citizens, or the interests of society and the state
3. lead to the occupation of Ukrainian territory, the expropriation or restriction of property rights, damage to property, or the obstruction of sustainable economic development or the full exercise by citizens of Ukraine of their rights and freedoms or
4. execute any such actions in relation to any other country, its legal entities or citizens
resolutions of the UN General Assembly and Security Council
resolutions and regulations of the EU Council and
violations of the UN Universal Declaration of Human Rights 1948 and the UN Charter

The list of sanctions that can be imposed under the Sanctions Law includes:

asset freezing
limitation of trading operations
restrictions and full or partial termination of recourse transit, flights and transportation through the territory of Ukraine
bans on the export of capital from the territory of Ukraine
suspension of economic and financial transaction
annulment or suspension of permits and licences to carry out particular economic activities
prohibition on technology and IP rights transfers and
other trade-restrictive measures

3.2 Legal or administrative authorities imposing sanctions

As the primary legal act governing sanctions in Ukraine, the Sanctions Law sets out the general conditions under which sanctions may be imposed and the types of sanctions, designates the persons against which sanctions may be imposed, and so on.

The decisions to introduce, abolish and/or amend sanctions are enacted by decrees of the President of Ukraine.

3.3 Government agencies enforcing the sanctions regime

The National Security and Defence Council of Ukraine (NSDCU) is responsible for administering and enforcing sanctions in Ukraine.

The initiative to impose sanctions under the Sanctions Law can be taken by the Parliament of Ukraine, the President of Ukraine, the government of Ukraine, the National Bank of Ukraine and the Security Service of Ukraine.

Based on these proposals, the NSDCU adopts decisions to introduce, abolish and/or amend sanctions; these decisions are enacted by decrees of the President of Ukraine.

3.4 Persons subject to sanctions laws and regulations

The Sanctions Law distinguishes between Personal Sanctions and Sectoral Sanctions. Personal Sanctions may be introduced, inter alia, against a foreign country, foreign citizens, foreign legal entities and entities engaged in terrorist activities. Sectoral Sanctions may be imposed on an unlimited number of persons who conduct certain types of activities. No Sectoral Sanctions have yet been introduced in Ukraine.

3.5 List of sanctioned persons

From October 2021, the information on sanctions imposed in Ukraine is consolidated in the “List of Individuals and Legal Entities to whom Sanctions (Restrictive Measures) are Applied”, which is available at sanctions-t.rnbo.gov.ua.

This database is administered by the NSDCU based on the decrees of the President of Ukraine.

3.6 Sanctions against countries/regions

Ukraine does not maintain any comprehensive country-based or region-based sanctions. It has introduced personal sanctions against many persons and entities related to the Russian Federation (residing/registered in various countries), but not against the country as such. In addition, certain comprehensive trade-restrictive measures have been imposed against products originating in the Russian Federation (see 3.7 Other Types of Sanctions).

3.7 Other types of sanctions

In addition to sanctions imposed under the Sanctions Law, trade restrictions may be introduced based on Article 29 of the Foreign Economic Activity Law. In particular, in response to discriminative or unfriendly actions by a state recognised by the Parliament of Ukraine as an aggressor and/or an occupier, the government of Ukraine is entitled to impose trade restrictions (retaliatory measures) against such state.

The respective restrictions can be introduced in the following forms:

full or partial bans on trade
termination of trade preferences
quotas
licensing of foreign economic operations
safeguard duties and
other measures envisaged by domestic legislation and international treaties

Since 2016, and based on Article 29 of the Foreign Economic Activity Law, the Cabinet of Ministers of Ukraine (CMU) has been introducing the following trade restrictions against the Russian Federation.

The introduction of customs duties on all goods originating from the Russian Federation at the MFN rates envisaged by the Customs Tariff of Ukraine. The same restriction was imposed by Russia against goods originating in Ukraine. Thus, since 1 January 2016, the CIS FTA does not apply to trade relations between both countries, and the respective goods are not covered by a duty-free regime. The measure introduced by Ukraine is in force until 31 December 2021 and is likely to be extended for the next year (CMU Resolution “On Tariff Rates for Goods Originating from the Russian Federation” No 1146, dated 30 December 2015).

The imposition of a ban on imports of certain goods originating from Russia. In particular, Ukraine has prohibited the import of certain agricultural and industrial products, alcoholic beverages, tobacco products, medicines, fertilisers, etc. The measure is applicable until 31 December 2021 and is likely to be extended for the next year (CMU Resolution “On the Ban on Import of Goods Originating from the Russian Federation into the Customs Territory of Ukraine” No 1147, dated 30 December 2015).

The imposition of safeguard duties on imports into Ukraine of diesel fuel, liquefied gas, petroleum and coal originating in Russia. The measure is applicable until 31 December 2021 and is likely to be extended for the next year (CMU Resolution “On Application of Safeguard Duties to Imports of Certain Products with Origin in Russian Federation that are Imported into the Territory of Ukraine” No 719, dated 17 August 2020).

3.8 Secondary sanctions

Ukraine does not impose secondary sanctions.

3.9 Penalties for violations

Ukrainian laws and regulations do not provide for penalties for violating the Ukrainian Sanctions Law. At the same time, compliance with sanctions is strictly monitored by the state authorities and other agencies (including the Security Service of Ukraine, the State Customs Service of Ukraine, the National Bank of Ukraine, notaries and the state registrar).

In this regard, first, it is hardly possible to avoid compliance with the sanctions regime within the jurisdiction of Ukraine. Second, in the case of any co-operation with sanctioned persons (eg, entering into business operations), the sanctions will most probably be applied against such co-operating persons.

3.10 Sanctions licences

Sanctions licences are not available in Ukraine.

3.11 Compliance

Although there are no specific legal acts regulating compliance standards with the Sanctions Law, compliance with sanctions is strictly monitored by the state authorities (including the Security Service of Ukraine and the State Customs Service of Ukraine).

3.12 Sanction reporting requirements

In the course of enforcement of the Sanctions Law, Ukrainian banks are requested, inter alia, to submit the following information to the National Bank of Ukraine:

on balances of bank accounts of sanctioned persons (legal entities and private individuals)
on attempts to conduct financial transactions by sanctioned persons or their representatives and
on attempts to conduct financial transactions for the benefit of sanctioned persons, etc (Resolution of the National Bank of Ukraine No 654, dated 1 October 2015)

3.13 Adherence to third-country sanctions

Ukrainian law does not prohibit adherence to other jurisdictions’ sanctions. Moreover, Ukraine is currently taking steps to synchronise its sanctions with similar measures applied by the EU and the USA.

3.14 Key developments regarding danctions

The current sanctions regime was introduced in Ukraine in 2014 to respond to the annexation of Crimea and armed aggression in the Eastern part of Ukraine. Thus, during the first several years of the current sanctions regime, sanctions were introduced in Ukraine mostly against Russian individuals or persons related to the events in Crimea and the Eastern part of Ukraine. Currently, sanctioned persons (legal entities and private individuals) originate from Ukraine and many foreign countries (the British Virgin Islands, Estonia, Georgia, the UK, Cyprus, Finland, France, Hungary, Hong Kong, the Kyrgyz Republic, Lithuania, Luxemburg, Moldova, the Netherlands, Panama, Poland, Portugal, Russia, Singapore, Syria, Switzerland, the UAE and the USA). The inclusion of persons in the sanctions list is not necessarily related to the activity in Crimea or the Eastern part of Ukraine.

Several years ago, new sanctions were introduced two or three times per year. In contrast, about 20 decisions with sanction lists have been enacted in 2021.

Different enforcement authorities have started applying sanctions in practice more efficiently and more actively; eg, customs authorities refuse customs clearance declared by persons subject to sanctions, notaries refuse to notarise translations involving persons covered by sanctions.

At the beginning of October 2021, the NSDCU elaborated and put into operation the “List of Individuals and Legal Entities to whom Sanctions (Restrictive Measures) are Applied”, meaning that information on all sanctions is now consolidated and easily accessible in Ukraine and abroad.

According to the information provided on the website of the National Bank of Ukraine, “Ukraine is currently taking steps to update its sanctions legislation to implement international best practices. These measures will facilitate the synchronisation of sanctions imposed in Ukraine and similar measures applied by partner countries (EU, USA).”

3.15 Pending changes to sanction regulations

Several draft laws intended to reinforce the sanctions regime in Ukraine are currently pending before the Ukrainian Parliament.

First, the Parliament of Ukraine is considering the Draft Law “On Principles of Sanctions Policy in Ukraine” No 5191 (Draft Law on Sanctions). If it is adopted, the sanctions regime in Ukraine will change considerably. For instance, the Draft Law on Sanctions provides for a legal framework to enforce in Ukraine the sanctions imposed by the UN Security Council, international organisations, groups of foreign states or individual foreign states. Moreover, according to this Draft Law, “the restrictions or prohibitions on the activities of sanctioned entities” apply “regardless of whether such activities are carried out in Ukraine or abroad”. Thus, the Draft Law on Sanctions sets out a general framework for the extraterritorial application of sanctions enacted in Ukraine. The Draft Law envisages a possibility to apply criminal, administrative and other liabilities for violations of Ukrainian sanctions legislation.

4. Exports

4.1 Export controls

Ukraine is a member of the following international export control regimes:

the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies
the Missile Technology Control Regime
the Treaty on the Non-Proliferation of Nuclear Weapons and
the Australia Group

In order to protect national security interests and ensure compliance with its international obligations, Ukraine maintains state control over international transfers of military and dual-use goods.

4.2 Administrative authorities for export controls

The Law of Ukraine “On State Control over International Transfers of Military and Dual-Use Goods” No 549, dated 20 February 2003 (the “State Export Control Law”), is the primary legal act governing export control in Ukraine.

4.3 Government agencies enforcing export controls

The State Export Control Service is the authority responsible for state export control of military and dual-use goods.

4.4 Persons subject to export controls

Persons exporting or importing products for military purposes and dual-use goods are subject to export controls.

4.5 Restricted persons

Ukraine does not maintain a list of restricted persons.

4.6 Sensitive exports

Ukrainian export controls regulate:

military goods – the list of military goods is annexed to the Procedure for Exercising State Control over International Transfers of Military Goods, approved by CMU Resolution No 1807, dated 20 November 2003 and
dual-use goods – the list of dual-use goods is annexed to the Procedure of State Control over International Transfers of Dual-Use Goods, approved by CMU Resolution No 86, dated 28 January 2004

The above lists are compiled by the State Export Control Service and adopted by the government of Ukraine.

4.7 Other export controls

Depending on the nature of transactions and types of goods exported, special export procedures may apply, such as issuing export permits and conducting state inspections. Apart from military and dual-use goods, the respective export control procedures apply to goods of cultural value, drugs, psychotropic substances and their precursors, etc.

In addition, the Law “On Currency and Operations Connected with Currency”, dated 21 June 2018, regulates foreign currency payments involving Ukrainian companies.

4.8 Penalties

Depending on the nature of the violation, type of exported product, intention of the infringer and other factors, a violation of the export control regulations may lead to criminal, administrative and civil liability, including the imposition of fines and revocation/suspension of a permit for international transfers of military and dual-use goods, etc.

For example, the international transfer of goods without a permit of the State Service of Export Control amounts to 150% of the value of the transaction (Article 25(1) of the State Export Control Law). Smuggling – that is, the movement of certain goods across the customs border of Ukraine, bypassing customs control (including explosive substances, weapons and ammunition) – is punishable by imprisonment for a term of three to seven years. The same actions committed by a group of persons with prior collusion, by a person previously convicted of this criminal offence, or by a public officer are punishable by imprisonment for a term of 5–12 years and by confiscation of the goods (Article 201 of the Criminal Code).

4.9 Export licences

A permit of the State Service of Export Control is required for international transfers of military and dual-use goods (including import and export). For this purpose, an entity transferring military and dual-use goods must be registered at the State Service of Export Control. In addition, an entity transferring military goods or goods containing a state secret must obtain such authorisation from Ukraine’s government.

4.10 Compliance

According to the State Export Control Law, based on the recommendations of the State Service of Export Control, entities involved in international transfers of goods should establish a system of internal export control. The respective system of internal export control is mandatory for entities transferring military goods or goods containing a state secret. The State Service of Export Control conducts an assessment of the systems of internal export control established by the respective entities, based on which an assessment certificate is issued.

4.11 Export reporting requirements

Entities providing international transfers of military and dual-use goods and end-users of such products in Ukraine have strict reporting obligations before the State Service of Export Control.

Such obligations include reporting on end-use of military and dual-use goods subject to international transfers. Such reporting must be supported by documentary evidence confirming the end-use of the respective goods. The State Service of Export Control is entitled to conduct inspections to ensure that end-use of the respective products complies with the declared purposes.

4.12 Key developments regarding exports

In 2021, the Ministry commenced public consultations regarding the amendments to the State Export Control Law. The respective draft law has been elaborated by the State Export Control Service in order to, inter alia:

approximate the national export control regulation to the EU standards
shorten the timeframes of export control procedures and optimise the provision of administrative services in this field
mark the limit between the export control procedures over international transfers of military and dual-use goods and
establish clear criteria for adding items to the lists of goods subject to export control

4.13 Pending changes to export regulations

It is expected that the export control regulation in Ukraine may be amended based on the draft law elaborated by the State Export Control Service (see 4.12 Key developments regarding exports).

5. Anti-dumping and countervailing (AD/CVD)

5.1 Authorities governing AD/CVD

In addition to the relevant WTO agreements, trade defence remedies are regulated in Ukraine by the following laws:

the Law “On Protection of National Producers from Dumped Imports” No 330-XIV, dated 22 December 1998 (the “Anti-Dumping Law”)
the Law “On Protection of National Producers from Subsidised Imports” No 331-XIV, dated 22 December 1998 (the “Anti-Subsidy Law”) and
the Law “On the Application of Special (Safeguard) Measures against Imports to Ukraine” No 332-XIV, dated 22 December 1998 (the “Safeguard Law”)

The Intergovernmental Commission on International Trade (the “Commission”) is responsible for the adoption of key decisions in the course of AD/CVD and safeguard investigations, including on:

initiation of investigation and/or review
application of AD/CVD duties and safeguards and
termination of investigation/review without measures

The Ministry is responsible for all the procedural aspects of an investigation/review, namely:

collecting all necessary information and supporting documents by sending different requests, questionnaires, etc
holding hearings and consultations and
drafting a report following the results of an investigation/review, with recommendations to the Commission on the application of certain measures or termination of the investigation/review without measures, etc

5.2 Government agencies enforcing AD/CVD measures

The application of AD/CVD and safeguards is administered by the Ukrainian customs authorities.

5.3 Petitioning for a review

Depending on the type of investigation/review, the following companies are entitled to initiate a review.

Safeguard measures:

a basic investigation could be initiated upon a request of the domestic industry or by the relevant executive agency
an expiry review – Ukrainian law is silent as to the persons entitled to submit a petition for such review. However, taking into account the grounds for extension of duties (ie, (i) there is a necessity to continue the application of safeguard measures to prevent injury or to eliminate injury and (ii) there is evidence that domestic industry is in the process of adaptation to the new competition conditions), in practice such reviews are initiated by domestic industries only
a review to speed up liberalisation – a request for such review could be submitted by the State Customs Service of Ukraine or by the relevant executive agency
a reconsideration of the decision on the application of measures by the Commission within a 30-day period after adoption thereof – a request for such review could be submitted by the State Customs Service of Ukraine, domestic industry or the relevant executive agency

AD/CVD measures:

a basic investigation could be initiated upon a request of the domestic industry
a sunset review – a request for such review could be submitted by the domestic industry or by the relevant executive agency
an interim review – a request for such review could be submitted by the domestic industry, exporter or importer, or by the relevant executive agency
a newcomer review – taking into account that such review is initiated to determine individual dumping margin rates for foreign producers/exporters that have not exported their products to Ukraine during the investigation period, a request for review initiation shall be submitted by this foreign producer/exporter
an accelerated review could be initiated by an exporter that has exported its products to Ukraine during an investigation period but has not been recognised as an interested party based on reasons other than non-cooperation with the Ministry

5.4 Ad hoc and regular reviews

Ukrainian law does not stipulate reviews on a regular basis. The relevant companies can petition to initiate a review on an ad hoc basis upon the occurrence of the relevant grounds.

5.5 Non-domestic company participation

Ukrainian law defines a list of interested parties that may participate in the investigation/review widely, namely:

a foreign producer, exporter or importer or their association
the competent authorities of the exporting country
a national producer or wholesaler in Ukraine or its association
a trade union of employees of the domestic producers or the wholesaler and
executive agencies in Ukraine

Any person that has the relevant status – domestic or non-domestic – could be treated as an interested party of the investigation and could participate therein.

5.6 Investigation and imposition of duties and safeguards

In Ukraine, AD/CVD and safeguard investigations have the following stages:

upon receipt of a petition for investigation initiation, the Ministry shall start an AD/CVD/safeguard procedure to verify whether the petition contains sufficient grounds to initiate an investigation. Following the results of the petition consideration, the Ministry prepares a detailed report with a recommendation as to whether to initiate an investigation and provides such report to the Commission for the adoption of the relevant decision. The investigation shall be considered as officially initiated only after publication of a notice on the adopted decision in the governmental newspaper Uryadovyy Kuryer. Ukrainian law sets out that usually all such procedures shall take 30 days, but in practice the relevant terms could be longer.
registration of interested parties of an investigation – the relevant timelines are not set out by law, but usually a 30-day period is applied, starting from the publication date of a notice on investigation initiation.
submission of commentaries against an application on investigation initiation – the relevant timelines are not set out by law. In practice, a 45–60-day period is usually applied, starting from the publication date of a notice on investigation initiation.
submission of answer to questionnaire – in practice, questionnaires are sent to all interested parties 2–4 months after investigation initiation. Under the law, interested parties are initially granted 37 calendar days for answering the questionnaire. If needed and upon justified grounds, the interested parties are allowed to request an extension. Usually, the Ministry grants 14 days’ extension.
on-the-spot verification – Ukrainian law is silent on the relevant timelines. Usually, such verifications are conducted within 1–2 months after the questionnaire submission. Due to COVID-19, on-the-spot verifications have not been conducted since March 2020.
hearings are usually held at the final stage of an investigation, approximately 2–3 months before termination of an investigation. In Ukraine, the interested parties shall submit a position paper before hearings. After hearings (usually within 5–10 days), the interested parties shall submit their post-hearing submission. If not, the position will be disregarded.
preliminary determination shall be prepared by the Ministry following a review of all the relevant documents and evidences and shall be sent to all interested parties for review and commentaries. Usually, the determination is disclosed one month prior to termination of an investigation and up to ten days are granted to interested parties for drafting commentaries.
final determination and adoption of a decision following the results of an investigation – upon the receipt of commentaries on the preliminary determination from the interested parties, the Ministry shall finalise its determination and send it to the Commission for adoption of the relevant decision.
a notice on the adopted decision shall be published in Uryadovyy Kuryer and the applied measures shall enter into force within the period set out in the relevant notice – usually 30–60 days after publication.

5.7 Publishing reports

Ukrainian law does not oblige the Ministry to publish its reports. In AD/CVD cases, the Ministry sends reports to all interested parties of an investigation and must take into account their commentaries while finalising the reports. In safeguard cases, there is no well-established practice of the Ministry. In some cases, the Ministry sends the report to interested parties; in others, it does not. In any case, a brief overview of the key findings made during a safeguard investigation is published in notices on termination of investigation in Uryadovyy Kuryer.

5.8 Jurisdictions with no imposition of duties and safeguards

The relevant Ukrainian laws set out the following general rules for non-imposition of AD/CVD duties and safeguards as in the WTO.

AD measures

The AD investigation shall not be initiated in respect of countries with negligible import volumes; ie, if the volume of dumped imports from a particular country is found to account for less than 3 per cent of imports of the like product unless countries that individually account for less than 3 per cent collectively account for more than 7 per cent of imports of the like product.

Safeguards shall not apply to imports from developing countries that are WTO members if the volume of imports from this particular country is found to account for less than 3 per cent of total imports, unless the total share of all developing countries that are WTO members collectively accounts for more than 9 per cent of total imports.

CVD duties

CVD investigations shall not be initiated if subsidised imports of the WTO member constitute less than 1 per cent of the consumption volumes in Ukraine and the total imports of all WTO members collectively constitute less than 3 per cent of the consumption volumes in Ukraine. CVD duties shall not apply to the developing country that is a WTO member if the import volumes of such country constitute less than 4 per cent of the total imports of the like products from this country. However, CVD duties shall apply if the import volumes of the said developing countries exceed 9 per cent of the total imports of the like products.

Additional exceptions are set out by the bilateral free trade agreements of Ukraine. Particularly, the CIS FTA sets out that the parties agreed to exclude other parties from the application of safeguards if importation of the product concerned from such parties does not cause injury to domestic industry; that is, if the following conditions are simultaneously met:

the other party to the FTA is not among the top five exporters of the product concerned to the country imposing the measures for the past three years;
for the past three years, the volumes of imports from the other party decreased or increased by lower volumes (in absolute and comparative figures) than from other states; and
the level of prices for imported products from the other party is equal to or less than the level of prices of the domestic producer of like or directly competitive products.

The EFTA–Ukraine FTA excludes the application of anti-dumping duties between the parties during the first five years of the agreement implementation (ie, starting from 20 September 2012). Thereafter, the parties could reconsider the above provision that has not been made yet. Moreover, the parties shall not apply safeguards to each other if imports of the relevant party do not cause serious injury. At the same time, the agreement is silent on the applicable criteria.

The Israel–Ukraine FTA excludes the application of safeguards between the parties if imports from the relevant party do not cause serious injury; ie, if the growth rate of imports of the relevant party is considerably lower than the growth rate of total imports from all sources.

5.9 Frequency of reviews

As for interim, newcomer and accelerated reviews of AD/CVD duties, they shall be conducted only in situations when all relevant circumstances occur and upon a request of the entitled person. In the case of sunset reviews of AD/CVD duties, they shall be conducted every five years, if requested by the domestic industry or by the relevant executive agencies. If not, after a five-year period, the duties will terminate automatically.

As for a review of safeguards to speed up liberalisation, again, it could be initiated at any time when the State Customs Service of Ukraine or the relevant executive agency has justified grounds to initiate a review. An expiry review of safeguards could be initiated by the end of the initial period of application thereof. The relevant law directly sets out that the safeguards shall initially apply for a maximum of four years with a possible further extension. However, in any case, safeguards shall not apply for more than eight years.

5.10 Review process

Notably, newcomer and accelerated reviews of AD/CVD duties and reviews of safeguards to speed up liberalisation have not been conducted in Ukraine yet. Therefore, it is hardly possible to predict the process of such reviews.

As for sunset and interim reviews of AD/CVD, in practice the same procedure is applied as set out in 5.6 Investigation and imposition of duties and safeguards. The only difference is the applicable terms – basic investigations could be conducted within 12–18 months, while reviews could take a maximum of 12 months.

Ukrainian law does not precisely define how an expiry review of safeguards shall be performed. In practice, the Ministry tries to follow the same procedure as described in 5.6 Investigation and imposition of duties and safeguards, but such procedure is usually held within a very limited period

5.11 Appeal process

AD/CVD duties and safeguards could be appealed before Ukrainian courts. Notably, the relevant request to challenge the duties shall be submitted within one month after the adoption of the relevant decision by the Commission.

5.12 Key developments regarding AD/CVD measures

Ukrainian laws in the field of trade defence proceedings have not been changed for many years, even though they are outdated and do not address many issues. Therefore, enforcement and litigation developments are of high importance.

In 2021, a safeguard investigation related to imports of wires was, indeed, a benchmark one. Following the results of the investigation, the Commission adopted a decision on the application of safeguards that was published in Uryadovyy Kuryer on 14 September 2021. Taking into account that wires are socially important products, the end customers of wires have submitted many objections to the Ministry against the decision. In the end, on 25 September 2021 the Commission initiated a review of the applied measures. Following the results of the review, on 13 October 2021 the Commission decided to terminate the safeguard measures because the measures violated the national interest. This is the first time in the history of Ukraine when such a review was engaged.

It is worth emphasising that in Ukraine there are more and more cases that have been terminated without measures because of a recall by the domestic industry of an application on investigation initiation. In 2021, such situation took place in the safeguard investigation related to imports of ceramic tiles. The relevant investigation was initiated on 1 June 2021 and already terminated on 23 July 2021.

In 2021, for the first time in the history of Ukraine, the Commission adopted a decision on the refund of preliminary safeguards paid in excess of definitive safeguards. On 22 May and 20 June 2020, the Commission applied preliminary safeguard duties to all types of polyvinylchloride imported to Ukraine at the rate of 18 per cent. However, on 21 November 2020, the Commission applied definitive safeguard duties at the rate of 12 per cent that was applied not to all types of polyvinylchloride subject to preliminary measures.

Moreover, Ukrainian case law has already addressed many important issues; the following are but a few.

The decisions on the application of measures shall be challenged only by importers, not by foreign producers or end customers.
The said decisions shall be challenged not later than within one month after their adoption. Notably, under Ukrainian law, there are three dates related to the application of trade defence remedies:
- the date of adoption of the decision by the Commission
- the date of publication of notice on application of trade defence remedies in Uryadovyy Kuryer and
- the date of entering of remedies into force – usually 30, 45 or 60 days after publication of the relevant notice

Usually, together with lawsuits, plaintiffs request Ukrainian courts to apply injunctive reliefs suspending the applied measures. However, there is well-established practice at the level of the Supreme Court of Ukraine that such reliefs are not satisfied.

Ukrainian law does not stipulate special treatment for confidential information submitted during investigations in the court proceedings. Under Ukrainian law, all materials in the court case are public (ie, available to anybody; that is, published in the public registers of court decisions) or closed (available to parties of the court proceedings that are usually direct rivals). Therefore, while challenging decisions of the Commission, the interested parties shall be ready to disclose all their confidential information.

5.13 Pending changes to AD/CVD measures

The Ministry has elaborated five draft laws, considerably changing the current regime applicable to trade remedies. Specifically, the draft laws define in detail the investigation procedure (major stages and applicable deadlines), enforcement of the relevant court decisions and the recommendations adopted following the results of the WTO dispute settlement proceedings. Adoption of the draft laws would considerably improve the investigation procedure and make them more transparent. However, unfortunately, at the moment, it is not clear when the draft laws will be adopted.

6. Investment security

6.1 Investment security mechanisms

At the moment, Ukraine has no foreign investment security/screening mechanisms. Please see 6.8 Key developments regarding investment security with respect to the recent government initiative to launch the respective procedure in Ukraine.

6.2 Agencies enforcing investment security measures