Trade Remedies in Ukraine
Ukrainian Law Firms 2009
Since the accession to the World Trade Organization, Ukraine faces a challenge to balance between its international commitments to liberalize the domestic measures to encourage international trade and the domestic pressures to ensure that the trade is “fair”. Currently, the national laws are consistent with the Ukraine’s international obligations arising from the WTO trade remedy provisions agreed to as part of the Uruguay Round of multilateral trade negotiations (1986-1994), particularly the WTO Anti-dumping Agreement, WTO Agreement on Safeguards and WTO Agreement on Subsidies and Countervailing Measures, and other trade agreements to which Ukraine is a party. However, laws of Ukraine as well provide a number of effective avenues for domestic industries to seek relief when they believe they have been injured by imports or unfair trade practices.
Actually, according to the mentioned below national laws, there are a few instances when the domestic industry may feel that imports are not competing fairly in the domestic market: when the producer of the imported goods is being subsidized by its own government, or when the imported goods are being dumped (sold at an unfairly low price) in the country of import, or when there is a sudden surge in imports, whether or not subsidies or dumping are involved. In each of these cases, the law devises domestic remedies to address the concerns of the domestic industries. In the case of subsidies the law provides the procedures to assess and impose countervailing duties to offset the subsidies, in the case of dumping the law provides the procedures to assess and impose anti-dumping duties, and in the case of import surges the law provides procedures to assess and impose emergency measures called special safeguards to limit imports temporarily.
Taken together, safeguard measures, countervailing duties and antidumping duties are often called as “trade remedies”. The Ministry of Economy of Ukraine, the State Customs Service and the Interdepartmental Commission on International Trade are competent bodies to conduct the anti-dumping investigation, safeguard investigation or anti-subsidizing investigations, each within its own competence. Their correspondent competence as well as the procedures of the said investigations are provided by the On Protection of National Producer against Dumped Import Act of Ukraine, On Application of Safeguard Measures against Import to Ukraine Act of Ukraine, and On Protection of National Industry against Subsidized Imports Act of Ukraine.
Actually, anti-subsidy and safeguard investigations are not so popular with the Ukrainian national producers, in contrast to vast range of anti-dumping investigations.
Presently, Ukraine applies fourteen anti-dumping measures imposed on the import of the following goods: fibreboards originating from Poland, Russia and Belarus, citric acid originating from China, wood shaving sheet originating from Poland and Slovakia, screw compressor systems originating from Belarus, Italy, Belgium, Finland, artificial fur and terry fabrics originating in Belarus, asbestos-cement knurled sheets originating from Russia, electric filament lamps originating from China, refrigerating and freezing equipment originating from China and Turkey, abrasive tools originating from Russia, ammonia nitrate originating from Russia, products manufactured from ferrous materials without electrical insulation originating from China, crossing pieces originating from Russia. This year three anti-dumping investigations were initiated. These concern the import of lactic acid from China, pile and terry fabrics from China, Korea and syringes from China, Spain, Germany and Great Britain complies with antidumping legislation.
In respect of safeguard measures, this year not a single safeguard investigation was initiated. In 2007 the investigation in respect of seamless steel casing tubes and pumping compressor tubes was terminated by imposition of safeguard measures, and one more investigation in respect of polyvinylchloride (PVC) profile for manufacturing of windows and doors was terminated without the imposition of safeguard measures. Currently Ukraine applies seven safeguard measures imposed on import of abrasive tools, ruberoid, ball-bearings, textile fabric, cotton fabrics, gasdischarge lamp, seamless steel casing tubes and pumping compressor tubes.
Safeguard measures are applied in Ukraine in case a safeguard investigation finds that the increased import to Ukraine causes financial injury or threat to cause financial injury to Ukrainian domestic producers of similar goods or directly competitive goods. In contrast to anti-dumping measures, safeguard measures are applied to imported definite product from all countries regardless of the country of origin.
Anti-subsidizing investigations have never been initiated in Ukraine. Actually, a national producer is required to prove that the subsidized import has caused financial injury or threat of financial injury or it creates obstacles to increasing the production of goods under investigation. Only “specific subsidies” can be grounds for application of countervailing measures. These are: a subsidy provided to a particular company or companies; a subsidy provided for particular sector(s) of industry; a subsidy provided to producers located in a geographically determined region; a subsidy provided upon the results of export performance or upon use of domestic goods instead of imported ones. Countervailing measures are applied in the form of countervailing duty only.
It is the responsibility of the Ministry of Economy of Ukraine to conduct investigations aimed at identifying the presence and the impact of dumping or subsidy or injury caused by the increase of imports.
To start the anti-dumping process, the Ukrainian domestic producer of the goods, that are similar to those produced by the foreign manufacturer and those the aggregate amount of which makes up a key part of the entire production, shall file a written complaint with the Ministry of Economy of Ukraine, if it suspects that the imported goods are being dumped and are causing damage to the complainant. An association of producers may not file a complaint on behalf of its members.
The complaint shall contain the evidence of the presence of dumping and damage that are said to take place and the cause-and effect relationship between them, the information as to volumes and value of production of similar goods by the applicant in Ukraine; description of goods which are said to be a subject of dumping, name of the country of origin or export; prices at which goods which are a subject of the complaint, are sold for consumption in the domestic market of the country of origin or export and information on export prices, or prices at which the goods are first resold to an independent buyer in Ukraine; volumes and dynamics of imports regarded as dumped, the effect of these imports on the prices of similar goods on the Ukrainian market, as well as the consequence of such import, which is a result of the effect of these two factors, for the national producer.
The investigation shall be initiated provided the Ministry and the Commission determine that the complaint has been submitted by a national producer. The complaint shall be considered as submitted if it is backed by those Ukrainian producers whose aggregate production constitutes more than 50 % of the total production volume of similar goods, produced by that part of national enterprises, which supports the complaint or expresses objections.
The investigation is started by the Ministry of Economy of Ukraine on the basis of decision from the Interdepartmental Commission on International Trade. The Commission consists of 15 members which represent different state bodies: the Industry Ministry, the Foreign Ministry, Justice Ministry, the Customs Service, Antimonopoly Committee and others. It is headed by the Minister of Economy acting ex officio.
The investigation being launched, the Ministry shall inform all known exporters, importers, governments of country of export and the complainant about the start of investigation. The Ministry may provide these persons and other interesting parties with non-confidential version of the complaint upon their written request.
The Commission shall publish the notification on initiation of the anti-dumping investigation in the Governmental newspaper “Uriadovyj Kurier”. In such notification the Commission inter alia informs about the deadline for registration of interested parties to the antidumping investigation. The period of time for registration of interested parties usually amounts to 30 days starting from the date of publishing of notification. It is quite important for producers, exporters, importers and other possible interested parties to meet the deadline for registration. Only registered interested parties can participate in investigation and submit evidence to the investigating authority.
The Commission can decide to apply the provisional anti-dumping, prior to resorting to the final measures. Such measures may be taken in the course of an investigation if the Ministry has made a preliminary positive conclusion on the presence of dumping and damage that is a consequence of such dumping; and the national interests require application of the provisional measures in order to prevent the threat of damage.
The term of investigation may not exceed one year since the date a decision on initiation of investigation comes into effect. If the findings of investigation are in favour of a domestic producer, the Interdepartmental Commission on International Trade on the basis of report from the Ministry shall make decision on application of anti-dumping duty for a term necessary to remove the dumping. The decision on its application shall lose its validity in five years.
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Finally, keeping of balance between the need to regulate and minimize unfair trade practices and assisting domestic import-competing industries to become more internationally viable presents Ukraine with unique challenges. We believe its membership in the World Trade Organization could be a guarantee that any measure taken shall be compatible with the WTO rules and thus predictable and clear.
is an Attorney at law with
Volkov Koziakov & Partners law firm
is an Senior Associate with
Volkov Koziakov & Partners law firm