Proposed amendments to tariff quota distribution procedure for raw cane sugar import to Ukraine create prerequisites for restraint of competition in Ukrainian sugar market
Kyiv. February 3, 2011
The Cabinet of Ministers of Ukraine (the CMU) proposed amendments to the procedure of tariff rate quota distribution applied to raw cane sugar import to Ukraine, whereby creating prerequisites for restriction of competition in Ukrainian sugar market, which is unallowable in terms of sugar deficiency in the market.
Although introducing ‘first come, first served’ principle Ukraine fulfils its WTO commitments, the drawback of the document cannot be but mentioned, namely, creating preconditions to limit competition in the market.
In case licence issue depends on the State Reserve Agency’s consent, it may be considered as an action able to restrict competition. Besides, such condition complicates administrative course of the licence issue procedure, which conflicts with the fundamental WTO principles.
Today, we see an explicit tendency towards tighter regulation of the agricultural products market and a sugar sector, in particular. In addition to the aforementioned, changes were also offered into the Law “On State Regulation of Sugar Production and Sale” that envisages the establishment of several commissions – technical, joint commission, and approval commission. However, the aim of their establishment and division of powers are far from being clearly outlined. The only undoubtful and clear point is that they may become another administrative barrier for sugar producers.
Andrii Zablotskyi, associate with Volkov and Partners