  
  
G/SG/Q2/UKR/8  
G/SG/Q2/UKR/9  
27 May 2021 
(21-4413) Page: 1/5 
Committee on Safeguards  Original:  English  
 
  
NOTIFICATION UNDER ARTICLE  12.1(B) OF THE AGREEMENT  ON 
SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT  
THEREOF CAUSED BY INCREASED IMPORTS  
NOTIFICATION OF A PROPOSAL TO IMPOSE A MEASURE  
NOTIFICATION PURSUANT TO ARTICLE  9, FOOTNOTE  2 
OF THE AGREEMENT ON SAFEGUARDS  
REPLIES TO QUESTIONS POSED BY ECUADOR1 REGARDING  
THE NOTIFICATION S OF UKRAINE2 
Fresh cut roses  
The following communication, dated and received on 26 May 2021 , is being circulated at the request 
of the delegation of Ukraine . 
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1  Responses to questions contained in G/SG/Q2/UKR/6  
Question 1  
On 12  June  2020, notification G/SG/N/6/UKR/18 announced that Ukraine had initiated a 
safeguard investigation on imports of fresh cut roses. However, Ukraine initiated that 
investigation on 28  May 2020, in accordance with the Decision of the Interdepartmental 
Commission for International Trade No.  SP-449/2020/4411 -03, i.e. 15 days before the 
Committee on Safeguards was notified. Could Ukraine therefore clarify why it did not 
make the notification "immediately" upon initiating the investigatory process, as 
stipulated in Article 12.1(a) of the WTO Agreement on Safeguards?  
Reply : 
There was a delay in the notification the Committee on Safeguards due to the introduct ion of 
quarantine measures on the territory of Ukraine at th e time aimed at preventing the spread of 
COVID -19 and putting all  authorities in remote work . This in some way affected the operation of 
automated information and communication systems and led to a slowdown in information exchange.  
At the same time, the competent authority of the Republic of Ecuador was duly registered as an 
interested party and ha d the opportunity to defend its interests throughout the investigation.  
 
1 G/SG/Q2/UKR/6  and G/SG/Q2/UKR/7.  
2 G/SG/N/6/UKR/18 , G/SG/N/8/UKR/10 - G/SG/N/10/UKR/10 - G/SG/N/11/UKR/8 and 
G/SG/N/8/UKR/10/Corr.1 - G/SG/N/10/UKR/10/Corr.1 - G/SG/N/11/UKR/8/Corr.1.  G/SG/Q2/UKR/8 • G/SG/Q2/UKR/9  
- 2 - 
  Question 2  
Can Ukraine confirm  whether the figures provided by domestic industry representatives 
were corroborated by data from public institutions such as customs, the central bank or a 
statistics agency. If so, please provide official data on the various parameters analysed.  
Reply : 
During the safeguard investigation, the accuracy of indicators in the complaint of the domestic 
industry was checked, in particular on the basis of data from Ukrainian customs and statistical 
authorities . The notification under Article 12.1 (b)  of th e Agreement on Safeguards  contains 
indicators (taking into account  the need to preserve  confidentiality), which gave grounds to 
recommend the application of safeguard measures for the import of fresh cut roses.  
Question 3  
Could Ukraine indicate whether, when  analysing similarities between imported and 
domestically produced goods, it also analysed product quality, seasonal variation in 
production and end uses?  
During the investigation competent authorities defined  that the imported and domestically produced 
products are similar in functional purpose, technological p roperties, production processes  and 
according to the Harmonized System . 
Question 4  
According to notification G/SG/N/6/UKR/18 of 12  June  2020, the investigation was 
initiated pursuant to the petition of the domestic industry, in particular by LLC "Ascania 
Flora". In other words, the petition was from a single party, therefore the investigating 
authority for trade remedies should have reviewed the representativeness of the domestic 
industry. Co uld Ukraine therefore specify which part of the report supports the initiation 
of the investigation or whether it analysed the representativeness of the domestic 
industry? In other words, does the petition represent the producers as a whole of the like 
or directly competitive products operating within the territory of a Member, or those 
whose collective output of the like or directly competitive products constitutes a major 
proportion of the total domestic production of those products, as per Article 4.1(c)  of the 
WTO  Agreement on Safeguards?  
Reply : 
According to the results of the investigation, it was determined that LLC "Ascania Flora" is the largest 
producer of  fresh cut roses in Ukraine, and its share in the domestic production , in the period from 
01.01. 2017 to 30.06.2020 , was more than 50 %. Therefore, the Applicant constitutes a major 
proportion of the total domestic production of those products, as per Article 4.1(c) of the WTO 
Agreement on Safeguards.  
Question 5  
Could Ukraine advise whether it will ana lyse the position of the industry in the years prior 
to the investigation period, since the request for this investigation may be an attempt to 
compensate for losses related to the Covid -19 global pandemic. In other words, based on 
Article 5.2(b) of the WT O Agreement on Safeguards, will Ukraine review whether factors 
other than increased imports exist?  
Reply : 
During the investigation the competent authority examined the existence of othe r factors other than 
increased imports and defined that the other facto rs did not have a decisive impact  on the 
deterioration of the financial and economic situation of the domestic industry . 
 G/SG/Q2/UKR/8 • G/SG/Q2/UKR/9  
- 3 - 
  Question 6  
Could Ukraine specify whether it has complied with the requirement to notify the 
Government of Ecuador (the exporting country) that it has initiated the investigation in 
accordance with the Ukrainian Law on Safeguards, based on WTO provisions? If it has, 
please specify the document number, initiation date and notification date.  
Reply : 
Pursuant to the  provisions of Article 23 of the Law of Ukraine "On the application of safeguard 
measures regarding imports to Ukraine"  the Ministry of Foreign Affairs of Ukraine notified  on the 
initiation of the investigation the embassies of major export countries in Ukraine, inclu ding the 
Honorary Consu late of Ecuador in Ukraine (notification № 51/23 -010-1639, dated  16 July 2020).  
2  Responses to questions contained in G/SG/Q2/UKR/7  
Question 1 
Pursuant to Article 5 of the WTO Agreement on Safeguards, "a Member shall apply 
safeguard measures only to the extent necessary to prevent or remedy serious injury and 
to facilitate adjustment".  
However, for the first year of application of the measure, U kraine is applying a tariff 
surcharge of  56% in addition to the current ad valorem tariff of  7.5%. This surcharge will 
lead to the overprotection of the Ukrainian domestic industry due to the increase in the 
average import price, which, in turn, will compl etely displace exports from Ecuador and 
the rest of the countries supplying the Ukrainian market.  
In this connection, Ecuador would like to ask Ukraine the following: On the basis of which 
parameters was the 56% tariff surcharge determined and how is it en sured that this 
surcharge does not result in the overprotection of the domestic industry, in breach of the 
provisions of the WTO Agreement on Safeguards?  
Reply : 
Following the analysis of evidences, it was determined that the import prices of the product 
concerned during the investigation period were significantly lower than the sales prices and costs of 
the domestic like product . Preliminarily, in order to the  extent necessary to remedy serious injury 
Ukraine ha d proposed to apply 139.7 safeguard duty as was indicated in notification under 
Article  12.1 (b) of the Agreement on Safeguards . However taking into account the position of 
exporters and other interested parties in this safeguard investigation Ukraine decid ed to reduce the 
level of duty to 56 % with 20  per cent  yearly liberalization . This confirms balanced Ukrainian 
approach to calculation of safeguard duty that is necessary to remedy serious injury.  
Question 2 
In accordance with Article 4.2(b) of the WTO Agr eement on Safeguards, a determination 
of serious injury shall not be made "unless this investigation demonstrates, on the basis 
of objective evidence, the existence of the causal link between increased imports of the 
product concerned and serious injury or  threat thereof."  
As is clear from the information published to date, both the application submitted by the 
industry and Resolution No. SP -487/2021/4411 -03 of 16 April 2021 of the Commission 
lack a comprehensive and objective analysis of the injury variabl es and of the existence 
of a causal link.  
In this connection, Ecuador would like to ask Ukraine the following: In which periods is 
there a coincidence in time between the increased imports and the variables showing 
alleged serious injury under the WTO Agr eement on Safeguards in order to demonstrate 
the causal link?  G/SG/Q2/UKR/8 • G/SG/Q2/UKR/9  
- 4 - 
  Reply : 
According to the official statistics of Ukrainian State Customs Service during the investigation period : 
import volumes of the product increased by 68.68 % in absolute terms ; import volumes relative to 
domestic production increased by 72.33 % and by 40.11 % relative to consumption  in Ukraine . 
Therefore, t hroughout the investigation period, an increase in imports was a significant  enough , 
sudden  enough , recent enough and sharp enough . Following an  increase of imports and a significant 
increase of the import`s share in domestic market, the domestic producer sold its own products 
below the cost of its production.  
Thus, the key financial and economic indicators of the domestic producer have decreased : the sales 
and production volumes, the share in the domestic market, the employment, the los s from the sale 
of the product, the investments . Thus, all the above facts confir med the existence of a causal link 
between increased imports of the product concerne d at low prices and the deterioration of the 
financial and economic situation of the domestic industry . 
Question 3 
With regard to the consultation process and pursuant to Arti cle 12.3 of the 
WTO  Agreement on Safeguards, does Ukraine consider that it has complied with the 
mandate and the requirement to provide an adequate opportunity for prior consultations 
with those parties having a substantial interest in the investigation pr ocess, with a view 
to reviewing the information concerning, for example, the increased imports or to 
exchanging views on the measure?  
Reply : 
Pursuant to Article 12.1(b) of the Agreement on Safeguards, Ukraine notified on finding a serious 
injury or threat thereof to the domestic industry producing fresh cut roses and on proposed 
safeguard measures (notification on the WTO website G/SG/N/8/UKR/10 G/SG/N/10/UKR/10 
G/SG/N/11/UKR/8 , dated  15 January  2021). This notification contains all pertinent information 
relating to the proposed safeguard measures in accordance with Article 12.2 and an offer for prior 
consultations pursuant to Article 12.3 of the Agreement on Safeguards.  
According to the notification Ukraine propose d to hold the consultations with m embers having a 
substantial interest as exporters of the product concerned in the form of an exchange of views by 
providing the information in writings or by means of videoconference.  
Ukraine did not receive appropriate request for prior consultations from Ecuador.  
Question 4 
In relation to the investigation procedure and in accordance with Article 3.1 of the 
Agreement on Safeguards, could Ukraine please explain the reason for which the 
competent authority neither publish ed nor provided parties interested in the process with 
a report detailing all the issues of fact and law that provide the technical justification for 
the decision to adopt the safeguard measure?  
Reply : 
This investigation was carried out in full compliance with requirements of the national legislation of 
Ukraine  and provisions of the WTO Agreement on Safeguards . The provisions of Article 3.1 of the 
Agreement on Safeguards does not envisage sending a report to the interested partie s detailing all 
the factual and legal issues that technically support the decision to adopt the safeguard measure.  
Ukraine published  its findings and reasoned conclusions reached on all pertinent issues of fact a nd 
law as required  of Article 3.1 of the Agreement on Safeguards  (official newspaper "Uryadovyi 
Courier " No.76 , dated  of 21 April 2021). G/SG/Q2/UKR/8 • G/SG/Q2/UKR/9  
- 5 - 
  Pursuant to Article 12.1(b) of the Agreement on Safeguards, Ukraine notified on finding a serious 
injury or threat thereof to the domestic industry and on proposed safeguard measures (notification 
on the WTO website G/SG/N/8/UKR/10 G/SG/N/10/UKR/10 G/SG/N/11/UKR/8 , dated  
15 January  2021). This notification contains all pertinent information relating to the proposed 
safeguard measures in accordance with Article 12.2 of the Agreement on Safeguards . 
 
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