RESTRICTED
WORLD TRADE WT/ACC/UKR/7
16October 1995
ORGANIZATION(95-3040)
Original: English
ACCESSION OFUKRAINE
Additional Questions andReplies
TheGovernmental Commission onUkraine 'sAccession totheWTO hasprovided thereplies
reproduced hereunder tothequestions submitted bytheUnited States. Theletter "n"after thenumber
denotes questions submitted after theWorking Party meeting held on27-28 February 1995.
_______________
TABLE OFCONTENTS
Questions
II. Economy andForeign Trade 1-3
Pricing Policy 5-6, 13n-15n, 19n-26n,
III. Foreign Trade Regime
1. Imports Regulation 8n-12n
Customs Tariff 10-14, 19-20, 22-23,
37n-41n, 52n, 53n42,55
Special duties 15,16,21,24,42n, 43n, 44n
Anti-Dumping andCountervailing Measures 17,16n, 42n, 45n-51n,
Safeguard Measures 18,16n, 42n, 46n,
Customs Processing Fee 26,34,57n, 58n
Import taxation regime 25,27-32, 60,61,52n,
54n, 55n, 59n-66n,
Customs Valuation 33,67n
Non-tariff Measures, Quotas andLicensing Regime 35-39, 68n, 69n
Rules ofOrigin ofGoods 40,41,42,75n-77n
Standards andCertification 43,45-47, 78n-81n
2. Export Regulation 49-51, 52n, 56n,
70n-72n, 83n-93n
Subsidies/Export stimulation measures 4,52-55, 1n-4n, 7n
IV. Other Policies Related toForeign Trade
Agricultural Policies 44,57-59, 5n-6n, 73n,
74n, 94n-97n
Exchange Controls andSystem ofSettlements 62-64, 98n-104n
5. Investment Policies 65-72, 105n-108n
6. Government Procurement 73-75, 78,109n-110nWT/ACC/UKR/7
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State trading 76,77,79,111n-120n
Privatization 7-9, 56,76,17n-18n, 27n-36n
8. Special Economic Zones 80,121n-122n
9. TRIPS 81-115, 123n-132n
V. Institutional Board ofTrade andEconomic Relations
1. Bilateral Agreements 116-118, 133n-139nWT/ACC/UKR/7
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II. Economy andForeign Trade
1. Economy
IMD
Question 1.
Please describe theState supports provided tostrategic areas oftheeconomy referred toin
thissection [Economy andForeign Trade -Main Directions]. Please listanyareas other than power
engineering, metallurgy, coal, andchemicals thatreceive thistype ofsupport.
Reply 1.
TheState budget ofUkraine approved for1994 envisaged subsidies granted totheproduction
ofcoalandgas. Inconnection with theimplementation oftheProgramme ofthePresident, measures
arebeing taken tocutsubsidies toenterprises andtothepopulation (liberalization ofretail andwholesale
prices), thereleased funds being directed tosocial protection ofpeople ofnomeans.
The programme ofState supports forstrategic areas ofthenational economy and of
encouragementfortheexportofdomesticproductsisimplementedbyusingStatemeasuresforsupporting
production andexport rather thanthrough thegranting ofsubsidies. These State measures willinclude
elimination ofcustoms tariffs andvalue-added taxonUkrainian exports; creating aunified currency
exchange rate. Also, setting lower income taxes fortheexport ofhigh-technology andhigh- quality
finished products thanthetaxes ontheexport ofrawmaterials andintermediate goods willbeeffected.
Atthesame time, limited State funding isintended forbasic scientific research anddevelopment of
high level technological products. And, inaddition, implementing marketing studies toencourage
theaccess ofUkrainian products inforeign markets.
Question 2.
Please elaborate onhowtheGovernment ofUkraine specifically intends toreduce thenegative
trade balance tonomore than5percentofGDP. How willthe"substantial cuts" innon-critical imports
beachieved?
Reply 2.
Thereduction ofthenegative trade balance willbefacilitated byliberalization oftheexport
ofgoods andservices andunification ofexchange rates. Theproblem willbeaddressed bythefollowing
twomethods: anoverall encouragement toexport (1994 exports were 1/3thelevel of1991) anda
temporary limitation onnon-essential imports.
Toreduce thenegative trade balance byaconsiderable reduction innon-essential imports, the
Decree ofthePresident "OnMeasures toImplement anIntegrated State Policy ofImport Regulations,"
21September1994,createdaGovernmentalCommissiononproblemsofimportregulation.Theprimary
objectives ofthisCommittee arethepreparation ofproposals, their implementation andtheintroduction
ofmeasures related to:
- reduction ofthenegative trade balance andimprovement ofthebalance ofpayments;
- protection oftheinterests ofenterprises ofUkraine against unfair competition,
prevention ofsuch competition byenterprises, both Ukrainian andforeign, thatimport
goods andservices intoUkraine;WT/ACC/UKR/7
Page 4
- reduction ofthevolume ofnon-essential imports, determination ofthelistofessential
imports andcreation offavourable conditions forthem aswell;
- elaboration ofamechanism forputting intopractice theuseofunilateral constraints
onimports incompliance with GATT/WTO Article XIX standards andprinciples;
- compiling alistofnon-essential imports forparticular sectors ofthenational economy;
- identification ofgoods currently imported which could beproduced inUkraine and
preparation ofproposals onpreferential taxandcredit terms fordomestic producers
ofthese goods;
- developing amethod todefine whether there isconformity ofprices forimported goods
andservices with thefairmarket price established inthedomestic market; developing
amechanism during thetransition toamarket economy forstarting theuseoftariff
regulation inthecase ofunfair, overvalued prices.
Itwillbenecessary tomake optimum useofcurrency policy. This isaccomplished bythe
Decree ofthePresident of22September 1994, "On Perfection ofCurrency Regulation" andby
implementing thePresidential Decree "On Measures toImplement aUnified Policy ofImport
Regulations" of21September 1994. Incompliance with thelatter, inpurchasing technological and
similar equipment tobeincorporated into thecapital oftheState-owned enterprises and the
products/services tobeimported attheexpense ofState budget, ifthese equipment, products andservices
costover US$100,000, thedeals aretoberealized onthebasis ofinternational norms ofcompetitive
bidding.
Question 3.
Please describe the"lease relations" between theState andother entities referred tointhis
section.
Reply 3.
Lease regulations inUkraine aregoverned bytheLaw ofUkraine "OnLeasing oftheProperty
ofState-Owned Enterprises andOrganizations" of10April 1992, No.2269-XII. Law ofUkraine "On
LeasingofthePropertyofState-OwnedEnterprisesandOrganizations"of10April1992,No.2269-XII.
Incompliance with thislaw, leasing isaprerogative oftheFund oftheState Property inthecase of
integratedpropertycomplexes,i.e.,thosewithaportionofownershipbelongingtotheState,enterprises,
organizations andtheir structural branches that make uptheState property; thebodies authorized
bytheSupreme Rada oftheRepublic ofCrimea andlocal Rada 'sofpeoples 'deputies to
exercise control over property owned byeither theRepublic ofCrimea orthelocal Radas; and
State-owned enterprises andorganizations inthecase ofintegrated property complexes which can
lease their structural branches (subsidiaries, workshops).
Anyone canbealeaseholder. Theleaseholders canbeorganizations made upofmembers
ofwork collectives ofaState-owned enterprise ororganization ortheir structural branches. Leaseholders
canalsobecitizens andjuridical persons ofUkraine, foreign States andinternational organizations.WT/ACC/UKR/7
Page 5
2. Export Regulation
Subsidies/Export Stimulation Measures
Question 4.
Please elaborate ingreat detail regarding how Ukraine will promote thedevelopment and
international competitiveness ofitsindustries.
Will Ukraine relyprimarily ongovernment supports andState aidsdesigned toassist industry
intechnology upgrades andtransfers andR&D, orwillitrelyprimarily onsupports designed toincrease
theprice competitiveness ofUkrainian producers?
Will Ukraine 'sapproach vary byindustry orsector and, ifso,how?
How willUkraine 'spolicies toward nascent andestablished industries differ?
Incarryingoutitsindustrialdevelopmentobjectives,whatotherpolicytoolswillUkraineemploy
interms ofresource andcapital allocations?
Reply 4.
Ukraine willdepend, first, upon theprice competitiveness ofUkrainian manufacturers. Ukraine
willsupport theoperation ofenterprises abletocompete intheworld market. Ukraine willencourage
anyactivity ofanyenterprise bymaking useofeconomic methods thatconstitute andprotect market
economy fundamentals, e.g., economic freedom, private property andtheprinciple ofcompetition,
andprotection against misuse ofpower, monopolies andunfair competition. Priorities inindustrial
policy oftheState willbesubject tothestrategy ofstructurally allocated investments, yet,atdifferent
stages ofeconomic reform, thesolution oftactical problems may necessitate thesupport ofparticular
industrial sectors, branches orenterprises.
Inimplementing thetasks oftheindustrial development ofUkraine, thedistribution ofmaterial
andfinancial resources willberelated, first andforemost, toprovide forthenational independence
ofUkraine. Here, because oftheinternationalization anddecentralization ofanumber ofbranches
ofeconomic activity andthereduction inthefraction ofState demand onthegross domestic product,
theemphasis willbeplaced onenterprises thathave theopportunity toparticipate andbecompetitive
intheworld market.
Thedevelopment andinternational competitiveness ofUkrainian industries willbepromoted
bycreation ofanexport financial andinsurance system. Theabsence oflow-rate, easily-available
credit creates amajor problem forsupporting exports. Measures aimed atestablishing animproved
system ofState-granted export andinvestment guarantees willbeworked outbytheGovernment.
Itisnecessary tocreate theconditions toovercome thebarriers inforeign countries byincreasing the
quality ofUkrainian goods. Tothisend, asystem ofquality certification andcontrol willbeformed
andcertificates issued forUkrainian products thatmeet world standards.
TheGovernment plans tocreate anefficient andeasily accessible foreign trade datasystem.
TheGovernment willsupport thedevelopment ofhigh- technology branches ofthemachine
building industry (electronic andelectrotechnical industries, control instrument industry, aircraft and
spacecraft industries, automobile industry, bearing industry, machine toolindustry, electric welding
hardware industry), which isspecified inReply 1.When Ukrainian production inthemachine tool,
electrotechnical andother branches ofindustry reach world standards ofquality, itwillbeeasier forWT/ACC/UKR/7
Page 6
Ukraine toestablish itsposition intheworld market. Theforeign trade policy willbeaimed atincreasing
thepercentageofmachinebuildingproductionwhichgoesintoexport;20percentatpresent,50percent
asagoal.
Established industries inthenational economy, asopposed tonew industries, should stand
themarket test. There willbeonly minor State interference, ifany, intheoperation ofthemarkets
forboth traditional andnascent industries.
Industrial enterprises cannot count onState subsidies inthedevelopment ofmodern technologies
andmodernization ofproduction. TheGovernment aims toensure thecompetitiveness ofprices for
theproducts ofthemetallurgical, chemical andwood processing industries andplans toattract foreign
investments andtechnologies inthose industrial branches thatarenotable tocompete intheworld
market.
TheGovernment makes every effort torender every industrial branch acompetitive oneby
implementing integrated R&D conversion programmes comprising 22directions approved bythe
Resolution No.229 of25March 1994, "OntheUseoftheR&D andProduction Potential ofMilitary-
Industrial Complex forDevelopment oftheNational Economy". TheR&D work issupported atthe
expense oftheState budget andthatoftheenterprises oftheMilitary-Industrial Complex. Commercial
bank credits areused tosupport thereorientation oftheproduction oftheex-defense enterprises. Further
on,fundamental research willbesupported byusing therevenues ofenterprises toform aspecial R&D
support fund.
Question 1n.
--Ukraine stated inL/7499 thatState supports areprovided tostrategic areas oftheeconomy, i.e.,
power engineering, metallurgy, coal, andchemicals.
--Theresponse toquestion 1noted subsidies granted toenterprises in1994 andthedetermination of
theGovernment tocutthem. Italso referred to"setting lower income taxes fortheexport of
high-technology andhigh-quality finished products" than onother exports.
--Intheresponse toquestion No.4,Ukraine identifies high-technology branches ofthemachine building
industry (i.e., electronic andelectrotechnical industries, control instrument industry, aircraft and
spacecraft industries, automobile industry, bearing industry, machine toolindustry, andelectric welding
hardware industry) andother sectors forsupport.
--Thegoal ofthepolicy isstated asincreasing thepercentage ofmachine building production that
goes intoexport by150percent.
How does Ukraine intend tomeet these goals?
Reply 1n.
Under theUkrainian Law "On the1995 State Budget ofUkraine" thecoalandgasindustry
shall receive direct subsidies only, direct at:
-capital investments;
-restructuring ofthecoal andgasindustry;
-maintenance ofmine rescue services;
-geological survey work.WT/ACC/UKR/7
Page 7
Theissue ofestablishing acoal industry stabilization fund isunder consideration aswell as
theproblem ofsources offinancing forthisfund.
Memorandum onEconomic Reforms in1995 approved bytheSupreme Rada ofUkraine and
supported bytheInternational Monetary Fund andtheWorld Bank andalsoLaw "OntheState Budget
ofUkraine for1995" donotprovide other stimulation measures ofeconomy development through direct
subsidies andpreferential taxation.
Within theframework oftheEconomic Reform Programme there wasachieved asubstantial
liberalization ofexport through cancellation ofquotas andlicences. Non-tariff restrictions arestill
valid onlyforgrain andwastes ofprecious metals (until 1July 1995). Aliberalized regime ofequipment
imports where domestic production does notsatisfy Ukraine 'sdemand issupported. Theinitiation
ofother keymechanisms fortheincrease ofexports ofmachine-building products andsome other sectors
ofhigh technology inmachine-building isnotprovided for.
Question 2n.
Please specify anydirect orindirect transfer ofState budgetary funds toenterprises atthecurrent
time. Please specify anyprogramme ofloans toState enterprises below themarket costoffunds or
onterms more lenient thannormal commercial practice. Please specify anyState funds made available
toindustries, through grant orloan, asinvestment orworking capital, within thelastyear.
Reply 2n.
Inthespringof1994UkrainestartedtheEconomicReformProgramme,whichprovidedsolutions
tothemost important strategic problems; through sharp restrictions toreduce theinflation level, to
reach macroeconomic stabilization, toincrease export volume, tolayabase forimplementation of
structural changes andcreate conditions forpermanent economic growth.
These strategic tasks shall beimplemented bythedecrease ofthebudget deficit andinflation
level, providing enterprises credit inextremely strict volumes andholding salary increases tospecific
levels.
Introduction ofagrarian reform, acceleration ofprivatization, encouragement ofprivate sector
development anddecrease ofenterprise subsidization levels areincluded intheReform Programme.
Anintegral partoftheProgramme isencouragement offoreign trade anditssupport through thenew
Interbank Currency Exchange (ICE), amarket method ofexchange ratedetermination. According
totheEconomic Reform Programme applied anumber ofmeasures inbudget andfinancial andin
monetary andcredit sphere; made substantial steps indirection ofeconomy liberalization, including
insphere ofprice formation, domestic andforeign economic activity, changes intaxpolicy, structural
rebuilding, agrarian reform, system ofsocial protection, etc. Export/import areunder substantial
liberalization, purchases ofagricultural products areconducted through auctions (State contract is
remained only forown needs oftheGovernment within funds determined bytheappropriate budget
article for1995); State budget deficit for1995 approved bytheSupreme Rada ofUkraine atthelevel
7.3percent ofGDP (State budget deficit in1994 was30percent ofGDP).
Themain principles ofUkrainian budget policy for1995 are:
- decline ofState budget deficit, control over observance ofbudget norms andfinancial
discipline ofeconomic agents.WT/ACC/UKR/7
Page 8
Atthesametimesomeassignmentsofbudget,suchaspaymentofagriculturalproductspurchases
subsidies toindustrial enterprises, loans andsector programmes, State investments, assignments for
social sector andState management could becutdown to7percentofGDP (while planned 12percent
ofGDP).
Question 3n.
Please explain totheWorking Party theprogress oftheProgramme ofthePresident toreduce
subsidies toenterprises. What arethespecific goals oftheProgramme? What subsidies toenterprises
willbecutunder theProgramme ofthePresident, andwhat isthetimetable forthese cuts?
Reply 3n.
Anintegral part ofeconomy reforming iscancellation ofsystem ofState orders andState
contracts (including those concluded forforeign andtrade ends). Exclusion isstrictly outlining own
needs oftheGovernment which shall besatisfied through tenders. TheResolution oftheCabinet of
Ministers ofUkraine No312of28April 1995, "On Procedure ofProducts Purchases Organization
forState Needs" established thatnotlessthan50percentofproducts purchases (fulfilment ofworks,
services) including agricultural products purchase thatisconcluded byState customers through budget
funds arecarried outoncompetitive base.
Itisproposed forReform Programme fulfilment tokeep funds transfers toenterprises of
agricultural products processing, within theframework ofbudget assignments; torevise issue oncredit
emission provided bythePresidential Decree of22May 1995, related todebt between enterprises;
tokeep from granting funds fordebtinteroffset between enterprises andtopermit enterprises directly
toconsider thisissue including theclose ofthose, which arebankrupt.
Question 4n.
Areincome taxrates setlower inanysector forexports thanforgoods solddomestically? Are
anycredits onincome orother direct taxes available based onlevel ornature ofexports?
Reply 4n.
Thetaxpolicies oftheGovernment for1995 isdetermined bytransition from taxation with
"punishing rates" toamore liberalized system andalsoadecrease oftaxprivileges andexemption
from taxpayments oflegal entities. Liberalization ofthetaxsystem isdirected atadecrease ofthe
taxpressure oneconomic agents with anexpected anincrease ofrevenues intothebudget owing to
that. Atthesame time itshould benoted unconditional fulfilment ofmain proposals inchanges for
thetaxsystem, while proposals related tostabilizing taxongross goods turnover were developed, the
draft lawwasrejected bytheSupreme Rada ofUkraine intheprocess ofState budget approval.
Furthermore, toincrease revenues anumber ofplanned measures ofindirect taxation were initiated.
There wasintroduced US$41,7 taxperthousand m3ofgas,thatresulted inaprice increase forindustrial
consumers ofUS$8-10 perthousand m3,introduced bonus ongasimported from Russia thatincreased
domestic price toUS$80 from US$55 perthousand m3. According totheLaw "OntheState Budget
ofUkraine for1995" andincompliance with theEconomic Reform Programme thelevel oftaxis
thesame independently oftowhether theproduction isfordomestic consumption orforexport, i.e.,
anyprivileges, related totaxation andcrediting forexport inUkraine donotexist.WT/ACC/UKR/7
Page 9
IV. OTHER POLICIES RELATED TOFOREIGN TRADE
Agricultural Policies
Question 5n.
Concerning agricultural interest ratesubsidies:
What other domestic supports foragricultural production areprovided bythegovernment of
Ukraine?
Reply 5n.
In1995 direct domestic supports ofagricultural production through State funds according to
theLaw"OntheState Budget ofUkraine for1995" isconducted inthefollowing direction andvolumes:
-budget loans: (seeAnnex tothisReply)
Furthermore itisnoted bytheLaw thatbudget funds granted totheMinistry ofAgriculture
andFood ofUkraine, theState Committee ofUkraine onFood Industry onState contracts for1994
willbereturned in1995 andentered onaseparate budget account andused forfinancing ofState
Contracts foragricultural products in1995.
Question 6n.
WhatareUkraine'splanstobringthesemeasuresintoconformitywithGATT/WTOobligations?
Reply 6n.
Theprocess ofUkraine 'saccession totheGeneral Agreement onTariffs andTrade andentry
intotheWorld Trade Organization istobecome animportant factor intheprocess ofagricultural reform.
Itisthisprocess ofUkraine 'saccession toGATT/WTO together with financial assistance from major
international financing organizations, which should become thedecisive factor andthemethodological
basis fortherestructuring oftheagricultural sector. Bythistheeconomic policy oftheGovernment
ofUkraine willreceive auniversally recognized andproven guide todevelop itsagriculture.
Themethods ofdeveloping andimproving theforeign trade aspects ofagricultural policy
according totheprinciples oftheGATT/WTO system arereflected intheGATT Agreement on
Agriculture. Infact, thisAgreement isoneofthefundamental agreements (125 Member countries
areparty tothisAgreement) isessentially ofaneconomic nature. Itrepresents theinterest ofallnet
exporters ofagricultural products andtakes intoconsideration many years ofexperience thedevelopment
oftheagricultural sector of125countries, providing forthedomestic production ofagricultural products
andsupport andprotection forproducers, aswellasagricultural production forexport, ensuring their
access tointernational markets.
Proceeding from theexperience oftheagricultural sectors ofleading Members oftheWTO
andthegenerally accepted principles anddisciplines ofthisorganization, themain conditions for
providing thedevelopment oftheagricultural sector ofUkraine andoccupying anappropriate position
inmarkets are:
- agovernment system ofsupport foragricultural production;WT/ACC/UKR/7
Page 10
- implementing aneconomically-justified system ofdomestic market protection together
with providing aminimum level ofguaranteed access tothedomestic market for
products originating inother countries;
- afunctioning system ofgovernment support andthedevelopment ofagricultural exports
according totheprinciples anddisciplines oftheGATT/WTO system;
- applying aharmonized system ofsanitary andphytosanitary norms.
These aremajor elements oftheGATT/WTO system requirements, without which itcannot
beexpected thatUkraine will obtain theguarantee ofaright toanappropriate market share and
predictable sales ofagricultural products intheworld market.
Itisaccepted thatthese conditions arenecessary andobligatory forthefunctioning oftheWTO,
andnaturally, foraccession toGATT andtheAgreement onAgriculture. Yettaking intoaccount the
factthatUkraine hasbarely begun theprocess offundamental economic reform intheagricultural
sector andthatthere isanongoing process ofmarket reforms intheeconomy asawhole, theGovernment
ofUkraine should provide forcertain allowances during theprocess ofaccession andreach the
appropriate understanding withpotential trading partners within theGATT/WTO. Tobemore specific -
themajority ofmethodologies used intheUruguay Round andtheir economic criteria areinconsistent
with those used inUkraine andtherefore Ukrainian indicators arenotsuitable forcomparative purposes
todetermine agricultural economic potential. During theyears, known asthebase period interms
oftheUruguay Round, Ukraine wasnotanindependent exporter orimporter andforeign policy was
based onprinciples different tothose used today.
Taking thisintoaccount, Ukraine 'saccession toGATT/WTO anditsparticipation intheWTO
canbepossible only with thedevelopment ofaspecial accession programme. This isnotarequest
forspecial exceptions (although these arealso needed) butanindication oftheneed toconsider
realistically thespecific nature ofUkrainian economic development.
Inthecurrent situation, information onmuch oftheeconomic data, which isused todescribe
theagricultural sector invarious countries andtheir export potential, andisused toregulate themarket,
canonly beobtained inUkraine from conducting further economic analysis. Appropriate data can
only beobtained from comparing economic forecasts andtheresults ofthereform process, andusing
adatafor1997-98 asaminimum time frame foreconomic forecasts. Thus, intensive economic analysis
ofagriculture andrelated government programmes, which takes theabove intoaccount andwhich is
based ontherules andprovisions oftheAgreement, ismost important forUkraine. This willallow
theestablishment oftheappropriate framework (legislative andeconomic) needed todevelop astrategy
fornegotiations onUkraine 'saccession totheAgreement onAgriculture oftheUruguay Round of
GATT andtodevelop strategies toobtain economically-justified concessions andspecial exceptions
fortheperiod ofaccession, fortheperiod required foreconomic stabilization and successful
implementation ofagricultural reform. Also, Ukraine isready toparticipate innegotiations onthe
following aspects oftheAgreement attheinitial stage ofnegotiations andhasnoreservations about
doing so,itisalso important thatthere beallocated acertain time period forthedevelopment of
regulatory documentation, which areharmonized with international standards, certifying agricultural
products, andensuring adherence tosanitary andphytosanitary rules andregulations.
TheGovernment hasgreat interest inpreparation andimplementation ofgovernment domestic
supportprogrammestoagriculturalproducersaccordingtotheprinciplesandprovisionsoftheAgreement
onAgriculture, inparticular:
- developing, inthefuture, aprogramme ofsupport foragricultural producers;WT/ACC/UKR/7
Page 11
- defining thereallevel ofgovernment subsidies toagriculture, andanalysing economic
data onagricultural support for1992-1994, defining thelevel ofdomestic support,
which istoberegarded asthebasic level bytheWTO forpurpose ofaccession and
asabase level forfurther reductions;
- thepreparation ofproposal forthedevelopment ofexport subsidy programmes,
conducting ananalysis ofthecurrent system ofexport support anditscompatibility
with therequirements oftheAgreement;
- developing parameters forsupport andexport subsidy inorder tobegin negotiations
forthetransitional period before reductions areimplemented.
Subsidies/Export Stimulation Measures
Question 7n.
There istheexpectation thatUkraine willcommit initsprotocol ofaccession tocarry outthe
policies ofitsindustrial andagricultural development objectives inconformity with theWTO.
--More information isrequired toassure thatplanned R&D expenditures outoftheState budget to
support theState industrial development policies referred tointheresponse toquestion No.4,are
consistent with theAgreement onSubsidies andCountervailing Measures.
Reply 7n.
Ukraine confirms thatinitsProtocol onAccession Ukraine hasanintention totakeobligations
toconduct such policy ofindustrial andagricultural development which meets GATT/WTO principles
anddisciplines. Atthesame timewestress thataccording toEconomic Reform Programme ofPresident
Kuchma themain principles oftheGovernmental budget policy for1995 arethefollowing:
-reduction oftheState budget deficit;
-control over observance ofbudget norms andfinancial discipline ofeconomic agents.
Presently theGovernmental Commission onUkraine 'saccession toGATT hasstarted working
onaDraft Law onSubsidies. Thepurpose ofthisLaw istospecify subsidization procedures and
domestic support forindustry, agriculture andscience inaccordance with theAgreement onSubsidies
andCountervailing Measures GATT 1994. Itisprovided thatthisLaw willspecify theterm subsidy
anddeterminelawfulnessandunlawfulnessofsubsidies,formsandmethodsoftheintroductionofsupport
programmes andalsoprocedures andtheir mechanisms andprevention ofunlawful subsidization in
accordance with theAgreement onSubsidies andCountervailing Measures.
1. Imports Regulation
Reduction ofNon-essential Imports andtheGovernmental Commission
Question 8n.
--Inthereply toquestion 2,itisstated thataGovernmental Commission wascreated inSeptember 1994
toaddress import regulation, andspecifically toproduce a"considerable reduction innon-essential
imports."WT/ACC/UKR/7
Page 12
--TheGovernmental Commission appears tobecharged with developing proposals onabroad range
oftrade policy issues, with thepotential toshape Ukraine 'soverall import regime. Wewould be
interested inlearning how thework oftheCommission isprogressing, including atimetable for
completion ofproposals toaddress thelisted objectives.
IstheCommission reviewing allcurrent import laws andregulations? Isthere atimetable for
itsdeliberations, i.e.,when might recommendations forpolicies toreduce imports beready, andwill
they besubject toprior comment before implementation?
Reply 8n.
According totheRegulations onInterdepartmental Commission onIssues ofImport Regulation
approvedbythePresidentialDecreeNo.656/94of2November1994,theInterdepartmentalCommission
onIssues ofImport Regulation isajoint, permanently working State body, established forcoordination
ofUkrainian ministries, departments andorganizations whose activities arerelated toprotection of
consumers 'rights andalso protection oftheinterests ofUkrainian economic agents from unfair
competition, aswell asitsprevention during theimport ofgoods andservices. Itwillalsodealwith
creation ofconditions forthelevelling ofUkraine 'sbalance ofpayments. The main tasks ofthe
Commission arethepreparation ofproposals related to:
- reducing ofUkrainian trade andbalance ofpayments deficits;
- reducing ofnon-essential import volumes;
- determination ofalistofessential imports andcreation ofpreferential terms fortheir
importation;
- rational useofhard currency funds, prevention oftheimport ofnon-quality goods,
prevention ofeconomically ungrounded price increases ongoods thatareimported.
Atthesame time, theCommission isdirected todevelop andensure introduction ofapplication
mechanisms ofprotective import restrictions according tonorms andprinciples ofGATT/WTO.
TheHead oftheCommission istheFirst Vice-Prime Minister ofUkraine onissues ofEconomic
Reform.TheFirstDeputyandtheDeputyHeadoftheCommissionaretheMinisterofForeignEconomic
Relations ofUkraine andtheHead ofState Customs Committee ofUkraine respectively. Theform
oftheCommission 'swork aremeetings which areheld ascalled bytheHead ofCommission butnot
lessthan once amonth.
TheCommission constantly studies thestate oftrade balance andthebalance ofpayments of
Ukraine, thestate ofseparate sectors oftheeconomy, theimpact ofimports onrestructuring inthese
sectors incompliance with market economy requirements. Italsoprepares ananalysis ofproposals
fortheGovernment related tointroduction ofchanges intotrade regime. During thisprocess, the
Commission follows norms andprinciples ofGATT/WTO. Itmeans, infact, thattheCommission
develops proposals related tochanges ineconomic legislation ofUkraine with theaim ofits
harmonization, according tothese principles. Inparticular, forprevention ofunfounded pressure on
theGovernment ofUkraine related tointroduction ofheightened import tariffs onsome kindofimported
goods. TheCommission prepared draft ofthePresidential Decree "On Application ofProtective
Restrictions ofImport According toNorms andPrinciples ofGATT/WTO". Introduction ofthisDecree
shall eliminate thepractice ofunilateral increases ofimport tariffs onthebasis ofproposals ofasector 's
ministries anddepartments, i.e.,theprocedure forchanges totheimport tariff shall bedone according
tosuch principles astransparency, economic validity, compensation andachievement ofappropriateWT/ACC/UKR/7
Page 13
agreements related tocompensation with Contracting Parties ofGATT/WTO. Inaddition, the
Commission hasconducted work related tonorms andprinciples fortheapplication ofprotection for
agricultural goods andalsoaprocedure forapplying restrictions todecrease thebalance ofpayments
deficit. TheSecretariat ofInterdepartmental Commission onIssues ofImport Regulating fruitfully
cooperates withtheSecretariat ofInterdepartmental Committee onUkraine 'sAccession toGATT/WTO.
Measures withregard toreducing imports proposed byministries anddepartments which would
increase onthose goods, arestudied bytheCommission toensure thatthey areproduced inUkraine
andthatensuring their competitiveness requires additional protection. After adoption ofthePresidential
Decree "OnApplication ofProtective Restrictions According toNorms andPrinciples ofGATT/WTO"
theprocedure formaking such decisions shall meet completely thenorms established intheUruguay
Round ofmultilateral negotiations.
Question 9n.
--Theobjectives oftheCommission listed inthereply toquestion No.2involve anumber ofproposals
thatdonotappear consistent with WTO provisions, inter alia:
- creation oflistsof"non-essential" and"essential" imports with thegoal ofreducing
theformer andcreating "favourable policies" forthelatter;
- useof"preferential taxandcredit terms fordomestic producers" ofimport-substituting
goods;
- determination ofcorrespondence ofimports toadomestic "fair market value;" and
- useof"tariff regulation inthecase ofunfair, overvalued prices".
--More precise information isrequired toassure thatactions derived from such goals bytheCommission
aimedatthe"reductionofthevolumeofnon-essentialimports"couldtaketheformofimportsubstituting
policies ornon-tariff barriers notconsistent with WTO provisions.
Reply 9n.
Itshould benoted thatfrom thebeginning ofindependent foreign policy implementation in
UkrainewasnotunitedStatebody,whichcouldconductproperlyanalysisofeconomyStateandinfluence
onitforeign trade development. One oftheaims increation ofInterdepartmental Commission on
Issues ofImport Regulation exactly was conducting ofwork related toanalysis offoreign trade,
perspectives ofitsdevelopment, foreign trade influence ondomestic production andpreparation of
proposals related toprevention ofnegative tendencies development, inparticular invery difficult period
connected with complex economic reform, conducting. Therefore, composition ofgoods listsofnon-
critical andcritical import isnotendinitself ofthisCommission 'swork butexactly isapartofeconomic
grounds ofintroduction those orother changes toimport tariff. Ofcourse, atthesame time such
common principles asheightened tariff rates onthose goods, which areproduced inUkraine, lowtariff
ratesongoods,whichareabsentonthemarketandwhicharenecessaryforthedevelopmentofUkrainian
industry, differential approach totariff rates depends ongoods processing extent, i.e., minimum rate
onrawmaterials, heightened rates onhalf-finished products andminimum rates onhigh-technology
endproducts aretaking intoaccount.
Actually, inaccordance withtheDecree onImport Regulation thelisted questions were referred
totheauthority oftheCommission. Ontheother hand, when theGovernmental Commission on
Ukraine 'saccession toGATT made theanalysis oftheAgreement onSubsidies andCountervailingWT/ACC/UKR/7
Page 14
Measures itcame totheconclusion thatanumber ofproblems solved bytheGovernmental Commission
onImport Regulation needed further deep anddetailed work inaccordance with therules andprinciples
oftheAgreement onSubsidies andCountervailing Measures. Such analysis willbetaken intoaccount
inelaborating ofUkraine 'sLaw onSubsidies andDomestic Support. Theappropriate changes will
bealsomade inthelegislative actswithaview tobring theGovernmental Commission 'swork onimport
regulation inrespect oftheabove-mentioned questions toconformity with therules andprinciples of
theAgreement onSubsidies andCountervailing Measures.
Question 10n.
Regardingtheobjectivetoreducenonessentialimports,whataresomeexamplesof"non-critical"
or"non-essential" imports forwhich theCommission might recommend limitations? What criteria will
theCommission usetodetermine what products should beonthelist?Willsimilar restrictions beplaced
onproducts thatUkraine determines thatitcanproduce itself, oristhegoalsimply import substitution?
How willrestrictions beenforced and/or modified?
Reply 10n.
Examples ofnon-essential import where theCommission could recommend restrictions:
-tobacco goods;
-alcohol products;
-coal;
-cars;
-luxury goods;
-agricultural products.
Themain criterion fordetermining which goods aretobeincluded onthelistshall beinjury
caused todomestic producers during these lastyears ofthemarket opening process andimplementation
oftrade freedom.
Similar restrictions shall notbeapplied togoods which Ukraine canproduce itself ifimport
ofthese goods does notcause asubstantial injury tonational producers ofanalogous goods.
Allthese restrictions shall beintroduced orchanged onthebasis oftheAgreement onSafeguards
oftheUruguay Round ofmultilateral negotiations, onthebasis iftheAgreement onSubsidies and
Countervailing Measures ofUruguay Round andalsoonthebasis oftheAgreement onInterpretation
ofArticle VIGATT 1994.
Question 11n.
--OnFebruary 20aPresidential edict entered into effect thatrequired traders involved inbarter
operations toopen apreliminary import deposit account. The amount ofthedeposit required for
non-essential imports is50percentofthevalue oftheimport contract, while "essential" imports need
only a10percent deposit.
What isthepurpose oftheimport deposit programme? Why hasadifferential inthevalue of
thedeposit been established for"essential" andnon-essential imports? Have listsofgoods categorized
inthisfashion been established? Ifnot,howisthedecision taken toestablish theproper import deposit
level?WT/ACC/UKR/7
Page 15
Reply 11n.
Theimport deposit programme isamechanism ofensuring timely return oftheimport part
ofbarter contracts toUkraine byeconomic incentive. ThePresidential Decree "On theRegulation
ofBarter (Goods Exchange) Operation" isnotstillinforce, thelistsofessential andnon-essential import
arenotdetermined andimport deposits arenotapplied. Acause forapplying themechanism ofan
import deposit wasthefactthatduring 1993-1995 Ukraine didnotreceived import portion ofbarter
arrangements involume ofUS$1.8 bln.
Application ofdifferential rateofimport deposit wasprovided toencourage import goods that
belonged tocritical import category.
Question 12n.
What portion ofUkraine 'simports arelikely tobeaffected bythisregulation?
Reply 12n.
Iftheprocedure ofimport deposit application isactivated, itwould impact imports through
barter contracts. Import through barter contracts according todifferent points ofview is40percent
oftotal Ukrainian imports.
Pricing Policy
Question 13n.
Inthereply toquestion No.2,Ukraine stated thatitwould "develop amethod todefine whether
there isconformity ofprices forimported goods andservices with thefairmarket price established
inthedomestic market."
More information isrequired toassure conformity ofsuch amethod with WTO obligations.
Does thestatement inreply No.2refer tothedevelopment ofanti-dumping laws ortoprice fixing?
Reply 13n.
Thestatement inanswer toquestion No.2 isrelated totheprocess ofthedevelopment ofanti-
dumping legislation, safeguard restrictions, countervailing duty andcustoms valuation according to
norms andprinciples ofGATT/WTO.
Question 14n.
Weunderstand thatinNovember Ukraine issued aPresidential decree establishing aprocedure
fordevelopment ofindicative prices forgoods traded byUkraine. Thepurpose istoincrease currency
earnings from exports, lower expenses onimports, andtoprevent dumping.
Isthisthe"method" for"fair market price" referred toinreply No.2?This decree should
bemade available totheWorking Party forexamination.
Reply 14n.
No,itisnotamethod of"fair market price" referred toreply No2.Translation ofDecree
intoEnglish isenclosed.WT/ACC/UKR/7
Page 16
Since thebeginning of1994, theformation ofindicative prices hasbeen performed bythe
Ministry ofForeign Economic Relations. Indicative prices aredeveloped foramajor group ofgoods
from thelistofgoods subject tolicensing with thepurpose ofmonthly revision andpublication.
Anindicative price istheprice atwhich ourdomestic goods aresold intheforeign market.
This istheprice forgoods thatbytheir quality meet Ukrainian standards, aresupplied intheconditions
ofFOB orDAF (Deliver atFrontier) according totheINCOTERMS-94 Rules, andarepaid forby
a45dayletter ofcredit, delivery ofwhich isrealized within thesame months.
Theindicative price, inreality, istheresult ofanalysis oftheworld-market conjuncture and
prices ofthese goods, thevolume ofsales ofUkrainian goods inthese markets, international traders '
prices forservices, comparative characteristics ofUkrainian goods, theconditions ofpayments for
thegoods sold, andthetrends ofappropriate market dynamics.
Forexample, theindicative price forsteel reinforcements isformed onthebasis ofinformation
concerning current saleprices ofthisproduct intraditional markets (China, Turkey, Europe andothers)
with thededuction from these prices ofthecosts ofshipping from Ukrainian Black Seaports andof
thetraditional international traders 'profit; with thecertification ofquality ofUkrainian manufacturing
reinforcements (intheabsence ofinternational certifications); andwith thecondition ofletter ofcredit
payment.
Results ofsuch calculations onseparate markets areanalyzed jointly byofficers oftheMinistry
ofForeign Economic Relations ofUkraine, representatives ofmanufacturing enterprises andforeign
organizations, andemployees ofspecialized expert organizations at"conjuncture meetings" after which
specific indicative prices areset.
Thepublished range ofprices takes intoconsideration their actual dispersal during deliveries
ofgoods intodifferent markets. Avery representative price inthiscase istheindicative price for
hotforged steel sheet ($225-280 pertoninNovember) thelowest limit ofwhich isoptimal insales
inthemarkets ofAsia andAfrica andthehighest limit reflects thelevel ofprices forUkrainian sheet
inNorth America.
There are,ofcourse, exceptions occurring when goods aretobesoldatprices lower than the
indicative price. Ithappens during theexport ofnot-standard orlowquality products, forexample,
during thesaleofcorroded, non-uniform length, andnotpacked according tostandards reinforcements.
Inthiscase theexporter collects alldemands forprocurement, makes upaninformation table outof
them andontheregistration card theprice iswritten atwhich itispossible tosellthereinforcement,
even ifitislower than theindicative price.
There hasnotbeen acase sofarinwhich someone hasbeen refused alicence orregistration
ofacontract with valid arguments present. Itisclear thatthepossibility tosellatalower price does
notapply totheattempts tosellquality goods ataprice twice ascheep asitsactual price.
Inconclusion, itisnecessary tonotice thatfrom thevery beginning oftheworking outof
indicativepricesattentionwasfocusedontheirfunctionasbeinginformative,theirstatusasrecommended
forcontracting price levels, andtheir implementation mechanism tobeflexible andbased ondialogue,
thatis,alltheproblems which may arise, aresolved inadesignated place, bydesignated people and
with thedirect participation oftheexporter.WT/ACC/UKR/7
Page 17
Question 15n.
Please explain how these indicative prices willbedeveloped andhow they willbeapplied in
conformity with Ukraine 'sWTO obligations concerning customs valuation andapplication ofanti-
dumping duties?
Reply 15n.
Indicativeprices,theprocedureforwhichisestablishedbyanappropriateDecreeofthePresident
havenorelationtoUkrainiancommitmentsbeforeWTOwithregardtocustomsvaluationandapplication
ofanti-dumping duties thatshall beintroduced byUkrainian legislation inaccordance with appropriate
Agreements oftheUruguay Round.
Anti-Dumping andCountervailing Measures
Safeguard Measures
Question 16n.
Ukraine should beprepared toundertake aspecific commitment initsprotocol ofaccession
thatsuchmeasuresadoptedandappliedbytheGovernmentalCommissionwillrespectWTOobligations,
including notification andaprior comment period fortraders before such measures areenforced.
--Inlight oftheobjectives asstated inthisresponse, wewould appreciate anopportunity toreview
thedraft legislation andregulations thatUkraine intends todevelop regarding safeguards, anti-dumping
actions andother "unilateral constraints" onimports toensure itsWTO compatibility.
Reply 16n.
InitsProtocol onAccession Ukraine isready toundertake specific commitments thatmeasures
adopted andimplemented bytheGovernmental Committee onUkraine 'sAccession toGATT/WTO
willtakeintoaccount WTO commitments, including notifications andpreliminary consultations with
trade partners before these measures willbeimplemented.
Draft Presidential Decree "On Import Safeguards" isenclosed.
Privatization
Lease Relations with State Enterprises
Question 17n.
Arethelease regulations listed inthereply toquestion No.3considered tobeaform of
privatization policy, inthatthey provide thatprivate persons, firms, orgroups ofpersons may lease
State property from thespecified agencies, inaccordance with theregulations?
Reply 17n.
By1January 1995, 11,502 enterprises inUkraine hadbeen privatized, ofthose 7,967 had
been privatized in1994. That is,2.2times more enterprises privatized in1994 than in1993.
During 1993-1994 theprivatization wasincreased inindustry, construction, retailing andfood
services, consumer services, where in1994, 2,156 enterprises were privatized inindustry, 1,084 in
construction, 4,422 inretailing andfood services, 2,880 enterprises inconsumer services. ThesharesWT/ACC/UKR/7
Page 18
oflight industry, construction andtransport enterprises arebeing sold quite rapidly. TheMinistries
ofAgriculture andFood, Machine-building, theMilitary Industrial Complex andConversion, Industry,
andUkrbud State Corporation have privatized most enterprises.
Inaccordance withtheDecree ofthePresident ofUkraine of19February 1994, "OntheUnified
SystemofPrivatizationAgenciesinUkraine",theprocessofestablishingaunifiedsystemofprivatization
agenciesisnearcompletion,whichshallprovidetheopportunityforanintegratedlegislative,information
andstatistical system. Ofthe546branches offices oftheState Property Fund which have been planned,
517have been established indistrict centres andcities. Theother branch offices areintheprocess
ofbeing established.
Theprivatization process hasbegun inallregions ofUkraine. However, ithasbeen most
successful inDonetsk, Lviv, Kharkiv, Kiev, Luhansk oblasts andinKiev, where, in1994, 935, 820,
457, 426, 411and685enterprises respectively, were privatized.
Themain methods through which enterprises were privatized in1994 were: thepurchase of
State property, which hadbeen leased with anoption topurchase (36,3 percent) andthepurchase
ofState property byagroup ofbuyers (39.7 percent).
Incompliance with theDecree ofthePresident ofUkraine on26November 1994, No.699/94
"OnMeasures toProtect theRights ofCitizens toUtilize Privatization Certificates" theState Property
Fund hascompiled alistof5535 enterprises, subjects tocompulsory privatization inthefirsthalfof
1995 andsubmitted ittotheCabinet ofMinisters ofUkraine.
Theregional departments ofLviv, Vinnitsa andKirovohrad oblasts andinother oblasts have
achieved aconsiderable amount inthisarea.
TheDecree ofthePresident ofUkraine of30December 1994, No.827/94 "OnMeasures to
Accelerate Small-scale Privatization inUkraine" provides fortheconclusion ofsmall-scale privatization
inUkraine during thecurrent year.
In1994, privatization certificates were issued inUkraine intheform ofprivatization deposit
accounts. By1January 1995, 8,300,000 people hadopened privatization deposit accounts, which
is16percent ofthepopulation.
Inorder tostreamline privatization procedures inUkraine, privatization certificates with the
name oftheholder, have been issued. According todata provided bytheSaving Bank ofUkraine,
by1March 1995, thecertificates hadbeen obtained by1,430,500 Ukrainian citizens. Asystem of
regional privatization certificate centres, which would hold certificate auctions, isbeing established.
TheUkrainian Centre forCertificate Auctions and15regional centres forcertificate auctions
have already been opened.
During thefirst quarter ifthisyear, more than 300joint stock companies have putuptheir
shares atacertificate auction. TheInternational Monetary Fund, theWorld Bank forReconstruction
andDevelopment, European Community, United States Agency ofInternational Development, the
Treuhand Osteuropa Company ofBerlin andothers have been assisting with privatization inUkraine.
The donor organizations have provided material support forprivatization, andprovided technical
assistance.
In1994, inorder todevelop theinfrastructure forprivatization anddevelop thestock market,
theStatePropertyFundlicensedintermediaries.Itissued270licencestotrustcompaniesfortheiractivityWT/ACC/UKR/7
Page 19
with respect toprivatization securities. Seventy-seven licences were obtained byinvestment funds
andcompanies involved incommercial activity.
Twenty-three enterprises andorganizations have obtained licences towork asintermediaries
during theprivatization ofState enterprises.
Post-privatization support ofprivatized enterprises hasbeen taken intoaccount. TheUkrainian
Centre ofPost-Privatization Support forEnterprises hasbeen established. Themain aimoftheCentre
istoprovide consultations onreconstruction andproviding thenecessary investments toprivatized
enterprises andprivate enterprises inUkraine, tosupport regional investment projects.
Theresults ofarandom check oftheactivities ofprivatized enterprises indicate, thatinmost
cases, their activity ismore effective, socially andeconomically, thantheactivity ofState enterprises.
Following thesigning of8June Constitutional Accord, thePresident issued animportant
privatization decree affecting theinclusion offoreign investors intheprivatization process. Decree
No.468,"OnMeasures forConducting Privatization in1995", from 23June, outlined thegovernment 's
privatization plans for1995 andgave legal force totheCabinet ofMinisters approved 1995 State
Privatization Programme, which wassubmitted toParliament forapproval inDecember 1994, buthas
yettobeadopted. Thedecree calls fortheprivatization in1995 of22,450 small businesses, theauction
of8,000 large andmedium-sized enterprises, andthesaleof1,200 unfinished construction sites and
stipulates thattheforeign legal entities would enjoy thesame legal rights intheprivatization process
asthose held byUkrainian citizens. This measure isparticularly significant, inasmuch asforeign
legal entities previously hadtopaysignificantly higher rates forthepurchase orprivatizing entities,
duetoartificial manipulations oftheofficial exchange ratesetbygovernment policy.
Asecond decree issued on12July, affects theability ofenterprises tobuyandsellland.
Presidential Decree No.608, "OnthePrivatization andLeasing ofnon-Agricultural Land Plots Used
inEnterprise Activities", provides Ukrainian legal entities andenterprises theright tobuy, sell,lease,
grant, andbequeath theland onwhich they arelocated.
Workcontinuesontheprivatizationofentitiesbelongingtotheso-called"socio-culturalsphere".
InJuly, theCabinet ofMinisters reviewed aconcept paper ontheprivatization ofschools, hospitals,
nurseries, andrecreational facilities andisscheduled tosend anapproved concept paper totheSupreme
Rada forreview. Also under review, istheamendment ofregulations thatwould accelerate the
privatization ofsmall scale entities andunfinished construction sites.
Question 18n.
Please describe fortheWorking Party how such lease relations aresetupandexecuted, what
sorts ofenterprises andlessors have been involved, andhow many such arrangements have been
completed todate?
Reply 18n.
Lease relations areestablished bytheagreement onleasing between theowner oftheobject
being leased andlessor (natural orlegal person). Theobject ofleasing, responsibilities ofparties, terms
ofleasing (short-term orlong-term) should bementioned intheagreement. Allkinds ofenterprises
canconclude lease agreements with theright oflease relations term prolongation. According tothe
Presidential Decree "On Privatization andLeasing ofNon-agricultural Lands toConduct Business
Activity" No.608/95 of12June 1995 citizens ofUkraine andUkrainian legal persons have therightWT/ACC/UKR/7
Page 20
toprivatized non-agricultural lands toconduct business activity iftheyhave noanypartofState property
intheir statutory fund.
TheExecutive Committee sells non-agricultural lands toprivate owners. Price forthisland
isaccounted under themethod, stipulated bytheCabinet ofMinisters ofUkraine andapproved by
cityadministration taking intoaccount expert 'sevaluation oftheland. Theprivatizing enterprise can
beprivatized orleased with theland, onwhich theenterprise wasbuilt. Non-agricultural land canbe
leased, including long-term leasing (50years withthelessor 'sright toprolong theterm oftheagreement
forthenext 50years). Theright tolease canbeobtained through land auctions, competitions, etc.
Theregulations forleasing land through auctions arestipulated bytheappropriate Committees.
Pricing Policy
Question 5.
Please provide alistofthegoods thataresubject toindicative prices. How arethese prices
implemented?
Reply 5.
Indicative prices aresetforgoods ofstable export from Ukraine, thevolume ofwhich have
exchange earnings thatsignificantly affect theeconomic situation oftheState, asthewhole, andon
external payments balance inparticular. Indicative prices aresetinabsolute figures inUSD forgoods,
produced incompliance with current Ukrainian quality standards, fortheFOB orDAF (delivered at
frontier) delivery basis (according toINCOTERMS 90)andLC(letter ofcredit) payment terms.
Indicative prices aresetbased ontheresults ofanalysis ofdataofthelevel oftraditional prices
with adueallowance forweighted average freight from Ukrainian ports, thelevel ofprofits obtained
bytraditional international trading firms andwith allowance foraquality index ofdomestic goods
compared togoods ofother manufacturers present inthemarket.
Indicative prices recommended foruseinconcluding foreign trade deals
(bysummer 1995)
_________________________________________________________________________________
Export Prices
Products Price, $/t HSCode
Ferrous Metals
Cast iron 116-120 720100000
Ferrous metal wastes 112-120
Chemical Industry Products
Carbamide (inbulk) 136-140 310210000
Dehydrated ammonium 176-180 281410000WT/ACC/UKR/7
Page 21
Monoammonium phosphate (inbulk) 173-180 283521000
Ammonium sulphate 45-50 283329900
Methanol 350-380 290511000
Agricultural Products
Frozen meat with nobones 1900-2000 0201-0202
Dried fatless milk 950--1000 040210990
Salt(inbulk) 21-25 250100910
Pea(inbulk) 170-175 110319900
Margarine 610-670 151700000
Butter 1150-1200 040500100
Ethyl alcohol, 96% 600-630 220710000
Vegetable oil 610-620 151219910
Wheat 130-135 100190000
Casein 2500-2700
Corn 135-140 100590000
Sugar 325-350 170199100
Import Prices
Fuel andLubricants (CIS-production)
Gasoline A-93 175-180 27100000
Gasoline A-76 165-170 27100000
Diesel fuel(S-0.3) 155-160 27100000
Black oil(Sulphur content: 3.5%) 62-65 27100000
Question 6.
Which wholesale orretail food prices areregulated orsubject tosubsidies? Please provide
details ontheir scope andoperation.WT/ACC/UKR/7
Page 22
Reply 6.
Thewholesale andretail prices forfood products were regulated byapplication ofmarginal
mark-ups. Themarginal mark-ups were eliminated bytheendof1994.
Atthelevel oftheproducer, State regulation ofprices onlyremains forthose goods andservices,
wherethereisanaturalmonopoly(electricalenergy,gas,centralizedheating,watersupplyandsewerage,
public transport, rental ofpremises) andalsoforthesmall number ofartificial monopolies. Theretail
prices formost food products andother goods were liberalized on21October 1994 byaResolution
oftheCabinet ofMinisters. Thegovernment only setsprices forbread attheretail level, forutilities,
public transport fares, andfuelforconsumers.
Question 19n.
--Thereply toquestion No.5discusses theestablishment of"indicative" export prices forcertain goods.
Towhat extent aretheindicative prices recommended foruseinconcluding foreign trade deals
actually used? Towhat extent arefirms trading these products required tousethe"indicative" prices.
Aretheyfreetosettheir ownprices? Isthisapplicable toallenterprises, oronlytoState trading entities?
Reply 19n.
Firms thathave trade ingoods mentioned inlistsofMinistry ofForeign Economic Relations
ofUkraine, according toDecree "On Indicative Prices" were recommended touseindicative prices
onthose goods. Incase ofdeviation from these prices afirm shall provide reasons forthedeviation.
Theprocedure isapplied toallagents offoreign economic activity regardless ofproperty form though
themain reason fortheprocedures application isthepresence ofmany State enterprises inconditions
oftransition tomarket economy.
Also seeReplies 14n. and15n.
Question 20n.
Arethegoods with "indicative prices listed inthisreply, i.e.,castiron, ferrous metal wastes,
chemicalindustryproductsincludingmethanol,agriculturalproductsincludingsalt,vegetableoil,wheat,
corn, sugar, andcertain fuels andlubricants, thesame goods exported under State "orders" andState
"contracts" bydesignated firms? AretheState "indicative prices" ever used byprivate exporters?
Reply 20n.
Since 1January 1995 inUkraine, "State contracts" and"State orders" forexport have been
eliminated. Indicative prices areapplied toallexporters ifotherwise notprovided byinterState
agreement.
Question 21n.
What isUkraine 'sintention regarding theelimination ofthese fixed export prices andwhat
timetable isenvisioned?WT/ACC/UKR/7
Page 23
Reply 21n.
The indicative prices implementation forsome types ofexports willbeestablished forthe
period ofeconomic reform until amarket economy iscreated. Inother words, until privatization and
macroeconomy stabilization.
Question 22n.
--The reply toquestion No.6states thatmarginal mark-ups forwholesale andretail prices
forfood products were eliminated attheendof1994.
Were these controls intended asconsumer subsidies?
Reply 22n.
Limitations ofmark-ups onproducts ofhome production applied during thattime andforthose
products when prices forthem were regulated bytheState, i.e., carried outassubsidization of
consumers. From thebeginning of1995 theState hasstopped interfering intotheprocess ofprice
formation. Therefore, formation ofprice does notdepend onorigin ofgoods andisconducted on
amarket basis. Ofcourse, from thebeginning of1995 limitations ofmark-ups donotexist.
Ageneral aimofpricing policy isdrastically restricting government regulation inprices (both
bythecentral government andbylocal governments). This willnotonly facilitate amore efficient
distribution ofresources, particularly energy, which isinshort supply, andwhich isimported atthe
present time, butwillimprove thebudget deficit. Towards theendof1994, theGovernment eliminated
mostformsofgovernmentregulationofpricesetting,includingdirectcontrolofprices,priornotification
ofintent tochange prices, which alsoincludes prices fortheproduction ofmonopolies producing certain
goods andservices.
Question 23n.
Does elimination ofthemarginal mark-ups mean thatthere arenolonger anyprice controls
onfood products?
Reply 23n.
There arenoprice controls onfood inUkraine. Also seeReplies 6n,22n.
Question 24n.
What price controls, ifany, remain ondomestic andimported products?
Reply 24n.
There arenoprice controls onimported products.
Inaccordance withtheCabinet ofMinisters ofUkraine Resolution No.135of22February 1995
"On Provisions onState Regulation ofPrices/Tariffs Manufacturing Equipment, Consumer Goods,
Works andServices byMonopolies" thefollowing aresubject toState regulation:
- natural monopolies;WT/ACC/UKR/7
Page 24
- economic operators from among those included intheListofenterprises thathave a
monopoly position innational orregional markets;
- enterprises which violate therequirements ofUkraine 'santi-monopoly legislation by
setting monopolistic ordiscriminatory prices.
Atthepresent time theState regulates about 11percent ofprices inthenational economy.
Also seeReplies 6n,22n.
Question 25n.
How does Ukraine justify such controls withArticle IIIandtherequirement totakeintoaccount
theinterests ofexporting Members with aview toavoiding prejudicial effects?
Reply 25n.
Ukraine does notjustify such controls withArticle III,thusmarginal mark-ups were eliminated
from thebeginning of1995.
Question 26n.
Theexpectation isthatUkraine willcommit toeliminate itsremaining controls assoon as
possible.
Reply 26n.
Asitwasmentioned above Ukraine haseliminated controls over marginal mark-ups andis
continuing toreduce State interference intotheprocess ofregulating prices inproduction andretail
sale. Also seeReplies 6n,22n.
Privatization
Question 7.
Please explain howParliament 'sJuly1994 resolution suspending privatization willimpact the
government 'sprivatization programme. What plans does theGovernment ofUkraine have toassist
theprivatization effort?
Reply 7.
TheResolution oftheSupreme Rada of29July 1994, "On Perfection oftheMechanism of
Privatization inUkraine andStrengthening oftheControl Over ItsImplementation" suspended the
concluding ofcontracts forsaleorlease with redemption toownership oftheobjects ofprivatization.
This wasatemporary measure which hasbeen taken until theSupreme Rada approves theListofObjects
NotSubject toPrivatization. However, preparation forprivatization iscontinuing bytheFund ofthe
State Property incompliance with thedirections setupbytheState Privatization Programme.
Toaccelerate privatization, theGovernment isdrawing upanumber ofdrafts ofamendments
andsupplements tothecurrent lawofprivatization. TheState Programme ofPrivatization for1994
specified thefollowing high-priority goals inimplementation ofthepurposes oftheGovernment in
privatization:WT/ACC/UKR/7
Page 25
- large-scale privatization ofthetrade enterprises;
- initiation ofprivatization ofindustrial enterprises;
- involvementoftheUkrainiancitizensintoprivatizationbymeansofprivatizationdeposit
accounts;
- development ofthemarket infrastructure;
- creation oftheconditions tospeed upprivatization andafter-privatization operation
ofenterprises;
- creation offavourable conditions forforeign investors toparticipate inprivatization.
TheResolution oftheSupreme Rada of29July 1994, "OnPerfection oftheMechanism of
PrivatizationandStrengtheningofControloveritsImplementation"suspendedtheconclusionofcontracts
forsaleorlease withredemption toownership ofState enterprises sothatthemechanism ofprivatization
canbeperfected. Toimplement thisResolution, theGovernment hasdrawn upthefollowing draft
laws andresolutions:
- Resolution oftheSupreme Rada "On Adoption oftheListofEntities notSubject to
Privatization";
- TheLaw ofUkraine "On Amendments andSupplements toLegal Regulations with
regard toPrivatization";
- The Law ofUkraine "On Lease oftheProperty ofState-owned Enterprises and
Organizations";
- TheResolution oftheCabinet ofMinisters "OnAmendments toMethods ofEvaluation
oftheCosts ofPrivatization Objects".
Thedecision onnewregulations regarding contracts forthesaleofprivatization objects will
betaken bytheSupreme Rada after itexamines thelaws andresolutions above.
According tothePlan onEconomic Reforms, bytheendof1995 theGovernment ofUkraine
isgoing toprivatize 90percent ofsmall enterprises through auction, purchase small privatized
enterprises andcarry outtheproperty certification system. Furthermore, according totheschedule
bytheendof1995 theprogramme onlarge-scale privatization ofsmall, large andmiddle-size enterprises
must becarried outinorder toprivatized 8.000 small andmiddle-size enterprises bytheendofthe
year.
Question 8.
Please provide thepercentage ofsmall andmedium scale enterprises thathave been privatized.
WhatisthepercentageoflargeState-ownedenterprisesthathavebeenprivatized?Howmanyenterprises
ineach category areexpected tobeprivatized during thenext year?
Reply 8.
During thefirstninemonths of1994, 43.9 percentofsmall scale and22.8 percentofmedium
andlarge scale enterprises were privatized incompliance with theprovisions oftheState ProgrammeWT/ACC/UKR/7
Page 26
ofPrivatization tobeimplemented in1994. New privatization quotas willnow besetbytheState
Privatization Programme 1995. Atpresent 10,214 enterprises have been privatized, 6,328 small-scale
enterprises included. In1995 itisplanned tocomplete small-scale privatization. Also, large-scale and
medium scale State-owned enterprises willbeconverted intopublic corporations incompliance with
theDecree ofthePresident "On Corporatization ofEnterprises".
According todatafor1January 1995, 11,502 units hadbeen privatized inUkraine. That figure
includes 7,967 units privatized in1994, which is2.2times more thanwere privatized in1993. In1993-
1994 themost privatization took place inindustry, construction, retailing andfood retailing, consumer
services, where, in1994, 2,156, 1,084, 4,422 and2,830 units were privatized, respectively.
Question 9.
PleaseelaborateontheprivatizationofformerUkrainianagriculturaltradeorganizations.Which
ofthose stilldominate intrade inthemajor agricultural commodity groups? What percentage ofimports,
bycommodity, dothey provide?
Reply 9.
Theprivatization ofagricultural andfood processing enterprises willbeeffected incompliance
with theDecree ofthePresident ofUkraine "On Peculiarities ofPrivatization ofProperty inAgro-
Industrial Complex". Itestablishes thatenterprises thatprocess agricultural products ormaintain
agricultural enterprises beprivatized mainly bytheconversion intopublic corporations, themajor
shareholding being distributed between producers ofagricultural products; theState-owned agricultural
enterprises beconverted inprivatization intocollective agricultural enterprises. Inthiscasethemembers
ofsuch enterprises willgetcompensation forproperty owned byacollective andconveyed freeof
charge totheState. Itisplanned thatallState-owned agricultural enterprises willbeprivatized. About
3,757 State-owned trade andpublic catering enterprises have been privatized asof1October 1994.
During thesame period 179State-owned agricultural enterprises were privatized which accounted for
13percent oftheir total number. Ahigher rateofprivatization wasobserved inthefood industry.
Thus, inthemilk canning industry, cigarette, vegetable oilandbeer production, approximately half
oftheenterprises have been privatized.
The system oftheMinistry ofAgriculture andFood includes thefollowing State trading
organisations:
Ukrtekhagroservis exports -agricultural products
imports -agricultural equipment -70%
-fuelandlubricants -20%
Ukrprodresursyrovyna exports -dairy andmeat products
imports -material andtechnical supplies fortheprocessing industry -30%
Ukragrokhim exports -agricultural products
imports -herbicides andpesticides -70%
Ninety-one industrial complexes wholesaling andretailing fruit andvegetables:
exports -potatoes
-fruit
-vegetables
imports -fruit -5%
-vegetablesWT/ACC/UKR/7
Page 27
In1995, 18of109fruit andvegetable complexes were privatized. Therestareplanned tobe
privatized by31December 1996.
Theconcern Ukrtekhagroservis andtheassociation Ukragrokhim areplanned tobeprivatized
through auction bytheyear 2000.
Question 27n.
The reply question No. 7addressed theobjectives andstatus ofUkraine 'sprivatization
programme. Itisstated thatsuspension ofconcluding contracts forprivatization bysaleorlease in
July 1994 isatemporary measure taken pending Supreme Rada approval oftheListofObjects Not
Subject toPrivatization.
How does Ukraine define "privatized"? What areUkraine 'sgoals forprivatization ofmedium
andlarge scale enterprises, andhow willitbeaccomplished?
Reply 27n.
According totheLawofUkraine "OnPrivatization ofProperty ofState Enterprises" (Article 1
item1)privatizationofpropertyofStateenterprisesmeansalienationofnational,republicanormunicipal
property forthebenefit ofnatural andnon-State legal persons. Thus, privatization isacquisition for
private ownership ofenterprises, ventures, shops, plots andother subdivisions ofenterprises which
aredetaching intheseparate enterprises attheState andlocal Radas ofPeople 'sDeputies bycitizens
andjoint stock partnerships.
Privatization isoneofthemain directions oftheeconomy reforming which includes intensive
privatization ofsmall enterprises andconsecutive privatization ofmedium andlarge scale State
enterprises.ThepurposeofprivatizationistotransferStatepropertytotheprivatepersonsandeconomic
agents so,thatinState ownership remained property essential forperforming State 'sfunctions, that
isderive from theState ownership enterprises andleave only budget organizations andinstitutions.
Privatization ofenterprises iscarried outattheframework oftheState privatization programme
which isanintegral partoftheprogramme ofcreating market economy ofUkraine. Theprogramme
envisage achievement ofthefollowing goals:
- change ofownership atthemeans ofproduction withthepurpose oftheir fruitful usage;
- creation ofthenon-State owners division asabase ofdiversified socially oriented
economy;
- development ofcompetition andmonopoly restriction;
- attraction offoreign investments;
Programme determines priorities andconditions ofproperty privatization, assignment on
privatization atthecurrent year andforecast onchanges ofownership structure atthefuture.
Main forms ofprivatization according totheconception ofdenationalization andprivatization
ofenterprises, land andhousing fund which wasconfirmed bySupreme Rada ofUkraine in1991 are:
- purchase andsaleoftheState property atcontest orauction;WT/ACC/UKR/7
Page 28
- purchase andsaleofstocks forthecapital ofenterprise atthecontest, auction, stock
exchange, onsubscription;
- purchase ofproperty which wasleased with theright ofpurchase;
- purchase ofState property which wasleased;
- purchase ofproperty bythestaff;
- liquidation ofenterprise according tothelegislation ofUkraine andsaleofitsproperty
atthecontest, auction, exchange.
Inorder toprovide effective process ofprivatization following modes ofpreparation ofState
enterprises fortheprivatization areCorporatization ofenterprises:
- liquidation ofenterprises which were declared bankrupt according tothecurrent
legislation;
- sanation ofenterprises;
- commercialization ofthecertain enterprise 'sdivisions.
Corporatization means transformation oftheState enterprises, industrial associations onthe
State initiative intotheopen joint-stock partnerships. Itmeans thatcorporatization iscompulsory applied
toallmedium andlarge scale enterprises, thatisenterprises which value exceeds certain level defined
bytheState forthispurpose. Stocks ofenterprises after conducting their corporatization and
transforming them intojoint-stock enterprise uptothefinal privatization areowned bytheState.
Privatized enterprises mean enterprises, which were privatized through oneofthemethods
ofprivatization (See Answer 28n), andasaresult ofwhich there wasachange inownership.
According toUkrainian legislation onprivatization, privatization isdivided into"small-scale
enterprises" and"large-scale enterprises". Thebasic criteria isthevalue ofthecharter fund ofthe
enterprise on1May 1992. Thelaws ofUkraine "OnthePrivatization ofSmall Government Enterprises
(Small-scale Privatization)" or"OnPrivatizing theProperty ofGovernment Enterprises (Law onLarge-
scale Privatization)" then apply.
Inorder todetermine theprocedures forprivatization, statutory acts(regulations, resolutions,
decrees), developed bytheState Property Fund ofUkraine andtheCabinet ofMinisters ofUkraine,
then apply. These arethebasic acts:
- Procedures fortheSubmission andExamination ofanApplication forPrivatization;
- Provisions onthePrivatization Commission;
- Provisions onthePrivatization Plan;
- Provisions onApplying Privatization Measures totheProperty ofState Enterprises;
- Provisions onMaking Payments forUnits Acquired through Privatization;WT/ACC/UKR/7
Page 29
- Procedures forTransforming State Enterprises intoJoint Stock Companies through
Privatization.
Theprogramme forprivatization provides forthefollowing main aims:
- changing thetype ofownership ofthemeans ofproduction with theaimofimproving
quality andefficiency;
- establishing agroup ofnon-government property owners asabasis foramulti-layered
socially-oriented economy;
- restructuring oftheeconomy;
- stabilization oftheeconomy;
- developing competition andrestricting monopolies;
- attracting foreign investment.
Question 28n.
What progress hasbeen made bytheSupreme Rada onconsideration ofprivatization laws?
What exactly ismeant bythephrase "with redemption toownership ofState enterprises?"
Reply 28n.
Thefollowing methods ofprivatization areused:
- abuy-out ofsmall enterprises byassociations ofbuyers, established bytheworkers
oftheenterprises;
- abuy-out oftheState property oftheenterprise according tothealternative plan of
privatization;
- abuy-out ofState property, which hadbeen leased.
Abuy-out ofsmall enterprises isamethod under which association ofbuyers, established by
theworkers oftheenterprises, become theowner ofthese enterprises.
Abuy-out oftheState property oftheenterprise according tothealternative planofprivatization
isthemethod ofprivatization according towhich association ofbuyers, established bytheworkers
oftheenterprises become theowner oftheenterprise (orapartofit)according totheplan, which
altered theplan proposed bytheprivatization commission.
Abuy-out ofState property, which hadbeen leased isthemethod under which thelessor is
theowner oftheenterprise according tolease agreement (suspended since theendof1994).
Question 29n.
--Reply No.8States thatnearly halfofUkraine 'ssmall-scale enterprises have been privatized, as
well asover afifth ofthelarger firms.WT/ACC/UKR/7
Page 30
Please indicate what "privatization" means inthiscase, e.g., doallthese firms have private
owners, oristhere significant residual State ownership? Ifso,how much?
Reply 29n.
Inthiscase term "privatization" means thatallthese firms areprivately owned.
Inthemajority ofcases small privatized enterprises owned byprivate owners. Concerning
thepartofState enterprises which were privatized, those partamounted tonomore than 30percent
with possible saleoftheState Property Fund shares through theexchange, which willcause thechange
ofownership.
Question 30n.
Please describe briefly theprovisions ofthePresidential Decree "On Corporatization of
Enterprises." Inthisregard, what arethecharacteristics ofa"public corporation?" Does anygovernment
orState-run entity retain ownership shares under thisform ofownership?
Reply 30n.
Transition ofenterprises from State totheprivate sector connected with thecertain difficulties.
That iswhy taking intoconsideration toosmall capital markets andalsoinsufficiency oftheforeign
investments theGovernment decided thatprivatization ofmedium andlarge scale enterprise should
bepreceded bytheir corporatization. Process ofcorporatization isdefined bytheDecree ofthePresident
ofUkraine of15June 1993 "On Corporatization ofEnterprises". Decree define thatcorporatization
means transformation oftheState enterprises, closed joint-stock ventures inwhich 75percentofthe
authorized fund aretheState ownership, intotheopen joint-stock ventures. Thepurpose ofthisDecree
istoachieve such State ofeconomy when corporation isinState ownership butunder theprivate
supervision.
Next stepafter corporatization istheselling ofthecompany totheprivate persons butforthis
purpose developed capital market which includes bank andexchange middlemen isnecessary.
According totheDecree founder oftheopen joint-stock venture istheFund ofState Property
anditsregional departments. Duties oftheHead ofthejoint-stock venture 'sboard areplaced onthe
head ofthecorporized enterprise.
Question 31n.
Ofthe22.8 percent ofmedium andlarge scale enterprises privatized through thefirst nine
months of1994, what aretheseparate ratios of"medium" andof"large scale" enterprises?
Reply 31n.
According totheprogramme forprivatization ofmedium andlarge scale enterprises in1995
based ondata oftheFund ofState Property, which istheState body responsible fortheprocess of
privatization inUkraine, in1995 should beprivatized 8thousand medium andlarge scale enterprises.
AttheState forMay 1995 totheFund came information from itsregional departments ontheprocess
ofprivatization in5,334 enterprises. Along with this1,863 areatthestage ofcorporatization,
779-rental enterprises which aretransformed intoopen joint-stock ventures, 1,303 -enterprises of
theagro-industrial complex. In1,389 enterprises work atthepreparation totheprivatization wasnotWT/ACC/UKR/7
Page 31
started. Besides thisFund ofState Property wait fortheproposals onprivatization procedure atthe
2,700 enterprises more.
Atthebeginning ofMay 1995 inthenon-State sector ofindustry were working 4,400
(49percent) enterprises which specific weight inthetotal volume ofproduction came to38percent
including 1,800 joint-stock ventures which specific weight inthenon-State sector amounted to
41percent, volume ofproduction- 60percents.
Through thefirst quarter of1995 amount ofagricultural (farmer) farms increased at1,057
andtothefirst ofApril came to3,000. They areusing 729,000 haoftheagricultural areas or
1,8percent oftheir total area.
Through thefirstquarter of1995 1,250 units were privatized inthisamount: retail trade- 401,
service- 201, industry- 312, construction- 74.
Thedefinition oftheterms "large, medium andsmall enterprises" isgiven in... documents.
Theprivatization programme provides thatthere should be2butnot3categories, i.e., 2categories:
large-medium andsmall enterprises.
Question 32n.
--Reply No.9States that"...that allState-owned agricultural enterprises willbeprivatized," butdoes
notadequately respond totheother partofthequestion, i.e., which oftheformer agricultural trade
organizations stilldominate intrade inmajor commodities.
Reply 32n.
According tothedataoftheMinistry ofAgricultural Production attheState forMay 1995
more than400State agricultural enterprises (20percent) were privatized and18percentofprocessing
andagroservice enterprises. Atthebase ofreformed Soviet farms joint-stock ventures arecreated
andattheprocessing andagroservice enterprises- open joint-stock ventures. Inthecollective sector
(which isactually alsotheform ofState enterprise) 96percent ofthecollective farms arealready
transformed intojoint-stock ventures.
Theprogrammeofmarkettransformationofagriculturewhichenvisagescompletionofprocessing
andconsiderable partofagroservice enterprises andalsoSoviet farms isconfirmed for1995.
The system oftheMinistry ofAgriculture andFood includes thefollowing State trading
organisations:
Ukrtekhagroservis exports -agricultural products
imports -agricultural equipment -70%
-fuelandlubricants -20%
Ukrprodresursyrovyna exports -dairy andmeat products
imports -material andtechnical supplies
fortheprocessing industry -30%
Ukragrokhim exports -agricultural products
imports -herbicides andpesticides -70%
Ninety-one industrial complexes wholesaling andretailing fruit andvegetables:WT/ACC/UKR/7
Page 32
exports -potatoes
-fruit
-vegetables
imports -fruit -5%
-vegetables
In1995, 18of109fruit andvegetable complexes were privatized. Therestareplanned tobe
privatized bythe31.12.1996.
Theconcern Ukrtekhagroservis andtheassociation Ukragrokhim areplanned tobeprivatized
through auction bytheyear 2000.
Question 33n.
Please indicate thetrade organizations andthecommodities whose trade they stilldominate
andprovide alistoftheremaining State-owned agricultural enterprises byagricultural product sector.
Reply 33n.
Agro-industrial complex ofUkraine now includes: (a)according tothetype ofownership-
collective agricultural enterprises, Soviet farms- State enterprises; (b)agricultural (farmer) farms- not
State-owned enterprises. According tothefunctional intention: processing, construction andother
enterprisesandorganizationwhichserveproducersofthefoodcommodities.Numberofpeopleworking
intheagro-industrial complex exceeds 4million. Specific weight oftheState enterprises amounts
to25percent, non-State -75percent. Inthenon-State enterprises engaged 71percent ofall
agricultural workers, theareaoftheagricultural their lands amounts to75percent, value ofthecapital
production assets -72percents, volume ofthegross production -70percent. During theperiod from
1991 to1995 number offarmer non-State farms increased from 2,100 to32,000.
AttheState forthebeginning of1995 approximately 10,000 enterprises areremaining State-
owned, volume ofthegross production ofthisenterprises comes to30percent, butaccording tothe
privatization programme allthese enterprises aretobeprivatized until theendof1995.
Atpresent, 18fruitandvegetable wholesale andretail industrial complexes have been privatized
through thecreation ofjoint stock companies. They mainly trade inpotatoes, andfruit andvegetables.
They import 5percent ofallgoods.
According tocurrent data, more than 400State farms andother State agricultural enterprises
(one fifth) have been privatized andaswell as18percent ofprocessing andagricultural service
enterprises. TheState farms have been reformed toagricultural enterprises andjoint stock associations,
andprocessing andagricultural services enterprises have been changed topublic corporations.
Approximately 9,000 collective farms, thatis96percent, have been reformed through the
process ofdividing theproperty intoshares. Thecollective farms have been reformed intocollective
agricultural enterprises, peasants 'associations, cooperative associations, andstock-holding companies.
Question 34n.
Inaddition, what portion ofimports offood commodities dothetrade organizations provide?WT/ACC/UKR/7
Page 33
Reply 34n.
State organizations oftheagro-industrial complex donotspecialize inimport offood
commodities. Import ofthefood commodities iscarried outbythetrade enterprises which were almost
allprivatized during theperiod ofsmall privatization.
Ninety-one industrial complexes wholesaling andretailing fruit andvegetables now, tosome
extent, specialized inimport offood, inparticular, they importing potatoes, fruit andvegetables. 9
ofthese 91industrial complexes wholesaling andretailing fruit andvegetables hasbeen privatized to
date. Theabove-mentioned imports compiled 5percentofthetotal volume ofagricultural products
turnover. In1995, 18of109industrial complexes wholesaling andretailing fruit andvegetables were
privatized. Therestofthem willbeprivatized till31December 1996.
Question 35n.
Please elaborate onthedifference between a"public corporation," a"collective," andsome
other form ofprivatization asitwillrelate toprivatization ofagricultural enterprises noted inthisreply.
Reply 35n.
There isaprincipal difference between a"public corporation" andcollective andSoviet farms.
Theterm of"collective farm andSoviet farm" means State enterprises. "Corporation"- isthefirststep
increating private enterprise attheframework offormer collective andSoviet farms bytheir
transformation intothejoint-stock ventures.
Therestructuring ofcollective andState farms hastaken four forms:
(a) creation of"lease cooperatives" (arendny collective) ascomparatively independent subdivisions
ofexisting kolhosps andradhosps;
(b) expansion andstrengthening ofindividual subsidiary farms within theexisting kolhosp structure
andorganization offarms organization intocooperatives;
(c) conversion ofthekolhosps intojoint stock societies;
(d) separation ofindividual peasant farms orcooperatives from thekolhosp orradhosp structure.
Existing radhosps, i.e.,State farms, aredenationalized though "collective" privatization. By
thisway ofprivatization they canavoid tobreak existing agricultural complexes. Sharing ofthe
collective property isthesecond stage ofprivatization reform. Itmeans, theeach member ofthe
collective istheshare-holder andconsidering asaland-owner. Inthisparticular casetheshare-holder
certificate isissued. Iftheshare-holder would liketotake hisshare outofthecollective property,
hehastheright todothis, butthemeeting ofshare-holder willconsider which partoftheland the
share-holder, submitted theapplication, willobtain. Thedecision ofthemeeting isapproved bythe
State Actontheprivate ownership onland. TheLaws ofUkraine "On Associations", "On Private
Farming"andthePresidentialDecree"OnUrgentMeasurestoExpeditetheLandReforminAgriculture"
of1994 areapproved these procedures.
Question 36n.
What isthephase-out schedule fortheremaining agricultural enterprises?WT/ACC/UKR/7
Page 34
Reply 36n.
OntheproposaloftheMinistryofAgriculturalProductiontheGovernmentconfirmedProgramme
ofmarket transformations intheagro-industrial complex for1995. TheProgramme provide completion
ofprivatization ofprocessing andconsiderable partoftheagro-service enterprises, andalsoSoviet
farms uptotheendof1995.
In1995, theprogramme foreconomic transformation oftheagricultural sector wasapproved,
which provides fortheprivatization of724State farms which areState property, andalso 1,960
processing, agricultural service enterprises, andconstruction enterprises.
Theplans forprivatization, which aremade according toresources available, areapproved
annually bytheSupreme Rada ofUkraine annually.
In1995, 18of109industrial complexes wholesaling andretailing fruit andvegetables were
privatized. Therestofthem willbeprivatized tillDecember 31,1996.
Theconcerns Ukrtekhagroservis, Agrotekhservis andtheassociation Ukragrokhim areplanned
tobeprivatized through auction bytheyear 2000.
Customs Tariff
Question 10.
Please clarify ifUkraine 's1993 tariff schedule andtheprovisions ofResolution 285thatrevise
thatschedule arethelatest information onUkraine 'stariff rates. Ifthere ismore current information,
please provide itaswell asimport data bytariff lineandsupplier country.
Reply 10.
Thechanges intopreferential orfullrates ofimport duties oftheUnified Customs Tariffs
ofUkraine thatcover particular goods were introduced bytheResolutions oftheCabinet ofMinisters
No575of22August 1994 andNo285of3May 1994 (the latter provides notonly foranincrease
inimport duty rates forsome goods butforasignificant decrease inthem foraconsiderable portion
ofthegoods). Also, some goods areexempted from import duties bytheUkrainian President 'sDecree
No502/94 of7September 1994 "On Measures toRegulate Prices onParticular Periodicals". The
dataarethelatest information onchanges intherates. Therestoftheschedule remains unchanged.
Anewtariff schedule iscurrently being prepared andshould befinalized inearly 1995. Trade data
atthelevel ofdetail currently maintained isattached.
LIST
ofParticular Types ofGoods forwhich Customs Duty
Have Been Changed
(Incompliance with Resolutions 285, 139, 622)
HSCode Description ofGoods According HS Rates ofDuty
Favourable Full
01.02 10000 Live bovine animals (pure-bred) 0 10
01.03 10000 " "
01.04 10100 " "
01.04 20100 " "WT/ACC/UKR/7
Page 35
02.01 Meat ofbovine animals, fresh orchilled 15 30
02.02 Meat ofbovine animals, frozen 20 50
02.03 Meat ofswine, fresh, chilled orfrozen 20 50
02.04 Meat ofsheep orgoats, fresh, chilled or
frozen 15 30
02.05 Meat ofhorses, asses, mules orhinnies,
fresh, chilled orfrozen 15 30
02.06 Edible offal ofbovine animals, swine, sheep,
goats, horses, asses, mules orhinnies,
fresh, chilled orfrozen 20 50
02.07 Meat ofedible offal, ofthepoultry of
heading No.0105, fresh, chilled orfrozen 20 50
02.08 Other meat andedible meat offal, fresh,
chilled orfrozen 5 30
02.09 Pigfatfreeoflean meat andpoultry fat
(notrendered), fresh, chilled, frozen,
salted, inbrine, dried orsmoked 20 50
02.10 Meat andedible meat offal, salted, inbrine,
dried orsmoked; edible flours andmeals of
meat ormeat offal 20 50
03.02 70000 Caviar andcaviar substitutes (sturgeon roe,
salmon roe,other fishandseaproducts) 20 70
03.03 80000 " "
03.05 20000 " "
16.04 20900 " "
16.04 30100 " "
04.01 Milk andcream, notconcentrated norcontaining
added sugar orother sweetening matter 20 50
07.01 Potatoes, fresh orchilled 30 40
(excluded
07.01 10000)
07.02 00900 Tomatoes, fresh orchilled 30 40
(from May 15toOctober 31)
07.04 90100 White cabbages andredcabbages 30 40
07.06 Carrots, turnips, salad beetroot, salsify,
celeriac, radishes andsimilar edible roots,
fresh orchilled 30 40
07.07 00190 Cucumbers andgherkins, fresh or
chilled (from May 16toOctober 31) 30 40
04.02 Milk andcream, concentrated orcontaining
except added sugar orother sweetening matter 20 50
04.02 10110 Preparations forinfant use, putupforretail 0 5
sale
04.02 10990 " "
04.02 21110 " "
04.02 29990 " "
19.01 10000 " "
04.05 Butter andother fatsandoilsderived from 40 80WT/ACC/UKR/7
Page 36
milk
04.06 Cheese andcurd 20 40
04.07 Birds 'eggs, inshell, fresh, preserved or
cooked 20 50
09.01 Coffee 5 30
09.01 11000 Coffee, notroasted 0 10
09.01 12000 " "
10.01 10100 Wheat andmeslin (seeds) 0 20
10.03 00900 Barley other 20 30
10.04 00900 Oats other 20 30
10.05 10110 " "
10.05 10130 " "
10.05 10150 " "
10.08 10000 Buckwheat 20 30
10.08 20000 Millet 30 40
12.04 00100 0 5
12.05 00100 " "
12.09 " "
12.10 Hop cones, fresh ordried, whether ornot
ground, powdered orintheform of
pallets; lupulin 10 20
12.14 0 10
12.08 Flours andmeals ofoilseeds oroleaginous fruits 0 5
12.11 Plants andparts ofplants, seeds andfruits,
ofakind used primarily inpharmacy 0 10
15.12 Sunflower-seed, sunflower orcotton-seed
oilandfractions thereof, whether ornot
refined 30 60
15.16 Animal orvegetable fatsandoilsandtheir
fractions, partly orwholly hydrogenated 20 50
15.17 Margarine, other than edible fatsoroils
ortheir fractions ofheading No15.16 30 60
15.20 Glycerol (glycerine), including pure, glycerol
waters andlyes 0 20
16.01 00990 Sausages cooked 50 100
17.01 Cane orbeet sugar andchemically pure
sucrose, insolid form 30 60
18.01 00000 Cocoa beans, whole orbroken 0 10
18.06 Chocolate andother food preparations
containing cocoa 50 100
21.01 10110 Concentrates ofcoffee andpreparations
onabasis ofthese products (solid) 10 50
22.03 Beer 30 200
22.04 22.05 Wine, champagne 30 200
22.06 Wine ofanactual alcoholic strength by
volume notlessthan 12% anddessert
beverages (including sparkling wine) 30 60WT/ACC/UKR/7
Page 37
22.07 Ethyl alcohol spirit (without undenatured
ethyl alcohol spirit) 30 350
22.07 20000 Ethyl alcohol andother spirits used to
prepare spirituous juices 30 350
22.08 90910 " "
22.08 90990 " "
22.08 Spirits, liqueurs andother spirituous 50 350
except beverages
22.08 90910
22.08 90990
22.08 Cognac 50 300
24.01 Tobacco 0 50
24.02 Tobacco products 30 200
25.03 Sulphur 60 100
25.10 Natural calcium phosphates 0 5
25.23 Portland cement, aluminous cement,
slagcement, supersulphate cement
andsimilar hydraulic cements,
whether ornotcoloured orinthe
form ofclinkers 30 40
26.06 Aluminum ores andconcentrates 0 5
27.01 Coal 0 10
27.02 27.03 Coke, peat, lignite 0 5
27.04
27.07 Oils andother products ofthedistillation
ofhigh temperature coal tar 0 5
27.09 27.10 Petroleum andpetroleum oils 0 0
27.11 Petroleum gases andother gaseous
hydrocarbons 0 5
28.01 20000 Iodine 0 10
28.04 Helium 0 10
28.05 40100 Mercury inflasks ofnetcontent of
34,5 kg(standard weight) 30 40
28.06 10000 Hydrogen chloride (hydrochloric acid) 15 30
28.09 20000 Phosphoric acid andpolyphosphoric acids 0 10
28.10 Oxides ofboron; boric acid 0 10
28.11 Other inorganic acids 0 10
28.12 10900 Halides 0 10
28.15 Sodium hydroxide (caustic soda); potassium
hydroxide (caustic potash); peroxides ofsodium
andpotassium 0 10
28.25 Hydrozine andhydroxylamine andtheir
inorganic salts 0 10
28.26 30000 Natrium hydrocarbon (bicarbon) 25 30
28.26 90900 Complex fluorine salts (fluorides) others 0 10
28.27 10000 Ammonium chloride 15 30
28.30 90190 Sulphides; polysulphides others 0 10
28.33 Sulphates; alums; peroxosulphates 0 10
28.35 23000 Phosphate oftrisodium 0 10
28.36 20000 Disodium carbonate 25 30
28.36 40000 Potassium carbonates 0 10WT/ACC/UKR/7
Page 38
28.41 60000 Manganites, manganates andpermanganates 0 10
28.42 10000 Double orcomplex silicates 0 10
28.43 10900 Colloidal precious metals others 0 10
28.49 10000 Carbide ofcalcium 0 10
29.10 10900 Acyclic hydrocarbons forother purposes 0 15
29.01 23000 Butane (butylene) andisomers thereof 0 15
29.02 11000 Cyclohexane 0 15
29.02 20900 Benzene 0 15
29.02 30900 Toluene 0 15
29.02 41000 Xylenes 0 15
29.02 42000 " "
29.02 43000 " "
29.02 50000 Styrene 0 15
29.03 11000 Chlormethane (methyl chloride) and
chlorethan (ethyl chloride) 0 15
29.03 22000 Trichlorethylene 0 15
29.04 Derivatives ofhydrocarbons 0 15
29.05 13000 Butane 1-ol., 2-Ethylhexan -1-ol 0 15
29.05 16100 " "
29.07 11000 Phenol 0 15
29.10 10000 Oxirane (ethylene oxide) 0 15
29.10 20000 Methyloxirane (propylene oxide) 0 15
29.14 11000 Acetone 0 15
29.14 19000 Methylperolidonum 0 15
29.14 22000 Cyclohexanone 0 15
29.15 11000 Formic acid
29.15 31000 Ethyl acetate 0 15
29.16 11100 Acrylic andmethacrylic acid 0 15
29.16 11900 " "
29.16 12000 " "
29.16 13000 " "
29.16 14000 " "
29.22 11000 Monoethanolamin 0 15
29.25 19900 " "
29.33 51900 Piperidine 0 15
29.33 71000 6-Hexanelactam (epsilon-caprolactam) 0 15
29.42 Other organic compounds 0 15
31.04 10000 Potassium chloride 0 10
32.04 90000 Phlexographic colouring 0 10
32.08 10100 Varnishes 0 10
32.08 10900 " "
32.08 90990 " "
34.02 Organic surface-active agents, whether or
notputupforretail sale 0 20
34.03 19910 Preparations forlubricating machines,
appliances andvehicles 0 20
38.02 Activated carbon 0 10
38.09 91000 Finishing agents, dyecarriers toaccelerate
thedyeing orfixing ofdyestuffs andother
products andpreparations ofakind used
inthetextile 0 10WT/ACC/UKR/7
Page 39
38.11 Anti-knock preparations 0 10
38.12 Prepared rubber accelerators; compound
plasticisers forrubber orplastics notelsewhere
specified orincluded; anti-oxidising preparations
andother compound stabilizers forrubber orplastics 0 10
39.01 20000 Polyethylene 0 10
39.02 10000 Polypropylene 0 10
39.03 Polymers ofstyrene, inprimary forms 0 10
39.04 Polymers ofvinyl chloride 0 10
39.07 30000 Polycarbonate, epoxide resins 0 10
39.07 40000 " "
39.09 40000 Phenolic resins 0 10
39.11 10000 Petroleum resins, coumarone, indene or
coumarone-indene resins andpolyterpens 0 10
39.12 Cellulose 0 10
39.14 Ion-exchanging resins 0 10
39.19 10510 Film ofpolymers ofvinyl chloride 0 10
39.20 51000 Plastic glass 0 10
40.01 Natural rubber, balata, gutta-percha, guayule,
chicle andsimilar natural gums, inprimary
forms orinplates, sheets orstrips 0 10
40.21 Synthetic rubber andfactice derived from
oils, inprimary forms orinplates, sheets
orstrip; mixtures ofanyproducts ofheading
No4001 with anyproduct ofthis
heading, inprimary forms orinplates,
sheets orstrip 0 10
40.09 Rubber tubes, pipes andhoses 0 10
40.10 Conveyor, transmission belts 0 10
41.04-41.09 Leather ofbovine animals, articles of
42.03 apparel ofleather 5 50
43.01, 43.02 Raw furskins, articles ofapparel of
43.03 furskins 20 50
4402 Wood charcoal (including shell ornut
charcoal), whether ornotagglomerated 0 5
44.01 10000 Wood andarticles ofwood 0 5
44.03 10910 " "
44.03 10990 " "
44.03 91000 " "
44.03 99900 " "
44.07-44.12 " "
47.01-47.07 Mechanical wood pulp, pulps ofother 0 5
fibrous material, waste andscrap ofpaper
orpaperboard
48.01, 48.02 Paper, paperboard 0 10
48.04, 48.05 " "
48.10 " "
48.06 10000 Vegetable parchment 0 10
48.06 40100 Glassine papers 0 10WT/ACC/UKR/7
Page 40
48.08 20000 Sack kraft paper, creped orcrinkled,
whether ornotembossed orperforated 0 10
48.14 Wallpaper andsimilar wall coverings;
window transparencies ofpaper 20 40
48.20 20000 Exercise books 0 5
51.01 Wool 0 5
51.06, 51.07 Wool yarn, cotton yarn 0 5
52.07, 52.05 " "
52.06 " "
51.11, 51.12 Fabrics 0 10
52.08-52.12 " "
54.07, 54.08 " "
55-12-55.16 " "
56.03 " "
52.01 Cotton 0 10
53.01 Flax, raworprocessed butnotspun;
flaxtowandwaste (including yarn
waste andgarnetted stock) 10 20
53.02 True hemp (Cannabis sativa L.)rawor
processed butnotspun; towandwaste
ortruehemp (including yarn waste and
garnetted stock) 10 20
53.03 Jutefibre 0 5
54.01-54.06 Synthetic thread andyarn 0 10
55.01-55.11 " "
57.01-57.05 Carpets andother textile floor coverings,
knotted 20 60
59.04 10000 Linoleum, whether ornotcutto
59.04 91900 shape applied onatextile backing 25 30
61.04-61-14, Clothing andclothing accessories
61.17 knotted 30 40
62.01-62.15 Clothing andclothing accessories
textile (except knotted) 30 40
68.07 Articles ofasphalt orofsimilar material
forexample, petroleum bitumen or
coal tarpitch 15 20
68.11 10000 Articles ofasbestos-cement, ofcellulose
68.11 30000 fibre-cement orthelikecorrugated
sheets, tubes, pipes andtube orpipe
fittings 30 40
69.08 Glazed ceramic flags andpaving, hearth
wall tiles; glazed ceramic mosaic cubes
andthelike, whether ornotonabacking 15 20
69.10 Ceramic sinks, wash basins, wash basin
pedestals, baths, bidets, water closet pans,
flushing cisterns, urinals andsimilar
sanitary fixtures 15 20
69.11 Tableware, kitchenware, other household
articles andtoilet articles, ofporcelain or
china 15 20WT/ACC/UKR/7
Page 41
69.13 10000 Ceramic articles ofporcelain orchina 5 40
69.14 10000 " "
70.03 Cast glass androlled glass, insheets or
profiles, whether ornothaving anabsorbent
orreflecting layer, butnototherwise worked 15 20
70.04 Drawn glass andblown glass, insheets,
whether ornothaving anabsorbent or
reflecting layer, butnototherwise worked 15 20
70.13 21110 Crystal articles gathered byhand 10 50
70.13 21190 " "
70.13 31100 " "
70.13 99100 " "
71.13, 71.14 Articles ofjewellery andparts thereof,
71.16 including articles with diamonds, precious
orsemi-precious stones 50 150
71.13 20000 Kitchenware ofbase metal clad with
silver orgold 20 60
71.14 20000 " "
71.15 90900 " "
71.15 10000 Other articles ofprecious metal clad with
precious metal 0 30
71.15 90100 " "
73.04 20100 Drill pipe 0 20
73.06 20000 Casing andtubing ofakind used indrilling
foroilorgas 0 20
73.08 Structures (excluding prefabricated buildings 0 5
ofheading No.9406) andparts ofstructures
ofiron orsteel; plates, rods, angles, shapes,
sections, tubes andthelike, prepared
foruseinstructures, ofiron orsteel
73.21 11100 Cooking appliances andplate warmers 20 30
forgasfuelorforboth gasandother
fuelwith oven, including separate ovens
73.22 Radiators forcentral heating, notelectrically
heated, andparts thereof, ofiron orsteel;
airheaters andhotairdistributors
(including distributors which canalsodistribute
fresh orconditioned air), notelectrically
heated, incorporating amotor-driven fanor
blower, andparts thereof, ofiron orsteel 15 20
73.24 21000 Baths ofcastiron, whether ornot 15 20
73.24 29000 enamelled
74.01-74.04 Copper, copper waste andscrap 0 5
74.07, 74.09 Copper bars, rods andprofiles 0 5
75.01-85.03 Nickel, nickel waste andscrap 0 5
75.05, 75.06 Nickel bars, rods, profiles andwire 0 5
76.01 Aluminum 0 5
76.02 Aluminum waste andscrap 0 5
76.04, 76.06 Aluminum bars, rods andprofiles 0 5
76.08 Aluminum foil 0 5
78.01 Lead 0 5WT/ACC/UKR/7
Page 42
78.02 Lead waste andscrap 0 5
79.01 Zinc 0 5
79.02 Zinc waste andscrap 0 5
79.04, 79.05 Zinc bars, rods, profiles andwire 0 5
80.01-80.04 Tin, tinwaste, tinbars, rods, profiles 0 5
81.01 Tungsten (wolfram) andarticles thereof,
including waste andscrap 0 5
81.02 Molybdenum andarticles thereof, including
waste andscrap 0 5
81.04 Magnesium andarticles thereof, including
waste andscrap 0 5
81.05 Cobalt matters, including waste andscrap 0 5
81.06 Bismuth andarticles thereof, including
waste andscrap 0 5
81.07 Cadmium andarticles thereof, including
waste andscrap 0 10
81.11 Manganese andarticles thereof, including
waste andscrap 0 10
81.12 Gallium andarticles thereof, including
waste andscrap 0 10
82.02 31100 Circular sawblades (including slitting or
82.02 31590 slotting sawblades) 0 10
82.07 30900 Changeable tools forstemping tubes in
84.59 70000 0 10
84.01 Nuclear reactors; fuelelements (cartridges) 0 10
non-irradiated, fornuclear reactors; machinery
andapparatus forisotopic separation
84.08 Parts suitable foruseinagricultural machines 0 10
(excluding positions 87.03, 87.04)
84.09 Parts suitable forusesolely orprincipally with 0 10
theengines
84.09 91000 " "
84.11 Turbo-jets, turbo-propellers andother gas 0 10
turbines
84.13 Pumps forliquids, whether ornotfitted 0 10
with ameasuring device; liquid elevators
84.17 20900 Bakery ovens, including biscuit ovens 10 20
84.18 Refrigerators, freezers andother refridgerating 5 30
orfreezing equipment, electric orother; heat pumps
84.18 21910 Refrigerators, household type, compression
84.18 21990 type norexceeding 340litres capacity 25 30
84.18 40910 Freezers oftheupright type, not
exceeding 900litres capacity 25 30
84.19 Machinery, plant orlaboratory equipment 5 30
whether ornotelectrically heated, forthe
treatment ofmaterials byaprocess involving
achange oftemperature
84.21 11000 Cream separators 10 2
84.22 Dish-washing machines; machinery for 5 30
cleaning ordrying containers; machinery
forfilling andclosing bottles
84.22 20000 Machinery forcleaning ordrying bottlesWT/ACC/UKR/7
Page 43
andother containers 20 30
84.32
84.24 Mechanical appliances (whether ornot 5 30
hand-operated) forspraying liquids orpowders
84.25 Pulley tackle andhoists other than skip 5 30
hoists; winches andcapstans; jacks
84.27 Fork-lift trucks; other works trucks fitted 5 30
with lifting orhandling equipment
84.28 Other lifting, handling, loading orunloading 5 30
machinery (forexample, lifts, escalators, conveyors)
84.29 Self-propelled bulldozers, angledozers 5 30
graders, levellers, scrapers, mechanical shovels,
excavators, shovel loaders, tamping machines
androad rollers
84.30 Other moving, grading, levelling, scraping 5 30
excavating, tamping, compacting, extracting
orboring machines
except
84.30 49000 Drilling, oilandgasequipment, spare parts 0 10
84.31 43000 " "
84.32 10100 Ploughs mouldboard andothers 20 30
84.32 10900
84.32 21000 Disc harrows 20 30
84.32 29100 Scarifiers andcultivators 20 30
84.32 29300 Harrows 20 30
84.32 90100 Ploughshares 30 40
84.32 90900 " "
84.33 11000 Harvesting orthreshing machinery, including
straw orfodder balers; mowers forlawns,
parks orsportgrounds with thecutting
device rotating inahorizontal plane, electrical 20 30
84.33 53300 Beet-topping machines andbeet
harvesters 10 15
84.33 90000 " "
84.34 10000 Milking machines 15 20
84.34 90000 " "
84.36 10100 Crushers andother mills forcereals,
beans, peas andlike 20 30
84.36 91000 Poultry-keeping machinery 20 30
84.36 99000 " "
84.38 10100 Bakery machinery 20 30
84.38 30000 Machinery forsugar manufacture 20 30
84.38 50000 Machinery forthepreparation ofmeat
andpoultry 20 30
84.38 90000 Parts 0 10
84.43 19900 Printing machinery; other printing
apparatus andequipment 10 20
84.45-84.49 Machines forlight industry 0 10
84.50 11100 Household orlaundry-type washing
machines, including machines which
both wash anddry, each ofadrylinen
capacity notexceeding 6kg 25 30WT/ACC/UKR/7
Page 44
84.51-84.53 " "
84.58 11990 Machine-tools forcutting pipes,
84.59 70000 numerically controlled 0 10
84.61 50110 Sawing orcutting-off machines 0 10
84.62 91990 Hydraulic presses 0 10
84.65 Machine-tools forworking wood, cork 5 30
bone, hard rubber, hard plastics orsimilar
hard materials
84.66 94000 Parts andspecial attachments topress
ofheading 84.62 91900
84.67 Tools forworking inthehand, pneumatic 5 30
orwith self-contained non-electric motor
84.68 Machinery andapparatus forwelding 5 30
other than those ofheading No85.15
84.69 Typewriters 10 40
84.70 Calculating machines; accounting machines 10 20
postage-franking machines, ticket-issuing
machines andsimilar machines, incorporating
acalculating device
84.71 Automatic data-processing machines and 10 40
units thereof; magnetic oroptical readers
84.71 20900 Automatic data-processing machines for
machine-tools ofheadings 84.58 11990 and
84.59 70000 0 20
84.72 Other office machines (hectograph orstencil 10 40
duplicating machines, automatic banknote
dispensers, coin-sorting machines)
84.77 40000 Vacuum-mouling machines andother
thermoforming machines 0 10
84.79 81000 Mechanical appliances thermoprocessing,
marking, labelling, preserving andmeasuring
ofweight, length oftubes andpipes 0 10
84.79 82000 Reactors-polymerizators forÏÕÂÑ
manufacturing 0 10
84.81 Taps, cocks, valves andsimilar appliances 0 10
forpipes, boiler shells, tanks, vatsorthe
like, including pressure-reducing valves and
thermostatically controlled valves
85.01 53910 Electric multiphase engines ofanoutput 0 10
over 75kwbutnotexceeding 750kw
85.07 Electric accumulators, including separators 0 10
85.16 5000 Microwave ovens 10 40
85.17 Electrical apparatus forlinetelephony or 10 40
linetelegraphy
85.18 Microphones andstands thereof; loudspeakers 10 40
85.19 Turntables (record-desks), record-players 10 40
cassette-players andother sound reproducing
apparatus, notincorporating asound-recording device
85.20 Magnetic tape recorders andother sound 10 40
recording apparatus
85.21 Video recording orreproducing apparatus 10 40
85.22 Parts andaccessories ofapparatus ofheading 10 40WT/ACC/UKR/7
Page 45
85.19-85.21
85.23 Prepared unrecorded media forsound recording 10 40
orsimilar recording ofother phenomena
85.29 10500 Parts suitable forusesolely orprincipally
85.29 10700 with theapparatus ofheading No85.25
aerials oraerial reflectors ofallkinds 0 20
85.32 Electrical capacitors, fixed, variable or
adjustable 0 10
85.33 Electrical resistors (including rheostats
andpotentiometers), other than heating
resistors 0 10
85.40 42000 Klystrons 0 10
85.40 49000 Travelling wave tubes 0 10
84.50 81000 Receiver oramplifier valves andtubes 0 10
85.41 Diodes, transistors andsimilar semiconductor
devices; photosensitive semiconductor
devices, including photovoltaic cells
whether ornotassembled inmodules or
made upintopanels; light-emitting diodes;
mounted piezo-electric crystals 0 10
85.42 Electronic integrated circuits and
microassemblies 0 10
(except
85.42 11100
85.42 11300
85.42 19100
85.42 19200)
85.44 11100 Insulated wire ofcopper, lacquered or 0 5
enamelled
85.44 20100 Coaxial cables andelectric conductors,
85.44 20910 ready forconnectors tobefitted or
85.44 20990 already provided with connectors;
forhigh frequency 0 10
86.01 Rail locomotives 0 10
86.02 Other raillocomotives; locomotive tenders 0 10
86.03 Self-propelled railway ortramway coaches 0 10
86.04 Railway ortramway maintenance orservice 0 10
vehicles
86.05 Railway ortramway passenger coaches, not 0 10
self-propelled; luggage vans, post office
coaches andother special purpose railway
ortramway coaches, notself-propelled
86.06 Railway ortramway goods vans andwagons 0 5
notself-propelled
86.07 Parts ofrailway ortramway locomotives or 0 5
rolling-stocks
86.08 Railway ortramway tracks fixtures and 0 5
fittings
87.01 10100 Pedestrian-controlled tractors
(ofapower notexceeding 4kw),
87.01 10900 ofapower exceeding 4kw) 30 40WT/ACC/UKR/7
Page 46
Agricultural tractors
(except ofpedestrian-controlled tractors)
andforesty tractors, wheeled -new of
engine power:
87.01 90110 notexceeding 18kw,exceeding 25kw
87.01 90210 butnotexceeding 37kw 30 40
87.01 90350 exceeding 75kwbutnotexceeding 90kw 20 30
87.01 90390 exceeding 90kw 30 40
87.02 Motor vehicles forthetransport (trolley 0 30
buses)
87.03 Motor carsandother motor vehicles principally 0 20
designed forthetransport ofpersons
87.04 10900 Dumpers, designed foroff-highway use,
other (ofagross weight notexceeding
5tonnes) 20 30
87.05 10000 Crane lorries 20 30
87.05 20000 Mobile drilling derricks 20 30
87.05 30000 Fire fighting-vehicles 20 30
87.05 40000 Concrete-mixer lorries 20 30
87.05 90100 Others 20 30
87.05 90300
87.05 90900
87.06 Chassis fitted with engines forthemotor 0 20
except vehicles
87.06 00910
87.07 Bodies (including cabs) forthemotor 0 20
except vehicles
87.07 10100
87.07 10900
87.08 (only Parts andaccessories ofthemotor vehicles 0 20
forpositions
87.02,
87.05)
88.02 Aircraft (aeroplane, helicopters) 0 20
88.05 Aircraft launching gear; deck-arrestor or 0 20
similar gear; ground flying trainers; parts
oftheforegoing articles
89.05 20000 Floating andsubmersible drilling orproduction 0 10
platforms
89.08 Vessels andother floating structures for 0 10
breaking up
90.17 30900 Hand instrument forpipes measuring
byultrasonic method 0 20
90.26 Instruments andapparatus formeasuring 0 10
orchecking theflow, level, pressure or
other variables ofliquids orgases
90.23 Instruments, apparatus andmodels, designed 0 10
fordemonstrational purposes, unsuitable for
other uses
90.24 10990 Appliances forhydraulic testing ofpipes 0 10
90.27 20100 Chromatographer 0 10WT/ACC/UKR/7
Page 47
90.30 Oscilloscopes, spectrum analyzers andother 0 10
instruments andapparatus formeasuring
andchecking electrical quantities; instruments
andapparatus formeasuring ordetecting alpha,
beta, gamma, X-ray, cosmic orother ionizing radiations
90.31 40000 Measuring orchecking instruments for
machine-tools, classified intheheading
84.58 11900 0 10
90.31 90900 Parts forappliances andmechanisms,
classified intheheadings Nos
90.24 10900 and90.31 40000 0 10
94.01 Seats (other than those ofheading No94.02),
whether ornotconvertible intobeds, and
parts thereof 20 30
(except
94.01 10100
94.01 20000
94.01 90100)
94.03 Other furniture andparts thereof 20 30
(except
94.03 10930
94.03 20100
94.03 30910
94.03 60300
94.03 70100)
96.07 Slide fasteners andparts thereof 15 20
Question 11.
Please explain thesudden anddramatic increase incommodity tariffs effective 3May 1994 that
resulted from Resolution 285oftheCabinet ofMinisters ofUkraine. What isUkraine 'sphase-out
plan forthese tariff increases?
Have other resolutions orlegal instruments been promulgated thatfurther affect Ukraine 'stariff
treatment ofimports?
Reply 11.
Incompliance with theProgramme ofEconomic Reform ofthePresident theGovernment took
onresponsibility toreduce themaximum tariff rateto,generally, 30percent by1March 1995.
Question 37n.
Concerning thenew tariff rates reported inthereply toquestion No.10:
Isthenew tariff schedule promised forearly 1995 inthisreply being prepared? When willit
beavailable?WT/ACC/UKR/7
Page 48
Reply 37n.
No,newtariff schedule asitwasreported inthereply No.10 isnotprepared yet.Butaccording
tothepolicy ofeconomic reforms oftheGovernment ofUkraine, supported bytheIMF andtheWorld
Bank, theGovernment ofUkraine meets itsobligations onharmonization ofthecustoms tariff, namely,
adheres tothecondition thatmaximum tariff rateatimport is30percent andthevolume ofimport
attherateover 30percentdoes notexceed 1percentofthetotal import amount. Except this, during
theprocess ofreformation ofthecertain sectors ofproduction, inconnection with availability ofthe
facts ofbankruptcy andcontinuation ofthegeneral falling-out ofproduction, alotofproposals from
ministries anddepartments onincreasing rates ofimport tariff aresubmitted totheGovernment. Some
changes intheexisting import tariff have been already made during thefirsthalfof1995 (Resolution
oftheCabinet ofMinisters ofUkraine No.39, 209andother). Taking intoconsideration necessity
ofthebeginning ofnegotiating process ontariff concessions during theUkraine 'saccession to
GATT/WTO, theGovernment ofUkraine made decision onpreparation oftheconception on
transformation oftheimport tariff atthefive-year period taking intoconsideration proposals ofthe
ministries anddepartments onincreasing rates andalsotaking intoconsideration requirements ofthe
IMF, WBandWTO. Thework onpreparation ofthenewcustoms tariff isexpect tobefulfilled in
September 1995.
Question 38n.
Please confirm that"favourable" rates areUkraine 'sMFN rates ofduty, andthatthe"full" rates
listed arecurrently applied only toIsrael andSouth Africa?
Reply 38n.
Ukraine confirms thatallitstariff rates areMFN rates. Ukraine applies fulltariff rates toIsrael,
South Africa, Taiwan, Croatia andSlovenia.
Question 39n.
--Thereplies toquestions No.11and12areincomplete.
Please indicate thereasons forthedramatic increase incommodity tariffs effective 3May 1994,
based onresolution 285oftheCabinet ofMinisters.
Reply 39n.
TheGovernment ofUkraine hadtoadopt Resolution No.285onproposals andconclusions of
thecertain ministries anddepartments according towhich estimation some enterprises subordinate to
thisministries anddepartments suffered because oftheunsatisfactory protection from theimport of
analogous production.
Question 40n.
Will themaximum ratebereduced to30percent by1March 1995 asplanned?
Reply 40n.
Asitwasmentioned earlier 99percentofgoods Ukraine imports under 30percentandlower
rates according totheProgramme ofEconomic Reform oftheGovernment ofUkraine (Table isWT/ACC/UKR/7
Page 49
enclosed). This factisproved byjoint statement oftheWorld Bank andtheMinistry ofForeign
Economic Relations andTrade ofUkraine (Table isenclosed).
According tothePresidential Decree "OnSafeguards" thisprocedure isprovided forinaccordance
with therules andprinciples ofGATT/WTO. TheDecree willbeadopted attheendof1995.
Question 41n.
What provision forappeal orpublic comment isthere onthedecisions oftheCustoms Tariff
Council?
Reply 41n.
There arenoprovisions forappeal orpublic comment inthedecisions oftheCustoms Tariff
Council. After the"Regulation onProcedures fortheApplication ofSafeguard Measures Pursuant
tothePrinciplesandDisciplinesofGATT/WTO"isadoptedbytheGovernmentofUkrainethissituation
willbepartially improved.
Question 12.
Whatisthestatutorybasisandadministrativeprocedurefortheestablishmentandreviewofvarious
types ofduties andtaxes including advalorem, seasonal customs taxes, "special duties," andexcise
taxes?
Which Government agencies play aroleinsetting various duties andtaxes? Does Parliament
have anyjurisdiction over thisissue?
How arechanges induties announced? Isthere anappeals procedure orprovision forpublic
comment?
Reply 12.
Incompliance with theLaw ofUkraine of28January 1994 "OnAmendments totheDecrees
oftheCabinet ofMinisters onCustoms Duties Regulation" thetaxrates provided forbytheUnified
Customs Tariff ofUkraine may bechanged only inrelation tocustoms taxation subjects. Here, it
isestablished thatdraft laws oncustom duty andtaxregulations including those covering thesetting
andchanging of,orexempting from, such taxes orduties besubmitted forconsideration bytheCabinet
ofMinisters onlyafter consideration andapproval bytheCustoms Tariff Council. This Lawestablished
thisprocedure until 1January 1995. Since then anyamendments totariff rates must beapproved by
theSupreme Rada.
TheLaw "OnUnified Customs Tariff" establishes thatanyamendments tothetariff rates should
beofficially published inaccessible media atleast 45days before these amendments aremade effective.
Theofficial publication ismade inofficial periodicals: "Golos Ukrainy" or"Uryadovy Kurier", the
organs oftheSupreme Rada andtheCabinet ofMinisters, respectively.
TheCustoms Tariff Council wasformed incompliance with Article 5oftheLaw ofUkraine
"On theUnified Customs Tariff" and theResolution oftheCabinet ofMinisters No.62 of
7February 1994, "On theCustoms Tariff Council ofUkraine". TheCustoms Tariff Council is
acollegiate body withtheCabinet ofMinisters. TheResolution oftheCabinet ofMinisters No.343-p
of16May 1994, established thattheSecretariat oftheCustoms Tariff Council beformed under the
State Customs Committee toprovide fororganizational support oftheCouncil operation.WT/ACC/UKR/7
Page 50
Question 13.
Itisstatedinthissection[GeneralDescriptionoftheCustomsTariffStructure]thatcertainimported
products areassessed aspecific oracombined advalorem/specific rateofduty. However, neither
Ukraine 's1993 Harmonized Tariff Schedule now Resolution 258includes reference tospecific or
combined av/specific rates. Please provide alistinHSformat oftheproducts thatfacesuch rates?
Reply 13.
TheLaw ofUkraine "On theUnified Customs Tariff" provides forseasonal customs duties
(Clause 10)andspecial kinds ofcustoms duties (Clauses 11through 15). Atpresent these duties
donotexist. The mechanism ofthecollection ofaseasonal customs duty isbeing developed bythe
Ministry ofAgriculture and Food andthatforcollection ofananti-dumping duty bytheMinistry
ofForeign Economic Relations.
Clause 7oftheLaw ofUkraine "OntheUnified Customs Tariff" authorizes advalorem, specific
andcombined duties. Thespecific and combined customs duties have notbeen established sofar
inpractice.
Question 14.
Please provide clarification ofthestatement inthissection that"seasonal customs taxes may be
established foraperiod notexceeding 4months."
Please provide acomplete listbyHSnumber ofthetariff items thatwere subject toseasonal taxes
in1993 and1994.
How does Ukraine plan tophase-out such actions given itsprospective obligations under the
GATT/WTO?
Reply 14.
TheuseofseasonaldutieswillbeconformedtotheGATT/WTOrequirementsbytheGovernmental
Commission ofImport Regulations. Seasonal duties have notsofarbeen applied.
Question 19.
Theintroduction toUkraine 's1993 Harmonized Tariff Schedule States that"goods imported under
aformal State contract arenotsubject toduty." Please provide further clarification ofthescope of
imports subject tothisexclusion.
Reply 19.
Goods imported intoUkraine willbeexempt from customs duty, provided they aredelivered
under State contracts ororders, which isstipulated bytheDecree oftheCabinet ofMinisters "On
UnifiedCustomsTariff"incompliancewiththeCabinetDecree"OnLiberalizationofForeignEconomic
Activities". Atthesame time, theResolution oftheCabinet ofMinisters No. 932 of
12November 1993, "On theFormation and Distribution ofState Contracts andState Orders in
1994" establishes thatthegoods being imported under State orders areexempt from import duties.
Thelevel ofimports covered bythisprovision forJanuary-August 1994 amounted toapproximately
onebillion US$. TheState contracts covered bythisprovision areonly forgovernment procurement.WT/ACC/UKR/7
Page 51
However, under theProgramme onEconomic Reform, thegovernment contract onexports was
cancelled. Thus, thisexclusion isnolonger inforce.
Question 20.
Theintroduction tothe1993 Harmonized Tariff Schedule States that"therates ofduty forarticles
intended forchildren arereduced by50percent" over thenormal rates ofduty. Please explain the
procedures fordetermining thatgoods areforchildren. Please provide afulllistofthearticles that
would begranted the50percent reduction induties.
Reply 20.
Thelistofproducts intended forchildren forwhich therates ofimport duties arereduced by
50percentascompared with thegeneral customs duty arecontained intheAnnex totheInstructions
"On Taxability ofGoods Imported intoUkraine" approved bytheResolution oftheState Customs
Duty Committee" No.132of31May 1993.
ListofGoods forChildren
_________________________________________________________________________________
Goods HSCode
_________________________________________________________________________________
Special milk forinfants 04.0229110
Homogenized tinned meat 16.0210000
Children 'foodstuffs forretail trade 19.0110000
Homogenized vegetables 20.0510000
Homogenized jams andjellies 20.0710000
20.0710900
Homogenized mixes offoodstuffs 21.0410000
21.0420000
Nappies 48.1840910
48.1849990
Children 'swear 61.01-64.14
Children 'sfootwear 64.01-64.03
_________________________________________________________________________________
Question 22.
Please clarify whether thenew, higher rates specified inResolution 285apply toCIScountries
ornot. Aretheexports ofanyother country exempt from thescope ofthisResolution?
Reply 22.
Thenew, higher rates specified inResolution No.285doapply toCIScountries, inrelation
towhich themost favoured nation regime hasbeen established. Which means thatitapplies toallthe
FSU States except forthecountries with which Ukraine hasFree Trade Regime.WT/ACC/UKR/7
Page 52
Question 23.
Please provide alistofthose products byHStariff lineforwhich exemption from dutyisgranted
asdescribed inthissection [General Description oftheCustoms Tariff Structure]? Does Ukraine grant
these exemptions toimports from allnations?
Reply 23.
International agreements providing forexemptions from Customs duty forallproducts:
1. Agreement between Ukraine andtheRussian Federation onfreetrade (24June 1993).
Goods coming from theRussian Federation areexempt from customs duties.
2. Similar agreement with Belorus (17December 1992).
These exemptions arenotgranted toallnations.
Special Duties
Question 42n.
Please explain ingreater detail Ukraine 'splans toimplement seasonal customs duties, andgive
astatus report onimplementation. What products willbeaffected bythisnewtariff structure? What
levels ofrates arecontemplated andwillsuch rates bebound?
Reply 42n.
There isnofinal decision onimplementation ofseasonal customs duties. Also there isno
mechanism oftheir implementation. Now Ukraine isstudying possibility ofseasonal duties
implementation totheparticular kinds ofagricultural products.
Customs Tariff
Question 52n.
--Reply 19indicates thatimported goods "delivered under State contracts ororders" arenotsubject
tocustoms orimport duties.
Please indicate ifsuch imports arealsoexempted from (a)customs service fees, (b)theVAT
tax,(c)anyspecial orseasonal duties.
Please indicate ifexports under these measures areexempted from export fees.
Reply 52n.
Imported goods delivered under State contracts andState orders, which hadexisted inUkraine
tillthebeginning of1995, were exempted from VAT taxandanyspecial orseasonal duties.
Yes, itdoes. Exports under these measures were exempted from export fees.WT/ACC/UKR/7
Page 53
Question 53n.
Concerning thereply toquestion No.21,please describe thecriteria fordesignating particular
developing countries forpreferential tariff rates andprovide alistofthe145countries currently eligible.
Reply 53n.
LIST OFDEVELOPING COUNTRIES
1.Albania
2.Algeria
3.Anguilla
4.Angola
5.Antigua andBarbuda
6.Argentina
7.Aruba
8.Afghanistan
9.Bahamas Islands
10.Bangladesh
11.Barbados
12.Bahrain
13.Belize
14.Benign
15.Bermuda
16.Bolivia
17.Botswana
18.Brazil
19.British Virgin Islands
20.Brunei Darussalam
21.Burkina Faso
22.Burundi
23.Bhutan
24.Vanuatu
25.Venezuela
26.Vietnam
27.Gabon
28.Haiti
29.Guyana
30.Gambia
31.Ghana
32.Guatemala
33.Guinea
34.Guinea Bissau
35.Honduras
36.Hong Kong
37.Grenada
38.Djibouti
39.Dominica
40.Dominican Republic
41.Ecuador
42.Mali
43.Maldives, Republic of44.Malta
45.Morocco
46.Mexico
47.Micronesia
48.Mozambique
49.Mongolia
50.Montserrat
51.Myanmar
52.Namibia
53.Nauru
54.Nepal
55.Niger
56.Nigeria
57.Netherlands 'Antilles Islands
58.Nicaragua
59.Nide
60.Saint Helen
61.Turks andCaicos Islands
62.United Arab Emirates
63.Oman
64.Pakistan
65.Panama
66.Papua New Guinea
67.Paraguay
68.Peru
69.Rwanda
70.ElSalvador
71.Samoa
72.Saint Thomas
73.Saudi Arabia
74.Swaziland
75.Seychelles
76.Senegal
77.St.Vincent andGrenadine
78.St.Kitts andNavis
79.Saint Lucia
80.Singapore
81.Syria
82.Equatorial Guinea
83.Ethiopia
84.Egypt
85.Zaire
86.ZambiaWT/ACC/UKR/7
Page 54
87.Zimbabwe
88.India
89.Indonesia
90.Iraq
91.Iran
92.Yemen
93.Jordan
94.Cape Verde
95.Caiman Islands
96.Kampuchea
97.Cameroon
98.Qatar
99.Kenya
100. Cyprus
101. Kiribati
102. China
103. Korea, Republic of
104. Columbia
105. Comoro Islands
106. Congo
107. Korea
108. Costa Rica
109. Cote d'Ivoire
110. Cuba
111. Kuwait
112. Cook Islands
113. Laos
114. Lesotho
115. Liberia
116. Lebanon
117. Libya118. Mauritius
119. Mauritania
120. Madagascar
121. Malawi
122. Malaysia
123. Tanzania
124. Togo
125. Tokelau
126. Toga
127. Trinidad andTobago
128. Tuvalu
129. Tunisia
130. Turkey
131. Uganda
132. Uruguay
133. Fiji
134. Philippines
135. Central African Republic
136. Chad
137. Chile
138. Sri-Lanka
139. Jamaica
140. Solomon Islands
141. Somalia
142. Sudan
143. Surinam
144. Sierra Leone
145. Thailand
TheListofDeveloping Countries, which Ukraine grants tariff preferences within theframework
oftheGeneral System ofPreferences, wasapproved bytheDecree oftheCabinet ofMinisters ofUkraine
ofJanuary 1993, No.4-93 "Unified Customs Tariff ofUkraine".
Itisnecessary tounderline thatthislistisanAnnex totheLaw "OnUnified Customs Tariff".
Furthermore, thislistwascompletely taken from theappropriate Law oftheformer USSR anditis
necessary toreview itnow taking intoaccount existing macroeconomic realities anditscomparison
with theUNmethodology.
Import Taxation Regime
Question 54n.
--Concerning exemptions from theapplication ofcustoms tariffs, VAT, andexcise taxes:
Arecustoms tariff charges exempted/rebated forimports physically incorporated orconsumed
intheproduction ofanexported product?WT/ACC/UKR/7
Page 55
Reply 54n.
Import duty imposed onproducts thatarephysically included orconsumed intheprocess of
production ofexported products isnoteliminated orreduced.
Question 55n.
Arecustoms tariff charges exempted/rebated forimported machinery andequipment orother
imports used butnotconsumed intheproduction process forexported products ornotphysically
incorporated intheexported goods? Ifso,thisisconsidered acountervailable subsidy inconsistent with
theprovisions oftheWTO Agreement onSubsidies andCountervailing Measures.
Reply 55n.
Import duty imposed ontheimport ofmachines orother imports thatareused butnotconsumed
orcompletely utilized during theprocess ofproduction ofexported products ornotphysically included
intheexported products, noteliminated andnotreduced. Thedetermination oftheamount ofimport
duty, isnotaffected bythefactwhether these products areconsumed intheprocess ofproduction of
export products.
Question 56n.
AreVAT andexcise taxes exempted/rebated fordomestically produced goods upon exportation?
Reply 56n.
Excise duty andVAT arenotapplied toexports ofUkrainian origin. There arenoanytaxes
orduties atall.
Customs Processing Fee
Question 57n.
Reply 136States thatcurrently, customs feesconsist ofacharge of0.15 percentadvalorem
with aminimum charge ofUS$520.
Please listanyother customs fees thatcanbeapplied toimports orexports forcustoms
processing.
Reply 57n.
Customs processing feeshave been established bytheCustoms Code ofUkraine (Articles 76
and77). Theamount ofthese feeshasbeen specified intheDecree oftheCabinet ofMinisters of
Ukraine of2March 1994, No.133"On theIntroduction ofModifications totheCustoms Duty".
Question 58n.
Ukraine acknowledges thatitscustoms feeisnot,atpresent, inconformity with Article VIII
oftheGATT 1994. How does Ukraine intend toapproach aremedy forthisproblem prior toaccession?WT/ACC/UKR/7
Page 56
Reply 58n.
TheGovernmental Commission onUkraine 'sAccession toGATT/WTO recognizes thatthis
approach contradicts Article VIII GATT 1947. Inthisconnection theGovernmental Commission is
going tomake theappropriate changes inthecurrent legislation.
With theaimtoharmonize Customs Tariff ofUkraine according toArticle VIII GATT 1947
thedraft law"OnIntroducing Changes andAmendments totheLaw ofUkraine "OnUnified Customs
Tariff" wasworked out. This draft lawenvisages theelimination ofcountervailing duty.
Special Duties
Question 15.
Ukraine States that"special duties" may beassessed onimports incertain circumstances,
including assafeguards inthetraditional GATT sense, asanti-dumping measures, ascountervailing
duty measures, andasnational security measures. Could Ukraine provide anexplanation ofhow it
intends toconform these special duties totherequirements oftheGATT/WTO related safeguards,
anti-dumping, countervailing duties, andnational security?
Please provide acomplete listbyHSnumber ofthetariff items thatcurrently aresubject to
"special" duties.
Are"special" duties established forafixed time orindefinitely?
Please further describe thetestthatisused fordetermining "substantial damage toproducers
ofsimilar goods" regarding theapplication ofspecial duties. How isthestatus of"similar" established
inthisprocess?
Reply 15.
Incompliance with theLaw ofUkraine "OnUnified Customs Tariff", irrespective oftheother
types ofcustoms duties, specific types ofcustoms duties areestablished tobeapplied inparticular
cases when commodities aredelivered intheterritory ofUkraine andmoved therefrom. These specific
customs duties include special duties, anti-dumping duties andcountervailing duties.
These special duties willbeassessed onimports incertain circumstances only inthetraditional
GATT/WTO sense andasnational security measures.
The anti-dumping duties aretobeapplied incompliance with Article VIGATT andthe
Anti-Dumping Code oftheUruguay Round.
Thecountervailing duties aretobeapplied inthecases provided forbytheAgreement on
Subsidies andCountervailing Measures.
Themechanism ofapplication ofthegiven types ofspecial duties asasafeguard inthetraditional
GATT/WTO sense does notexist, thisiswhy itisbeing developed bytheCommission onImport
RegulationandtheCommissiononGovernmentalCommissiononAnti-dumpingInvestigationsinRelation
totheExport oftheUkrainian-origin Goods.
None ofthese types ofduties hasbeen applied todate.WT/ACC/UKR/7
Page 57
TheMinistry ofForeign Economic Relations andTrade ofUkraine hasinitiated theanalysis
andtheworking-out oftheappropriate legislation under theArticle VIofGATT 1994. Inorder to
bring thismechanism intoconformity with therules andprinciples ofGATT/WTO theGovernmental
Commission hasbegun towork outtheLaw onSubsidies andtheMechanism ofDomestic Support
forIndustry thatprovide forthemechanism ofcountervailing duties application inaccordance with
theAgreement onSubsidies andCountervailing Measures.
Question 16.
Please describe theinstances when Ukraine hasapplied the"special rates" ofduty described
inthissection asaresponse toanother country 'sattempt "toinitiate unfair competition." HasUkraine
considered thatsuch action should actually behandled under existing orprospective anti-dumping law?
Reply 16.
There arenosuch instances.
"Yes" tothesecond halfofthequestion, under ourprospective anti-dumping law.
Question 21.
Please provide anupdated listofthecountries which benefit from Ukraine 'sspecial rates of
import duty.
Reply 21.
Incompliance with theDecree oftheCabinet ofMinisters "On Unified Customs Tariff" of
11January 1993, forgoods produced incountries which aremembers together withUkraine ofcustoms
unions orforming with itfree-trade areas, andforgoods produced indeveloping countries, except
forthose included inthecommodity groups 25-97,preferential tariff rates areapplied. Forgoods
produced incountries oreconomic unions enjoying most favoured nations status, andforgoods produced
indeveloping countries (incommodity groups 25-97), tariff rates corresponding totherates ofthe
most favoured nations regime inthetraditional GATT/WTO sense areapplied. Forthegoods ofother
countries fulltariff rates areapplied. Atpresent such countries areIsrael andtheRepublic of
South Africa, Slovenia, Taiwan.
Thenumber ofthedeveloping countries is145, thatofcountries thatenjoy themost favoured
nation regime is30plus theFSU States.
Customs Tariff
Question 43n.
Does Ukraine have plans foruseofspecific tariff rates orforcombined advalorem/specific
tariffs, andhow willsuch rates bereflected inUkraine 'sbound tariff rates?
Reply 43n.
Yes, there areplans foruseofspecific tariff rates inUkraine. Thepossibility toimplement
such rates forgoods which have anexcise duty, inparticular, alcohol drinks, tobacco products and
some other goods, isbeing examined.WT/ACC/UKR/7
Page 58
Special Duties
Question 44n.
Please describe theprovisions ofclauses 11-15 oftheLaw "OntheUnified Customs Tariff."
Arethese "special" rates actually authority toapply safeguard measures, anti-dumping duties, and
countervailing charges?
Reply 44n.
Actually, special rates mentioned inclauses 11-15 oftheLaw "OntheUnified Customs Tariff"
authorize application ofsafeguard measures, andanti-dumping andcountervailing duties. Butthis
Law does notprovide themechanism oftheir implementation. With theaimtofillthisgapthe
Presidential Decree "On theApplication ofSafeguard Measures Pursuant tothePrinciples and
Disciplines ofGATT/WTO" isbeing examined bytheGovernment ofUkraine. Thedraft Decree was
worked outonthebasis oftheAgreement onSafeguards GATT 1994.
Safeguard Measures
Question 45n.
Does anyother provision ofUkraine Lawaddress theapplication ofmeasures fortheprotection
ofthebalance ofpayments ortheapplication ofnon-tariff measures forsafeguard purposes ortoaddress
unfair trade practices? Ifso,please (a)citethelaws, decrees, orregulations, and(b)briefly describe
theprovisions.
Reply 45n.
Atthepresent time there isnoanylegislative actinforce determines theimplementation
procedures oftheabove-mentioned measures. However, theGovernmental Commission onUkraine 's
accession toGATT/WTO isworking ontheanalysis concerning theconformity ofthese protective
measures with theUruguay Round Agreements anditisalso working outtheproposals ofthe
Government ontheir implementation. TheLaw ofUkraine onForeign Economic Activity determines
thepossibility oftheprotective measures implementation under above-mentioned circumstances. Any
other additional normative actsdetermines theprocedures oftheimplementation ofsuch measures are
notavailable.
Also seeReply 43n. .
Anti-Dumping andCountervailing Measures
Question 17.
Itisstated inthissection [General Description oftheCustoms Tariff Structure] that"The anti-
dumping duty is,asarule, levied upon theimport ofgoods under theconditions stipulated byArticle
VIoftheGATT ..." Please elaborate onwhat ismeant by"asarule." Arethere instances when
theduty isnotassessed inaccordance with theGATT?
How does theapplication ofUkraine 'sCVD lawrelate toitsfuture GATT/WTO obligations?
Which Government agencies have jurisdiction over theapplication ofUkraine 'santi-dumping
laws?WT/ACC/UKR/7
Page 59
Please describe thepastcases interms ofproduct, supplier, andduty percentage inwhich
Ukraine hasapplied anti-dumping duties.
Reply 17.
Theexpression "asarule" must beconsidered anerroneous oneandbeshould replaced with
"...is levied upon..."
Incompliance with theLaw "OnUnified Customs Tariff", toestablish thefacts allowing the
special anti-dumping andcountervailing duties tolevied, investigations aretobeinitiated. The
investigations aretobecarried outbytheMinistry ofForeign Economic Relations onapplication of
theUkrainian orforeign State institutions, trade enterprises andorganizations, aswellasontheinitiative
oftheCustoms Tariff Council. Proceeding from theresults ofthese investigations theabove-specified
duties canbeapplied.
Also, incompliance with thePresidential Decree "OnMeasures toPrevent theExport ofthe
Ukrainian-origin Goods atprices thatCanbeConsidered Dumping Ones andtoSettle Trade Disputes"
of25August 1994, aGovernmental Commission onAnti-dumping Investigations inRelation tothe
Export oftheUkrainian-origin Goods, which isentrusted with carrying outofinvestigations ofthe
dumping cases andapplication ofprotective sanctions provided forbytheLaws ofUkraine proceeding
from theresults ofanti-dumping investigations. TheCommission hasalsotodraw upandsubmit for
consideration oftheSupreme Rada thedraft laws onbringing theLaws ofUkraine intoconformity
with theGATT regulations concerning anti-dumping procedures.
There have been todate nodumping orcountervailing duty cases inUkraine.
Question 46n.
--Wearepleased tonote thatinorder toprovide fortheprocedural guarantees required by
WTO provisions concerning safeguard measures, anti-dumping duties orcountervailing duties, the
Commissions onImport Regulation andonAnti-dumping Investigations inRelation totheExport of
Ukrainian-origin Goods aredeveloping additional mechanisms toimplement thisaspect oftheWTO
Agreement.
Will private firms have theright tobring cases totheGovernment under thenewmechanisms,
orwillthisright belimited toUkraine andforeign State institutions?
Reply 46n.
Under thenewmechanisms private firms willhave theright tobring cases totheGovernment
ofUkraine.
Question 47n.
Please clarify theroles oftheMinistry ofForeign Economic Relations andtheGovernmental
Commission onAnti-dumping Investigations inRelation totheExport ofUkrainian-origin Goods in
anti-dumping cases. Areboth empowered toconduct investigations, depending onwhether imports
ordomestic goods areinvolved?WT/ACC/UKR/7
Page 60
Reply 47n.
According totheLaw "On Foreign Economic Activity" theMinistry ofForeign Economic
Relations andTrade ofUkraine isresponsible toconduct anti-dumping investigations against goods
originating from foreign countries andtoimplement sanctions onthese goods. Vice versa, the
Governmental Commission onAnti-dumping Investigations, firstofall,isresponsible forconducting
counter-anti-dumping investigations concerning goods ofUkrainian origin against which anti-dumping
investigations areopened.
Question 48n.
--Question 157seeks Ukraine 'sinterpretation ofastatement inL/7499 which stated: "theanti-dumping
duty should exceed thedifference between thegeneral saleprice ofdumping goods intheexporting
country andthedeclared import price, orthedifference between thedumping price oftheexported
good andtheaverage export price ofcompetitive goods ofUkraine origin during acertain period."
--This isnotconsistent with WTO provisions ontheapplication ofdumping duties, which arebased
ondetermination ofacharge equal tothedumping margin.
Reply 48n.
Actually, thisisnotconsistent withWTO provisions oftheapplication ofdumping duties, which
arebased ondetermination ofacharge equal tothedumping margin. There isamistake indocument
WT/L/20. Itshould readthat"Anti-dumping dutyshould notexceed thedifference between thegeneral
selling price ofdumped goods inthecountry ofexport andthedeclared import price".
Question 49n.
What are"competitive goods ofUkraine origin."
Reply 49n.
Term "competitive goods ofUkraine origin" means goods, which bytheir quality andprice
cancompete ontheforeign markets with goods originating from foreign countries.
Question 50n.
CanUkraine confirm thatthisprovision willbeamended bynewlegislation thatimplements
theWTO Anti-dumping Agreement?
Reply 50n.
Yes, Ukraine canconfirm thisstatement.
Question 51n.
--Recognizing thatthese policies may beindevelopment, wewould appreciate, atUkraine 'searliest
convenience, afurther elaboration ofUkraine 'sviews ontheissues raised inquestion 164concerning
theapplication ofcountervailing duties tosubsidized imports, beyond theinformation given inthe
responses toquestions 15,16,and17.WT/ACC/UKR/7
Page 61
--Werequest thatUkraine share itsdraft regulations orlegislation ontheapplication ofsuch measures
with theWTO Members prior toitsfinalization.
Reply 51n.
From theUkrainian point ofview itispremature tosend theappropriate documents toGATT
Secretariat because thework ondraft legislation hasjustbegun. Nevertheless, adraft Presidential
Decree "On Implementation ofSafeguards", draft Presidential Decree "On Safeguards Measures
Concerning Agricultural Producers" andalsothenormative actconcerning safeguards with theaim
toensure balance ofpayments willbesenttotheSecretariat shortly.
Safeguard Measures
Question 18.
Does Ukraine plan topropose anysafeguard measure tocurtail imports?
Reply 18.
Yes. TheGovernmental Commission onImport Regulation isdrawing upaDraft Law on
Import Regime toestablish itinconformity toArticle XIX ofGATT.
TheGovernmentofUkraineisnotgoingtoworkonanyotherlegislativeactsinordertodecrease
imports. The protective anti-import measures will beimplemented only under thecircumstances
stipulated bytheUruguay Round Agreements (Agreement onSafeguard, Anti-dumping Agreement,
Agreement onSubsidies andCountervailing Measures) with aview toensure thebalance ofpayments.
Customs Tariff
Question 24.
Does Ukraine intend tobind allofitsapplied duty-free tariff rates, particularly those onfarm
products?
Reply 24.
Yes, itdoes. However, intheframework ofUkraine 'saccession toGATT/WTO thisissue
willbeasubject forfuture negotiation.
Customs Fee
Question 26.
Given therequirements ofArticle VIII oftheGATT, Ukraine 'scustoms processing feedoes
notappear tobeincompliance with GATT provisions requiring thatsuch feesmust reflect theactual
costofservices rendered foranindividual entry orexport. (See GATT panel onU.S. Customs User
Fee.) How does Ukraine plan toconform itscustoms policies toGATT provisions?WT/ACC/UKR/7
Page 62
Reply 26.
Collection ofcustoms feesrelated totheexecution bytheCustoms oftheir services isprovided
forbytheCustoms FeeCode (Articles 76through 80).Therates ofcustoms feesareestablished by
theResolution oftheCabinet ofMinisters No.133of2April 1994, "OnChanging theCustoms Fees".
Incompliance with Article 77oftheCustoms FeeCode therates ofcustoms feestobepaid
forservices incustoms matters willnotexceed theactual costofthecustoms services.
SeeReply 136.
Import Taxation Regime
Question 25.
Does Ukraine rebate thecustoms taxpaid oninputs thatarenotconsumed intheproduction
ofgoods forexport, such asmachinery andequipment? AreVAT andexcise duties rebated onsuch
inputs aswell?
Reply 25.
TheVAT andexcise duties arenotrebated inthese situations.
Question 27.
Please provide anupdated listofthelegal instruments currently ineffect thatpertain toUkraine 's
import taxation regime, including excise taxes andvalue-added taxes. What istheadministrative
procedure forreview ofvarious types oftaxes?
Reply 27.
TheLaw "On State Budget for1994" No.3898-XII of1February 1994;
TheResolution oftheSupreme Rada "OntheListofGoods (Products) tobeLevied with Excise
Taxes andtheRates ofThese Taxes" No.3951-XII of4February 1994;
TheResolution oftheCabinet ofMinisters No.526of5August 1994, "On Introduction of
Changes totheListofGoods tobeLevied with Excise Taxes andtheRates ofThese Taxes";
TheInstruction "On theProcedure ofEvaluation andPayment oftheVAT andExcise Tax
Levied ontheGoods Imported intoUkraine andExported from It"approved bytheResolution ofthe
State Main Taxation Inspectorate on31May 1994, No.44;
TheInstructions "OnProcedure ofApplying theVAT andExcise Duties onImported Goods",
approved bytheResolution bytheState Customs Committee No.202 of7July 1994.
These Instructions establish thattheVAT iscalculated proceeding from thecustoms valuation
ofimported goods with dueallowance foractually paidcustoms fees, duties andexcise taxes forgoods
subject toexcise taxation.WT/ACC/UKR/7
Page 63
Question 28.
Please provide updated information onUkraine 'svalue-added taxstructure. Isthevalue-added
taxapplied onanon-discriminatory basis forboth domestically produced andimported goods? Are
there anyexceptions inapplication forpreferential orother trade?
Isthe28percent VAT taxcollected only onimports? What level ofVAT iscollected on
domestic goods? IstheVAT assessed ontheimport price only, orontheduty imposed aswell?
Isthevalue added taxapplied toallfood andagricultural products? What isthereason for
theVAT onfood imports? When willtheVAT bereduced?
Reply 28.
TheVAT isapplied onanon-discriminatory basis toboth domestically produced andimported
goods.
Also, seeReply 27.
TheVAT isapplied toallfood andagricultural products.
Incompliance with theprogramme ofreforms theVAT willbereduced forallproducts (to
20percent) starting from thebeginning of1995. TheVAT isapplied tothecostofthegoods plus
theduty.
Question 29.
Thedescription ofthe17March 1994 Decree onAdditional Measures toStabilize theFinancial
Position ofEnterprises exempts from theVAT: imports ofrawmaterials, intermediate goods andother
goods used inindustrial oragricultural production. Please confirm fortherecord thatthisdescription
isfully accurate.
Reply 29.
This Decree exempts from theVAT theimport ofrawmaterials, assembly units andparts of
theequipment imported byresidents fortheir production demands. Itwas made effective on
1April 1994. Italso extends toenergy carriers (oil, oilproducts, gas) andmaterial resources for
agricultural product processing.
This description isfully accurate.
Question 30.
Please provide information onUkraine 'sexcise taxstructure, including alistbyHSnumber
andtaxrateapplied totheproducts subject toexcise taxes.
Arethese taxes applied inallinstances inanon-discriminatory fashion onboth domestically
produced andimported goods? Ifnot,which excise taxes areapplied only toimports?
Dotheexcise taxes apply totheimports ofCIScountries orpreferential trading partners?WT/ACC/UKR/7
Page 64
Reply 30.
Thegoods being imported toUkraine arelevied with excise duty atrates approved bythe
Resolution oftheSupreme Rada ofUkraine No.3951/12 of4February 1994, "OntheListoftheGoods
toWhichApplyExciseDutiesandTheirRates".Thislistincludesthesubsequentamendmentsintroduced
thereto bytheResolution oftheCabinet ofMinisters No.526of5August 1994.
Incompliance with thelegal actsabove excise duties have been applied inadiscriminatory
manner toimported goods toprotect theinterests ofdomestic producers.
Allowing fortheGATT/WTO principles andrules andintheframework oftheprogramme
ofreforms coordinated with theWorld Bank, starting from thebeginning of1995 theexcise duties
willbeequal forboth domestic andimported goods.
Thegoods subject toexcise duties include:
- alcoholic drinks (HSnumbers: 2207, 2208, 2204, 2205, 2203, 2206);
- food essences (2101, 2209);
- chocolate (1806);
- coffee (0901);
- delicacies ofthemeat andseaproducts (16010091, 16042010, 16042030, 16051000,
16052000);
- sugar (1701);
- tobacco products (24022000, 24009000, 24031000);
- video hardware andtelevision sets (85281011, 85281019, 85281030, 85281090,
85282010,85282071, 85282073, 85282079, 852820900;
- car,buses andtrucks (8703);
- tires (401110000);
- jewellery (7113);
- porcelain (69131000);
- cutglass products (70139910, 70133991);
- furproducts (4302, 4303, 6506, 9200);
- natural leather andtheproducts thereof (41004-4109, 4203);
- carpets (5701, 5702, apart from 57021000);
- microwave electrical furnaces (851420910);WT/ACC/UKR/7
Page 65
- kitchenware made from metals coated with silver andgold (8215, 8603 21000).
Yes, theexcise taxes apply totheimports ofCIScountries andpreferential trading partners.
Question 31.
What indirect domestic taxes other than theVAT andtheexcise taxareapplied toimports?
Reply 31.
There arenoother such taxes.
Question 32.
Please explain Ukraine 'sreasons formaintaining substantial taxes onimported processed and
unprocessed agricultural products. IsUkraine prepared toeliminate these taxes upon GATT accession
orapply them equally todomestic production?
Reply 32.
Such substantial taxes areapplied inorder toprotect domestic producers andreduce theState
budget deficit. Intheframework oftheimplementation oftheprogramme ofeconomic reforms
coordinated with theIMF andWorld Bank andoftheUkraine 'saccession totheGATT/WTO, during
1995 these taxes willbemade equal forboth domestic andforeign producers.
Question 60.
Does Ukraine 'staxation regime assess rates forforeign-owned establishments higher than
Ukraine-owned firms?
Reply 60.
No.Moreover, foreign investors aregranted preferential taxation terms incompliance with
theLaws ofUkraine (Decree oftheCabinet ofMinisters "On Foreign Investments Regime" of
20May 1993, No. 55-93, Law ofUkraine "On theState Programme ofPromotion ofForeign
Investments" of19December 1993, Resolution oftheCabinet ofMinisters ofUkraine "OnMeasures
toImplement theLaw ofUkraine ontheState Programme ofPromotion ofForeign Investments" of
31March 1994, No.203).
Question 59n.
Concerning taxation ofimports andthereplies toquestions 27-29:
HastheVAT been reduced to20percent?
Reply 59n.
Concerning thequestion onvalue-added tax:from 1January 1995 theVAT hasbeen reduced
to20percent, bothonimported anddomestic products, including food andagricultural products, except
those which aresold byagricultural producers according toState procurement andcontracts. Such
goods aretax-free from 6October 1994, according totheResolution oftheSupreme Rada ofUkraine
No.223/94-BP, dated 21October 1994.WT/ACC/UKR/7
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Question 60n.
Why does Ukraine apply theVAT toallfood andagricultural products. Will thisapplication
beeliminated orreduced?
Reply 60n.
Itisnecessary tomention thatthere arenofurther plans toreduce thevalue-added taxonfood
andagricultural products because ofthefollowing:
- duetothefactthatsuch products areconsumed byvarious social groups, government
support tocitizens with lowincomes should berendered notthrough taxreduction but
through special purpose ordirected subsidies;
- itwould complicate thesystem ofvalue-added taxation, andasaresult itwould
considerably increase theadministrative expenditures;
- areduction intaxwillnotnecessarily lead toprice reduction onsuch products;
- thetotal revenue from thereduced level oftaxes willnotbesufficient tocover tax
rebates paid tosuppliers forrawmaterials, etc.
Besides,Ukraineapplies20percentVATtoallfoodandagriculturalproducts.Thisapplication
willnotbeeliminated orreduced. With theaimtocreate balanced State budget for1995 20percent
VAT isapplied toallfood andagricultural products. VAT isoneofthemain types ofbudget incomes
for1995 andcomprises about 10percent from thetotal revenue, envisaged bytheState budget of
Ukraine according totheLaw "On theState Budget ofUkraine for1995".
Question 61n.
AretheVAT exemptions fortheimports listed inreply No.29available toforeign aswell
asUkrainian-owned firms?
Reply 61n.
VAT exemptions, mentioned inReply 29inDocument WT/L/20 areavailable toforeign as
well astoUkrainian-owned firms.
Question 62n.
--Replies 30-32 and61indicates thatUkraine 'sexcise taxisapplied inadiscriminatory fashion,
i.e., atahigher rateoncertain imports than onthedomestic product. Reply 30States thatUkraine
intends tounify therates atthebeginning of1995, butreply 32says "during 1995."
Hasthediscriminatory element oftheexcise taxbeen eliminated? Ifnot,when does Ukraine
intend toalter oreliminate thetaxtobring itintoconformity with Article IIIofGATT 1994?
Reply 62n.
According toclause 28oftheLawofUkraine "OntheState Budget ofUkraine for1994" import
excise duty isapplied according tothecustoms value ofgoods together with other customs feesattheWT/ACC/UKR/7
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time goods gothrough aUkrainian customs border, butnotattime oftheir final sale. However,
excise duty forgoods ofUkrainian origin iscalculated according totheir selling price.
Theexcise onimported anddomestic products iscalculated differently inconformity with the
current legislation ofUkraine. When calculating theamount ofexcise, thetaxed turnover onimported
products isdetermined according tothecustoms value ofproducts, calculated inUkrainian currency
according totheexchange ratesetbytheNational Bank ofUkraine, taking intoaccount thetotal of
taxandcustoms duties. Thetaxed turnover ondomestic products iscalculated onthewholesale price
ofproducts, taking intoconsideration theexcise. Thus, when theexcise onimported cigarettes is
100percent, asprovided forbythedraft Ukrainian Law "On theSchedule ofGoods (Products) on
which Excise isLevied andtheRates ofExcise" which wasadopted bytheSupreme Rada ofUkraine
during thefirstreading on26April 1995, theexcise partofthesaleprice willamount to30percent
andondomestic cigarettes -atanexcise 40percent, theexcise partwillbe27percent.
Takingtheabove-mentionedintoaccounttheamountsoftaxonanalogousdomesticandimported
products areapproximately equal, when current rates ofexcise areapplied.
Taking intoaccount principles anddisciplines oftheGATT/WTO concerning excise duty rates
unification forallgoods irrespective oftheir origin, there isarecommendation totheCommission
onFinances andBanking oftheSupreme Rada ofUkraine tochange thedraft Law "On theListof
Goods under Excise andExcise Duty Rates" substantially. This Law should provide forequal tax
basis andexcise duty unification.
Question 63n.
Does Ukraine intend toreduce thelevel oftaxation onimported agricultural products?
Reply 63n.
There isnoexcise onimported agricultural products inUkraine.
TheGovernment ofUkraine does notplan toreduce thelevel ofimport duty ofagricultural
products.
Areduction inVAT onagricultural produce isnotbeing planned forthenear future.
Question 64n.
Will theincidence ofanequalized excise taxbehigher thanorthesame asthecurrent domestic
rateof10percent?
Reply 64n.
According tothecurrent legislation there isnocurrent domestic 10percentexcise taxongoods
ofUkrainian origin.
Thegoods being imported toUkraine arelevied with excise duty atrates approved bythe
Resolution oftheSupreme Rada ofUkraine No.3951/12 of4February 1994, "OntheListoftheGoods
toWhichApplyExciseDutiesandTheirRates".Thislistincludesthesubsequentamendmentsintroduced
thereto bytheResolution oftheCabinet ofMinisters No.526of5August 1994.
Thegoods subject toexcise duties include:WT/ACC/UKR/7
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- alcoholic drinks (HSnumbers: 2207, 2208, 2204, 2205, 2203, 2206);
- food essences (2101, 2209);
- chocolate (1806);
- coffee (0901);
- delicacies ofthemeat andseaproducts (16010091, 16042010, 16042030, 16051000,
16052000);
- sugar (1701);
- tobacco products (24022000, 24009000, 24031000);
- video hardware andtelevision sets (85281011, 85281019, 85281030, 85281090,
85282010,85282071, 85282073, 85282079, 852820900;
- car,buses andtrucks (8703);
- tires (401110000);
- jewellery (7113);
- porcelain (69131000);
- cutglass products (70139910, 70133991);
- furproducts (4302, 4303, 6506, 9200);
- natural leather andtheproducts thereof (41004-4109, 4203);
- carpets (5701, 5702, apart from 57021000);
- microwave electrical furnaces (851420910);
- kitchenware made from metals coated with silver andgold (8215, 8603 21000).
According totheabove-mentioned normative actsthere isanexcise duty rate, which differs
from other rates foreach ofthementioned goods. Taking thisstatement intoaccount thedefinition
of10percentrateasacurrent domestic rateisnotright. Asarule, theexcise duty rateforgoods
ofUkrainian origin ishigher than 10percent.
Also seeReply 62n. ,paragraph 5.
Question 65n.
Please provide acurrent listofallitems, buttariff lineitem numbers, subject tothetaxand
thelevel ofapplication fordomestic andimported articles.WT/ACC/UKR/7
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Reply 65n.
SeetheResolution oftheSupreme Rada ofUkraine No.3951/12 of4February 1994, "On
theListoftheGoods toWhich Apply Excise Duties andTheir Rates". Resolution oftheCabinet of
Ministers No.526of5August 1994 andtheDocument L/7855.
Question 66n.
Atwhat point ofsaleisthetaxapplied toimported anddomestic articles? What isthetaxable
basis ofitsapplication?
Reply 66n.
SeeReply 62n.
Customs Valuation
Question 33.
Please complete thequestionnaire ontheapplication oftheCustoms Valuation Agreement
contained inVAL/2/Rev.2, "Information onImplementation andAdministration oftheAgreement."
What partofUkraine 'scustoms valuation practices donotconform totherequirement oftheCustoms
Valuation Code?
Reply 33.
Customs valuation issubject totherequirements ofArticle 16oftheLaw "On theUnified
Customs Tariff ".Theorder ofcustoms evaluation conforms totherules ofArticle VIIofGATT.
Atpresent theState Customs Committee ofUkraine hasdrawn upadraft lawoncustoms
valuation onthebasis oftheCustoms Valuation Agreement oftheUruguay Round. Answers tothe
questionnaire willbeprovided shortly.
Question 67n.
Reply 171appears toindicate thatUkraine uses prices ofsimilar goods tovalue itsimports.
This isnotconsistent with thehierarchy ofmethods used inobservance oftheWTO Agreement on
Customs Valuation.
What isthestatus ofUkraine 'sefforts toinstitute anew customs valuation law?
Welook forward toreviewing Ukraine 'sdraft lawoncustoms valuation andthecompleted
questionnaire ontheimplementation oftheAgreement onCustoms Valuation.
Reply 67n.
Based onArticle VIIofGATT andtheCustoms Valuation Code, theState Customs Committee
ofUkraine hasprepared adraft Decree oftheCabinet ofMinisters ofUkraine "Procedure oftheCustoms
Valuation ofGoods which areImported intoUkrainian Territory". Theabove-mentioned draft has
been submitted totheministries andother State organizations forapproval.WT/ACC/UKR/7
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Customs Processing Fee
Question 34.
PleaseexplainUkraine'sreasonsforrequiringpaymentinconvertiblecurrenciesbynonresidents.
Under what circumstances might such arequirement topayduties inconvertible currency benecessary?
Reply 34.
Incompliance with theResolution oftheCabinet ofMinisters ofUkraine "On Introduction
ofChanges toCustoms FeeRates" No.133of2March 1994, customs feesforcustoms services are
setinabsolute units inUSD. This measure wasadopted because ofthehigh inflation rateandfast
variation incustoms feesrates tocope with theinflation rate. After stabilization ofnational currency
thismeasure willbeeliminated.
Incompliance with Article 3,Clause 1oftheResolution oftheCabinet ofMinisters No.15-93
of19February 1993, "On theSystem ofCurrency Regulation andCurrency Control", thenational
currency ofUkraine istheonly legitimate means ofpayment intheterritory ofUkraine. Incompliance
with Article 17oftheLaw ofUkraine "On Unified Customs Tariff" andtheDecree oftheCabinet
ofMinisters No.4-93 of11January 1993, thecustoms duties levied bythecustoms should bepaid
inthenational currency ofUkraine.
Non-Tariff Measures, Quotas andLicensing Regime
Question 35.
Please confirm thattheMinistry ofForeign Economic Relations inconjunction withtheCabinet
ofMinisters ofUkraine hasthesoleauthority fordetermining, maintaining andmodifying Ukraine 's
quota andlicensing regime.
Reply 35.
TheDecree oftheCabinet ofMinisters "On Setting Quotas forandLicensing ofGoods and
Services" of12January 1993, No.6-93 establishes thatthequotas andlicensing regime besetand
maintained bytheCabinet ofMinisters onpresentation oftheMinistry ofEconomics which should
specify thelistsofparticular goods/services subject toquotas andlicensing andtheterm ofitsvalidity.
Incompliance with theResolution oftheCabinet ofMinisters No.734of24October 1994,
"OnLiberalization ofExport Operations", inorder toimplement particular provisions oftheReport
oftheUkrainian President "OnPrimary Directions oftheEconomic andSocial Policy" approved by
theSupreme Rada ofUkraine, starting from 1November 1994, thefollowing willbesubject toquotas
andlicensing:
-grains;
-coal;
-wastes offerrous metals;
-pigcastiron.
Incompliance withtheprogramme ofeconomic reforms, in1995 quotas andlicences forexport
ofgoods willbeeliminated. Atpresent thelicences forexport aregranted bytheMinistry ofForeign
Economic Relations.WT/ACC/UKR/7
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Question 36.
Itisstated inthissection [Non-tariff measures, quotas andlicensing system] thatResolution 146
terminated thelistofgoods subject toimport licences orquotas andthatcurrently noimports aresubject
tolicences orquotas. Isthisunderstanding correct? Ifnot,please provide acomplete listbyHStariff
lineofproducts thatcurrently aresubject toimport quotas orimport licensing.
Reply 36.
Decision oftheCabinet ofMinisters, No.1046 of7December 1993, contained thelistofgoods
subject toexport/import quotas andlicensing in1994. However, thedecision oftheCabinet ofMinisters,
No.146of4March 1994, "On Amendments totheDecision No.1046 oftheCabinet ofMinisters
dated 17December 1993, cancelled theimplementation ofAnnex 3ofDecision No.1046, which listed
thegoods subject toquotas andlicensing in1994. Atpresent noimport quotas areapplied.
In1995, theprogramme foreconomic transformation oftheagricultural sector wasapproved,
which provides fortheprivatization of724State farms which areState property, andalso 1,960
processing, agricultural service enterprises, andconstruction enterprises.
Theplans forprivatization, which aremade according toresources available, areapproved
annually bytheSupreme Rada ofUkraine annually.
Question 37.
Please explain indetail theprocedures forsetting import quotas andupdate thelistoflegal
instruments andauthorities.
How arepresent quotas allocated?
What plans does Ukraine have foreliminating these quotas andending thepolicy ofusing quotas
toprotect home industry, inasmuch asthisviolates GATT?
Reply 37.
ThePresidential Decree "OntheMeasures toImplement anIntegrated State Policy ofImport
Regulation" of21September 1994, established aspecial Governmental Commission toregulate import
matters. Itisentrusted with thedevelopment andimplementation ofthemechanism ofapplication of
import restrictions inconformity totheGATT/WTO principles andrules. Atpresent, theCommission
isdrawing upadraft lawwhich provides foramechanism allowing fornon-tariff import regulation
tobeeffected incompliance with Article XIX ofGATT.
Atpresent there arenoimport quotas.
Question 38.
Please provide acomplete listbyHSnumber oftheproduct thatcurrently aresubject toprior
import approval requirements. Which products require mandatory import licences?
Reply 38.
SeeReply 36.WT/ACC/UKR/7
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Question 39.
Does Ukraine apply anylicences toimports foranyreason? Would Ukraine please complete
the"Questionnaire onImport Licensing Procedures" contained inL/5640/Rev.10?
Reply 39.
Incompliance with Article 18oftheLaw "On Foreign Economic Activities", theimport of
only those goods thathave such technical, pharmaceutical, phytosanitary andecological parameters
which meet therequirements ofUkrainian standards ispermitted. Also, theimport inandtransit through
theUkrainian territory ofsecondary rawmaterials issubject tolicences. Pursuant totheResolution
oftheCabinet ofMinisters No.117ofFebruary 1994, thegranting oftheimport ortransit permit
isentrusted totheMinistry ofNature andEnvironmental Protection.
SeeReply 36.
Thequestionnaire willbeanswered shortly.
Rules ofOrigin
Question 40.
Forprocessed goods, twocriteria arelisted inthissection: (1)change oftariff classification
and(2)50percentormore value-added. Ismeeting oneofthese tests alone sufficient, ormust both
bemet?
Reply 40.
One ofthecriteria issufficient.
Question 41.
What ismeant bythestatement "goods safety during their transportation orstorage"?
Reply 41.
Itmeans such alevel ofprotection which brings about nodamage togoods inbothtransportation
andstorage. Theprotection ofsafety ofgoods willnotbeconsidered assubstantial transformation.
Non-Tariff Measures, Quotas andLicensing Regime
Question 68n.
Responses toquestions 35-38 indicate thatUkraine doesnotatpresent apply quotas orrestrictive
licensing requirements toimports.
Wehave seen reports, however, thatimport licensing requirements remain ineffect onimports
ofcastiron wastes, steel andplastic production, pharmaceutical, veterinary materials, fertilizers,
cosmetics andpersonal hygiene products. Could theUkrainian delegation address this?WT/ACC/UKR/7
Page 73
Reply 68n.
These requirements arestillineffect with theview toprotect peoples 'andanimals 'health and
with theview ofenvironmental protection.
Question 69n.
CanUkraine confirm thatitstillapplies noimport quotas forgrains?
Reply 69n.
Yes. Ukraine does notapply import quotas forgrains.
2. Export Regulation
Question 70n.
--Responses toquestions 35-38, 50,288, 331, and351indicate thatexport quotas remain ongrains,
coal, wastes offerrous metals, andpigcastiron, butthatthey were slated tobeeliminated in1995.
Aresuch export restrictions stillinplace? Ifso,arethequota quantities published, andhow
areexport quotas andorlicences administered?
Reply 70n.
Thefollowing products aresubject toexport licensing:
Grains 1001-1008 (except for1008.3.0000)
Precious metals (7112) andwastes ofprecious andnon-ferrous metals.
Question 71n.
Arethere other products whose export islimited atthepresent time? Explain further Ukraine 's
plans forabolishing export quotas andlicences ifthisisnotalready done.
Reply 71n.
Grain export restrictions should beeliminated insummer 1995 according totheProgramme
ofEconomic Policy oftheGovernment ofUkraine for1995.
Also seeReply 70n. .
Question 72n.
Reply 335indicates that"voluntary export restrictions" remain inplace aswell.
Please indicate what measures thisrefers toandthesteps envisioned toassure consistency with
theSafeguards Agreement.WT/ACC/UKR/7
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Reply 72n.
Asitwasmentioned inReply 335Document WT/L/20 "voluntary export restrictions" arestill
ineffect intrade between Ukraine andtheEU(theAgreement onTrade Textiles between Ukraine
andtheEU, theAgreement onTrade inSteel between theEUandUkraine, theAgreement onTrade
inTextilesbetweentheUnitedStatesandUkrainecategory435)andtheAgreementonExportRestriction
onFerrosilikon Manganese totheUnited States").
Ukraine considers thatitwill bevery useful tostart consultations with theEUandthe
United States concerning these agreements totransform them according totheAgreement onSafeguards
requirements.
Agricultural Policies
Question 73n.
Reply 39States thatUkraine applies sanitary andphytosanitary requirements, standards, and
restrictions ontransit for"secondary" rawmaterials onimports.
How arethese restrictions administered? Inparticular, wewould appreciate more detail on
"secondary" rawmaterials imports astheyrelate toagricultural imports. IsUkraine 'slicensing system
consistent with theprovisions oftheAgreement onImport Licensing Procedures?
Reply 73n.
TheRegulation oftheCabinet ofMinisters ofUkraine No117of22February 1994 defined
some substances andmaterials asdangerous. They aresubject toobligatory import andtransit licensing.
(The ListofSubstances andtheRegulation onGranting Permission toImport these Materials intothe
Territory ofUkraine areenclosed).
FromtheUkrainianpointofview,Ukraine'slicensingsystemisconsistentwiththeGATT/WTO
provisions concerning people 'sandanimal 'shealth protection andalsoenvironmental protection.
Question 74n.
Welook forward toreceiving Ukraine 'sresponse tothequestionnaire onimplementation of
theAgreement.
Reply 74n.
Ukraine sentitsresponses tothequestionnaire onimplementation oftheAgreement.
Rules ofOrigin
Question 42.
Upon accession totheGATT/WTO, Ukraine willhave toadhere totheAgreement onRules
ofOrigin andapply itsprecepts andguidelines. What steps does Ukraine anticipate willbenecessary
totake toward meeting these obligations?WT/ACC/UKR/7
Page 75
Reply 42.
TheUkrainian Government, intheframework ofeconomic reforms carried outinUkraine, will
take every measure toimplement alltheagreements oftheUruguay Round intonational legislation
sothattheforeign trade regime could beharmonized with GATT principles andrules.
CurrentlytheGovernmentalCommissionsonImportRegimeRegulationandUkraine'sAccession
toGATT have initiated thework onthepreparation ofadraft lawonbringing therules oforigin into
conformity with theUruguay Round Agreement onRules ofOrigin.
Question 75n.
Please clarify theresponse toquestion 40.Two methods ofdetermining theorigin ofimports
arelisted.
When isthechange ofclassification textused, andwhen isthepercentage ofvalue testused?
Reply 75n.
Thevalue added testisused when thegoods donotchange their classification category. The
value added testisnotused when goods areclassified under atariff category other than thematerials
orgoods used during theprocess ofthese goods.
Question 76n.
Isthepercentage ofvalue textonly employed iftheproduct hasnotchanged itsclassification
category, orarethere specific products forwhich thepercentage ofvalue testisrequired, regardless
oftariff classification change?
Reply 76n.
There arenospecific goods, forwhich thevalue added testisused despite changes intariff
classification, defined bythelegislation ofUkraine.
Question 77n.
Reply 42addresses application ofrules oforigin. Ukraine hasindicated thatitsimplementation
oftheAgreement onRules ofOrigin willbeaccomplished bylegislation. Wehope toreview thedraft
before itisfinalized.
Reply 77n.
Ukraine hasjuststarted theprocedure ofimplementation oftheAgreement onRules ofOrigin.
Also Ukraine would liketoconfirm itsintention tosend thePreliminary Working Draft oftheLaw
totheGATT Secretariat assoon asthedraft willbeready.
Standards andCertification
Question 43.
Please describe anyborder measures other than custom duties thatUkraine maintains aswell
astheproducts covered bythese restrictions.WT/ACC/UKR/7
Page 76
Reply 43.
Incompliance with theLaws ofUkraine, products tobeimported andcertified inUkraine
iftheymeet Ukrainian standards, shall beprovided with anobligatory certificate showing compliance
withtherequirements ofthestandards ofUkraine astosafety relating tolife,health, property ofcitizens
andenvironmental protection. This certificate shall beapproved byanauthorized certification body
ofUkraine designated bytheState Standards Committee foreach branch ofindustry. "The listof
products required tobecertified inUkraine hasbeen senttotrade representatives andembassies of
Ukraine" Thelistisnotyetcomplete, butcovers metal working machinery, synthetic fibres, toys.
Allstandards arepublished andarepublicly available. Plans fordeveloping standards arecirculated
torelevant ministries andareavailable upon request.
TheLaws ofUkraine establish thatthecertification isamust forproducts forwhich the
standards exist applying requirements regarding safety oflife, people 'shealth andtheir property as
well asenvironmental protection.
The lists ofproducts subject tocertification inUkraine aretobeapproved bytheState
Standardization Body acting asaNational Certification Body and, then, registered bytheMinistry
ofJustice. Thecertification ofproducts included inthelistsapplies tosimilar import products. The
main certification regulations areasfollows:
1. Toeffect thecertification oftheproduct intheUkrCEPRO (State Certification System) system,
anapplicant (aforeign oneincluded) must submit anapplication indueform toanaccredited body
(ifforeign organizations have norequisites oftheabove certification body itmayaddress theNational
Certification Agency).
2. Thecertification body will, nolatter than onemonth after thereceipt oftheapplication, let
theapplicant know about itsdecision thatmust specify thefollowing certification conditions:
2.1. The name andsign ofastandard therequirements ofwhich must bemetbythe
applicant 'sproducts;
2.2. Selection, together with theapplicant, ofaparticular manner (model) ofcertification.
2.3. Selection ofthetestlabtotestproducts; samples.
2.4. Selection ofanorganization tosupervise theproduction ofcertified goods (ifrequired
to,andif"yes", technical supervision willbecarried outincompliance withtheselected manner
(model).
3. Solely thecertification body hastheright togrant theconformance certificate.
4. Theconformance certificates issued byforeign organizations canberecognized valid solely
anddirectly bycertification bodies accredited intheUkrCEPRO system.
These foreign conformance certificates canberecognized valid proceeding from theresults
oftests carried outintestlabsaccredited intheabove system.
TheMEC ,ICOstandardsand18900GOSTs(CISInterStatesStandards)areeffectiveinUkraine
now. Approximately 40percent ofthem areharmonized with theinternational standards. Some
60percent ofthestandards drawn upandadopted inUkraine areharmonized with international
standards.WT/ACC/UKR/7
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Products tobecertified intheUkrCEPRO system
1. Household andsimilar electrical hardware, assembly units andparts.
2. Lighting appliances, assembly units andparts.
3. Manual electromechanical tools andportable worktables.
4. Video-, television anddisplay sets.
5. Household radio electronics.
6. Electrically-driven construction-and-assembly tools.
7. Food processing equipment.
8. Medical equipment.
9. Toys.
10. Synthetic detergents.
11. Miniature tractors andpowered equipment.
12. Engines oftractors andagricultural machinery.
13. Metal-and-wood machining equipment.
14. Electrical welding equipment.
15. Electrical machines.
16. Bicycles, prams.
17. Security andfirealarm systems.
18. Telephone sets.
19. Cinema andphoto equipment.
20. Kitchenware made from ferrous andnon-ferrous metals, faience andporcelain.
21. Units ofautomation andmechanization ofaccounting operations.
22. Household mechanisms operating onsolid, gaseous andliquid fuel.
23. Road vehicles.
24. Agricultural machinery.
25. Inflammable electrical, equipment intended foritsoperation andrepair.WT/ACC/UKR/7
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26. Light sources.
27. Textiles forchildren.
28. Food industry products.
29. Photography chemicals.
30. Petroleum products.
Agricultural Policies
Question 44.
Areanyproduct agricultural inparticular highly restricted orbanned? Please provide the
justification forthebanoneach item.
Reply 44.
Thenational system ofstandards andcertification ofUkraine does notprovide forabanor
limitation ontheuseofanyproducts ifthey meet current requirements ofstandards astosafety for
life,health andenvironmental protection. There arecurrently nohighly restricted orbanned agricultural
products.
Standards andCertification
Question 45.
Could Ukraine complete thequestionnaire onstandards practices contained inTBT/16/Rev?
Reply 45.
Answers tothequestionnaire willbeprovided shortly.
Question 46.
Arethestandards andcertification requirements applied toimported products alsorequired
ofdomestic goods?
Reply 46.
Requirements astostandards andcertification ofimports donotdiffer from therequirements
fordomestic products.
Question 47.
Which ofthegovernment bodies listed inthissection would serve asacentral point forthe
purposes ofthecollection andnotification tointernational bodies ofstandards andthehandling of
inquiries? Please describe themechanisms thatexist orareanticipated toenable foreign participation
andcomments onstandards thatareunder development.WT/ACC/UKR/7
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Reply 47.
AUkrainian Information Centre ofStandards, Certification andTechnical Barriers toTrade
shall becreated onthebase oftheNational Fund ofStandards.
Foreign organizations may, ifagreed upon with theState Committee ofUkraine for
Standardization, Metrology andCertification, takepartinthedevelopment ofthestandards ofUkraine
ifthey aremembers oftechnical committees onstandards. Any foreign organization may become a
memberoftheUkrainianTechnicalCommitteeonStandardization.Todosoitmustsubmitanapplication
totheTechnical Committee forconsideration which will, then, present ittotheState Committee for
Standardization, Metrology andCertification forapproval.
Question 78n.
--Ukraine States intheresponse toquestion No.43that"foreign conformance certificates canbe
recognized valid" only ifissued bytestlabsaccredited intheUkrCEPRO system, anddiscusses the
level ofharmonization ofitsstandards with international norms.
Areanyforeign certification bodies recognized byUkrCEPRO atthistime? Ifso,please indicate
who they are.
Reply 78n.
Yes, asamember oftheInternational Electrotechnical Commission, Ukraine joined the
International system ofassessment oftheresults ofelectrical equipment testing anditsconformity with
standards forsafety. Ukraine acknowledges theresults oftests made bytesting laboratories accredited
inthissystem andacknowledges certificates issued bytheauthorized bodies ofthemember-countries
ofthissystem (Germany, Hungary, Italy andothers). FortheFederal Republic ofGermany the
certification body DIN GOST TUV Berlin-Brandenburg hasbeen accredited within theUkrainian
certification system UkrCEPRO. Thedrafts oftreaties oncooperation between Ukraine andGermany
('TUV-Reilands" and"TUV-Nord"), Ukraine andFrance (Bureau VERITAS group), areunder
consideration now bytheState Standards Committee.
Onthebasis ofmutual bilateral agreements Ukraine acknowledges thenational certification
systems ofallCIScountries, their certification bodies andtesting laboratories accredited inthese systems
andtheir certificates.
TheState Committee ofUkraine forStandardization, Metrology andCertification asanational
body forstandardization accomplishes measures todevelop international cooperation instandardization
andcertification. Thus, there hasbeen developed:
- theagreements oncooperation withtheAmerican National Standards Institute (ANSI),
NationalInstituteofStandardizationNIST),GermanInstituteforStandardization(DIN);
- inNovember 1994 "The Project onCanada 'stechnical assistance inthedevelopment
ofthenationalstandardizationandcertificationsystemofUkraineandtheharmonization
ofthenational standards ofUkraine with Canadian standards" andtheproject of"The
Agreement onCooperation with Standardization Council ofCanada" have been sent
totheMinistry ofForeign Affairs andInternational Trade andMinistry ofIndustry
ofCanada.Thesedocumentsprovideforthedevelopmentofthejointrules,inparticular,
regarding theharmonization oftherequirements oftheCanadian andUkrainian
certification systems;WT/ACC/UKR/7
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- thedraft Agreement onCooperation inthefield ofquality certification conformity
assessments were senttothenational certification bodies ofIsrael, Poland andCuba;
- theproposals from Bulgaria, Czech Republic andSlovakia astomutual recognition
ofnational certification systems areunder consideration now.
Question 79n.
When isUkraine planning toharmonize itsremaining standards with international standards?
Please clarify whether atthistime 40percent or60percent ofUkraine standards areharmonized
with international standards.
Reply 79n.
Theinter-State standards oftheCIScountries (GOST) andthenational Ukrainian standards
(DSTU) arevalid inUkraine. About 40percentofinter-State standards (GOST) areharmonized with
international standards. 60percent oftheNational Standards ofUkraine DSTU) which have been
approved bytheUkrainian State Committee forStandardization, Metrology and Certification
(Derzhstandart ofUkraine) areharmonized with international standards.
Theimplementation ofInternational Organizations 'standards isbeing carried outinUkraine
bydevelopingnationalstandardsonthebasisoftheinternationalstandards.ThedevelopmentofNational
Standards ofUkraine which aretobeharmonized with ISOstandards isbeing encouraged through
budgeting forthiswork.
However theharmonization ofNational Standards ofUkraine with international standards is
being performed along with thespecific conditions ofsocial, economic andtechnical development of
Ukraine. That iswhy some requirements ofinternational standards, testing procedures andseparate
technological processes failed tobeimplemented todate. Toimplement them Ukraine needs technical
andmethodological help.
Question 80n.
--Can itbeassumed from thereply toquestion 47thattheState Committee forStandardization,
Metrology andCertification iscurrently thecentral point forhandling standards inquiries; i.e., until
theUkrainian Information Centre ofStandards, etc., isestablished?
Reply 80n.
Yes.
Also seeReply 79n. .
Question 81n.
When should members oftheWorking Party expect toreceive thecompleted questionnaire
onimplementation oftheAgreement?
Reply 81n.
Theapplication ontheimplementation andregulation oftheAgreements hasbeen drawn up
byUkraine anditisbeing senttotheWTO Members.WT/ACC/UKR/7
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Agricultural Policies
Question 82n.
Initsresponse toquestion 48,Ukraine notes thatitisnotamember oftheCODEX butthat
thehealth Ministry isdeveloping national standards tocomply with itsrecommendations. Ukraine also
notes thatbecause oftheChernobyl disaster Ukraine standards diverge from theCODE onStandards
ISO/IEC.
What form does thisdivergence take?
Reply 82n.
Increases inillness amongst thepopulation areinfluenced bythecontamination offood products
with foreign matter, unbalanced diets andtheabsence ofmany valuable nutrients from thediet. In
connection withthis,new"Medical andBiological Requirements andSanitary Standards fortheQuality
ofProduce andFood Products", which shall provide formore stringent safety standards, arebeing
developed, based oncurrent scientific research. These measures shall takeintoaccount thecombined
effects ofvarious detrimental environmental factors onthesystem.
Wewouldliketoemphasize,thatUkraineimposesequalrequirementsondomesticandimported
produce andfood products.
The basic documents used byagricultural specialists tomonitor production inthearea
contaminated byfallout from theChernobyl disaster are:
Temporary acceptable levels ofcesium andstrontium-90 inproduce anddrinking water set
asaresult oftheChernobyl Power Plant disaster "(TÐÄ-91)" andapproved byChief State Physician
oftheUkrainian SSR A.I.Kondrusev onJanuary 22,1991. (seeAppendix)
BQL/Kg(Litre)
_________________________________________________________________________________
Product Cs-137 Sr-90
_________________________________________________________________________________
Drinking water 18,5 3,7
Milk andcultured milk products, such as
sour cream, butter, andsolid cheese 370 37
Condensed milk 1110 110
Powder milk 1850 185
Margarine andvegetable andanimal fats 185
Meat (beef, pork andmutton), poultry
andfish, eggs (melange) 740
Potatoes, root crops, vegetables, edible
greens, fruits andberries, canned vegetables,
fruit andberry products andhoney 600 37
Bread andflour products, grain, wheat and
sugar 370 37
Fresh wild berries andmushrooms 480
Dried fruits 2960
Dried mushrooms, wild berries andtea 7400
Baby food 185 3,7
Medical plants 7400WT/ACC/UKR/7
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Levels ofCs-137 contamination deemed acceptable byinternational organizations andtheCIS
countries areappended. (Appendix 1)
Control levels formilk andmeat contamination shall beworked outbyevery oblast, shall be
confirmedbyoblastsanitaryepidemicservice,andapprovedbytheOblastAdministrationonAgriculture
andProduction. (appended)
Control levels forMilk andMeat
(90% quintel)
_________________________________________________________________________________
District/Oblast Milk BQL/litre Meat BQL/Kg
_________________________________________________________________________________
Kiev oblast
(except Polessky and
Ivankovsky districts) 74 74
Polessky 300 400
Ivankovsky 74 140
_________________________________________________________________________________
Zhitomir oblast
Volodar-Volynsky 74 140
Yemel 'chinsky 300 140
Korostensky 140 400
Luhinsky 370 600
Malinsky 74 140
Narodichsky 370 600
Novograd-Volynsky 140 140
Ovruchsky 370 "
Olevsky 300 400
Snitynsky 74 140
_________________________________________________________________________________
Vinnitsa oblast 74 140
_________________________________________________________________________________
Volynska oblast 370 400
(Kamin '-Kashirsky,
Lubeshovsky, Manevichsky
districts)
_________________________________________________________________________________
Rivne oblast 370 400
_________________________________________________________________________________
Chernihiv oblast
Koveletsky 74 140
Koriukovsky 74 140WT/ACC/UKR/7
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Repkinsky 140 400
Semionovsky 140 400
Chernihovsky 140 140
_________________________________________________________________________________
Appendix 1
Acceptable Levels ofRadioactive Matter inProducts
_________________________________________________________________________________
Product Acceptable levels BQL/Litre BQL/Kg
_________________________________________________________________________________
1986 1988 1991 1995 1992 1993
USSR USSR USSR Ukraine Belorus Russia
summary Cs-137 Cs-137 Cs-137 Cs-137 Cs-137
beta-activity CS-134 Cs-134 Cs-134 Cs-134 Cs-134
draft
_________________________________________________________________________________
Irrigation water
Drinking water 370 18,5 18,5 4 18,5 18
Milk anddairy
products 370 370 370 74 111 370
Powder milk 1850 740 740 740
Animal fats 370 185 185 185 185
Vegetable oil 7400 370 185 185 185 185
Meat andmeat
products 3700 1850 740 74 600 600
Eggs (BQL/unit) 1850 1850 740 74 600 600
Fish 3700 1850 740 185 600 600
Vegetables, fruit,
berries 3700 740 600 60 370 600
Potatoes 3700 740 600 60 370 600
Fresh wild berries 1850 1480 60 370 600
Bread andbread
product 370 370 370 40 370 370
Sugar 1850 370 370 370 370
Fresh mushrooms 18500 850 1480 740
Dried mushrooms 11100 7400 740 3700 3700
Medical plants 18500 7400
Baby food 370 185 74 37 185
_________________________________________________________________________________WT/ACC/UKR/7
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_________________________________________________________________________________
Product Acceptable levels BQL/Kg BQL/Litre
_________________________________________________________________________________
FAO KEC Baltic
Food andAgriculture Recommendations countries
Organizations oftheIAEA experts
_________________________________________________________________________________
Irrigation water
Drinking water 1000 1000 18,5
Milk anddairy products 1000 1000 250
Powder milk 1000 1000 370
Animal fats 1000 1250 185
Vegetable oil 1000 1250 185
Meat andmeat products 1000 1250 370
Eggs (BQL/unit) 1000 1250 370
Fish 1000 1250 370
Vegetable, fruits,
berries 1000 1250 250
Potatoes 1000 1250 250
Fresh wild berries 1000 1250 250
Bread andbread
products 250
Sugar 250
Fresh mushrooms 600
Dried mushrooms 3700
Medical plants 2850
Baby food 1000 400 185
_________________________________________________________________________________
2. Export Regulation
Question 49.
What percentage andwhich products fallunder theState contract system forexports? Do
exporters under thesystem receive government subsidies forproduction orexport?
Reply 49.
TheResolution oftheCabinet ofMinisters of2April 1994, No.140, "OnProvision ofExport
ofGoods Under theState Contract for1994" specified thevolume ofgoods tobeexported under State
Contract.
Because ofdeficient deliveries ofgoods under State Contract planned forexport, theCabinet
ofMinisters reduced thevolume ofdeliveries offerrous metal products by1,170 tonsduring thefirst
halfofthe1994 year. Resolution No.620of23August 1994.The State centralized hard currency funds
have been formed during 1993 to1994 primarily from revenues gained from theexport oftheproducts
under State contracts. TheResolution oftheCabinet ofMinisters ofUkraine No.212of22March 1993,
established general regulations with regard toexport tobecarried outunder State orders, quotas for
thisexport in1993, andalistoftheenterprises authorized toexport goods under State contract. The
Resolution oftheCabinet ofMinisters No.421of5June 1993, laiddown theprocedure ofpayments
forexport carried outunder State contracts. This Resolution allows theauthorized foreign-tradeWT/ACC/UKR/7
Page 85
organizations tobuy, attheexpense oftheState budget, theproducts atinternal market prices and
toexport them. Inthiscase, theauthorized organizations above willbefinanced every month bythe
Finance Ministry sothattheorders forwhich thebudget envisages allocations canbefulfilled. In
their turn, theforeign trade organizations direct thehard currency returns ontheFinance Ministry
foreign currency account intended forState contracts. This isanintegrated source offinancing foreign
policy spending associated withtheUkraine 'sobligations inforeign relations, payments toInternational
Organizations, payments ofcredits earned ontheGovernment 'sguarantee.
TheResolution oftheCabinet ofMinisters No.140of2April 1994, setsforth thelimits of
quotas forexport ofthegoods under theState contract for1994. Within these limits themajor share
belongs totheproducts ofmetallurgy shipped viatheUKRZOVNISHPROM foreign trade association.
This Resolution introduces, also, some amendments tothegeneral procedure oftheexport ofgoods
under State contracts, inparticular, those regarding thepriority oftheproduction andshipment ofthe
products tobecarried outunder State contracts. Italsoexempts such goods from compulsory advance
payments forcosts ofrawmaterials, power consumption, andtransportation services.
Allowing foralowefficiency ofexport carried outunder State contracts, negative effects
oftheexport operations during 1993 -1994 andfaults infinancial policy, theProgramme ofthe
Government coordinated with theIMF envisages arevocation ofthecentralized formation oftheState
foreign currency funds attheexpense oftheexport ofgoods under State contracts. This Programme
establishes thatthese funds willbeformed attheexpense oftheState budget inbuying foreign currency
intheinter-bank foreign currency market ofUkraine.
TheResolution oftheCabinet ofMinisters ofUkraine of2April 1994, No.140, "OnProvision
ofExport oftheGoods under theState Contract for1994" specifies thevolume ofgoods tobeexported
under State contract.
Products Unit of
measurementExport volume %
Total State
Ferrous metallurgy thsnd t 20674 7220 39.4
Wastes offerrous metals ditto 405 150 37
Non-ferrous metals ditto 318.37 80 25
Chemical products ditto 3805.2 2091 54.9
Chemical products mildl 28.7 2.5 8.7
Salt thsnd t 3700 30 0.8
This export mechanism willcease toexist with privatization.
Question 50.
What isthepurpose androleoftheUkreneshtorg (foreign trade) Concern established bythe
Council ofMinisters inMay 1994; andwhat isitsrelationship togovernment ministries? How will
thisnew entity affect theroleplayed bytheformer "special exporters?"
Reply 50.
TheUkzovnishtorg Concern wasterminated bytheDecree ofthePresident ofUkraine No.
412/94of27July1994,whichrescindedResolutionNo.292oftheCabinetofMinistersof6May1994.WT/ACC/UKR/7
Page 86
Inaddition, theregulation oftheregime ofexport control over critical goods/technologies is
effected bytheGovernmental Commission authorized bytheDecree ofthePresident of3January 1993,
theResolution oftheCabinet ofMinisters No.160of4April 1993, andtheLetter oftheCabinet of
Ministers of11February 1994. TheGovernmental Commission isauthorized tolicence andestablish
quotas fordefense products. Aworking body oftheCommission, theExpert Technical Board, has
drawn updraft laws establishing theregime ofcontrol over non-proliferation ofmissile
technologies/enumeration ofdefense goods tobesubjected toexport control, control regulations to
beexercised over export-import andtransit ofdefense goods andtheState control regulations toensure
thatthesaiddefense goods areused asobligated bythedeclaration inthecontrol application. These
draft laws aretobeapproved bytheCabinet ofMinisters.
Toimplement particular provisions oftheReport ofthePresident onthemain principles of
economic andsocial policy andfurther encouragement ofexport, theCabinet ofMinisters adopted
Resolution No.734of24October 1994, "On Liberalization ofExport" which preserved quotas and
licences foronly four items:
-grains;
-steel-making pigiron;
-coal;
-wastes offerrous, non-ferrous andnoble metals.
Question 51.
Please describe infurther detail Resolution 212(3/22/93) andResolution 421(6/5/93) regarding
thefinancing ofproducers ofexportable goods andthegoods 'export. Isthisdone through asystem
ofpurchase under government contract? What aretheterms?
Reply 51.
TheResolution oftheCabinet ofMinisters No.421of5May 1993, "OnPayments inExports
under State Contract" established theorder ofpayments bytheexporting enterprises andorganizations.
This Resolution directs theFinance Ministry tocarry outadvance payment fortheproducts purchased
byauthorized organizations from theorganizations-suppliers oftheproducts.
Theauthorized organizations export thepurchased products incompliance withtheResolution,
export them andtransfer therevenues obtained from theexport totheState budget less0.5percent
ofcommission. TheFinance Ministry andtheMinistry ofEconomics areentrusted tosupervise the
execution ofthisResolution. Actually, thismakes astimulation mechanism forindustrial branches
operating forexport.
Resolution No.212of22March 1993, applied only toState contracts andorders for1993
andnow itisnoteffective.
Subsidies/Export Stimulation Measures
Question 52.
Forsubsidized agricultural exports over thepast tenyears, please provide thequantity,
procurement andexport prices, andbudgetary outlays. Does Ukraine maintain anycurrent agricultural
export subsidies?WT/ACC/UKR/7
Page 87
Reply 52.
Duetobudget limitations andabsence ofitsowncentralized funds theMinistry ofAgriculture
andFood ofUkraine does notmaintain agricultural andfood exporters. Thus, there arenosubsidies
foragricultural andfood production inUkraine todate.
SeeReply 55.
Question 53.
What subsidies arecurrently available toexporters ofagricultural products? Please provide
thetypes, quantities, values andreasons foreach.
Reply 53.
Due tobudget constraints, andalso duetothelack ofitsown resources, theMinistry of
Agriculture does notprovide financial support toexporters ofagricultural andfood products. Thus,
atthepresent time, there arenoexport subsidies foragricultural andfood products inUkraine.
SeeReplies 52,55 and129.
Question 54.
What steps does Ukraine plan totake tobring itssubsidies regime into conformity with
GATT/WTO obligations?
Reply 54.
SeeReply 52.
Question 55.
Inthissection[ExportsStimulationMeasures,IncludingSubsidies],Ukraineprovidesinformation
onitsquota related tocertain purchases. Arethese quotas andgovernment contracts andorders specified
solely interms ofquantity soldorexported, e.g., intermediaries must export apercentage ofUkraine 's
production ofagiven good inagiven year orfiscal period? Orarethese quotas specified interms
oftotal export revenue/foreign currency received?
Reply 55.
In1994 three Presidential Decrees, three Resolutions oftheCabinet ofMinisters andthe
Resolution oftheSupreme Rada "On Overcoming theCrisis inAgro-industrial Complex" of
17July 1994, introduced changes intothepurchase ofagricultural products andpayments forthem,
financial support toandcredit policy inagricultural production, preferences tobegranted toagricultural
commodity producers, andpricing mechanism.
Inforeign economic activities, theagricultural commodity producers aregranted thefollowing
advantages.
- Theexport ofagricultural products, rawmaterials andthegoods resulting from their processing
arenotsubject toquotas norlicences ifitiseffected under theState contracts andorders for
supply ofthese products toState resources.WT/ACC/UKR/7
Page 88
- Agricultural commodity producers areexempt from acompulsory selling of50percent of
foreign currency (except for10percenttobeobligatorily credited totheNational Bank) gained
from theexport carried outunder State orders andcontracts ofthecommodities oftheir own
production. They arealsoexempt from theexport andimport duties inbarter operations with
thecommodities oftheir ownproduction, iftheyimport oilproducts, fertilizers, plant protection
means, agricultural machinery required foragricultural production.
- Inaddition, incompliance with Resolution oftheCabinet ofMinisters "On State Contracts
andOrders forAgricultural commodity, Raw Materials andFood Products for1994",
agricultural commodity producers thatfulfilled their obligations under State contracts andorders
areexempt from VAT inselling thecommodities produced above thevolume oftheState
contract andorder inUkraine andabroad.
Agricultural enterprises, which have fulfilled State requirements forthesaleofgrain, become
exempt from quotas andlicensing requirements forthegrains category. That is,they have theright
toexport grains without quotas orlicences.
Privatization
Question 56.
Please explain theprogress onprivatization inthefarm economy, particularly onthecollective
andStatefarms.WhendoesUkraineplantoprivatizeitsentirefoodprocurementandprocessingsystem?
Reply 56.
Ownership relations intheagrarian sector arereformed bytransforming theState property
oftheState-owned farms andthecollective property ofthecollective farms intoprivate property,
providing forfreedom forfarmers tomake their own choice ofeconomic activities creating onthis
basis amulti-type economy. TheGovernment brings nopressure oncollective andState farms in
reorganizing them. Inacase, when aState farm issuffering losses inrevenues, nocompensations
areprovided for. Property sharing incollective agricultural enterprises istobemainly completed in
1995. Property ofState farms isexpected tobeprivatized during 1995-1997.
Only thetrade offruit andvegetable products andpotatoes relates tothesystem oftheMinistry
ofAgricultural Production ofUkraine, which isrepresented by109wholesale andretail fruit and
vegetable integrated enterprises. Together with specialized fruit andvegetable farms, transport,
procurement, processing andtrade enterprises they areforming asingle fruit andvegetable complex.
2,500 tons ofvegetables, 1,500 tonsofpotatoes andabout 800,000 tonsoffruits, grapes andgourds
were annually sold through thewholesale andretail fruit andvegetable enterprises.
Incompliance with thePresidential Decree alltheshops offruit andvegetable trade were
commercialized in1993, sothey obtained acorporate status. Asaresult ofthistheintensive process
oftheir despecialization began. They began tosellalcohols, non-foods andother goods. Thefruit and
vegetable complex hasbecome broken. Thefruitandvegetable integrated enterprises reduced purchases
offruits andvegetables produced andthefarms reduced land under cultivation forvegetables. The
sales offruits andvegetables andpotatoes fell3to4times.
Asthemarket relations develop, firm-organized trade ofagricultural products andproducts
oftheir processing becomes more widely used. There already areabout 1500 such shops inoperation,
which function mainly asstructural branches andother structural bodies. Thefirm-organized tradeWT/ACC/UKR/7
Page 89
demonstrates itscompetitiveness andsells atlower prices thanks tolower mark-ups, creates conditions
fortimely arrangements with suppliers.
Only three ofthetrade enterprises oftheMinistry ofAgricultural Production areprivatized.
Incompliance with theDecision oftheGovernment, freepricing ofagricultural products was
adopted in1992. Prices aresetbyproducers themselves irrespective oftheform ofownership bythe
agreement with buyers, thesupply anddemand being taken into account. The so-called guiding
purchasing prices setbytheMinistry ofAgricultural Production andcoordinated with theMinistry
ofEconomics fortheproducts, which aresoldbytheproducers under State orders (grain, sunflower
seed andsugar-beet), areasortofrecommendation only andarenotcompulsory forpayments.
Asforwholesale andretail prices, they arealso formed allowing forsupply anddemand
conditions. Atthesame time, thegovernmental price control isintroduced forsome types offoods.
Thus, upper limit ofprofitability andVAT aresetforflour, bread andbakery products (except higher
quality products). Every change inprices formeat andproducts ofmeat andmilk andmilk products
which depends onexternal factors, should bedeclared totheregional executive authorities. The
Presidential Decree setsforth general limit ofprofitability forindustrial enterprises (upto45percent
ofcostvalue) andofmercantile addition totheprice (upto55percent ofproducer price).
Sharing isanimportant pre-condition forfurther farmership development. About 28,000 farms
arealready registered, which obtained 558,000 haofagricultural land. Predominant majority offarms
isactively participating intheformation ofState resources ofagricultural products andrawmaterials.
Astheexperience ofrecent years hasshown, farmership formation isrestrained byaseries
ofartificial andobjective causes. About 40percent offarms areprivatized anduseupto10haof
land, which cannot provide efficient farming inthemajority oftheUkrainian regions. Thelevel of
technicalfacilitiesofthefarmsisverylow.Thisiscausedmainlybyhighpricesofagriculturalmachines,
equipment andmaterials, softcrediting stoppage forthese farms, State budget limitations.
Atthepresenttime,reformsoftheagriculturalcomplexinUkraineapplytocollectiveagricultural
enterprises, State farms, private farms, farms with mixed forms ofownership, construction enterprises
andother kinds ofagricultural service enterprises andorganizations. There aremore than 4million
people employed inagricultural production. Asaresult ofthedenationalization ofproperty, 26percent
ofenterprises inagriculture arenow State owned, and74percent arenon-State owned.
Seventy-four percent ofallworkers arenow employed inthenon-State sector. 76percent
ofarable landisbeing used bythenon-State sector, thenon-State sector owns 74percentofthebasic
production capital, anditproduces 70percent ofgross production.
According tocurrent data, more than 400State farms andother State agricultural enterprises
(one fifth) have been privatized andaswell as18percent ofprocessing andagricultural service
enterprises. TheState farms have been reformed toagricultural enterprises andjoint stock associations,
andprocessing andagricultural services enterprises have been changed topublic corporations.
Approximately 9,000 collective farms, thatis96percent, have been reformed through the
process ofdividing theproperty intoshares. Thecollective farms have been reformed intocollective
agricultural enterprises, peasants 'associations, cooperative associations, andstock-holding companies.WT/ACC/UKR/7
Page 90
Agricultural Policies
Question 57.
Inaddition torequiring licences forimporters andexporters, what other measures does the
Government ofUkraine usetocontrol trade inprocessed andunprocessed agricultural products? What
aretherequirements andcosts ofthese import andexport licences?
Reply 57.
Inconsistence with theCabinet Decree No.734 of24October 1994, "On Liberalization of
Export Operations" thelistofgoods forwhich export issubject toquotas andlicensing in1994 includes
grains only. Agricultural export isexport duty-free. TheCabinet Decree No.285of3May 1994, "On
Changes inRates ofImport Duty forSome Types ofGoods" establishes therates ofimport duty for
agricultural products toprotect domestic producers. Licences aregranted bytheMinistry ofForeign
Economic Relations forafeeequal to0.1percent ofthevalue oftheexports. Licences areissued
onthebasis oftheapplications, theform ofwhich isdetermined bytheMinistry ofForeign Economic
Relations ofUkraine. Acopy ofthecontract isattached totheapplication andalsothedocument which
evidences thereceipt ofquota from theMinistry ofAgriculture must beattached. Thelicence issues
within three days andthereason foranydenial ofalicence must beclarified inwritten form. This
decision canbeappealed inArbitration Court according totheCivil Procedure Code.
SeeReply 10.
Question 58.
Please describe anyfarm support programmes thatareavailable toUkrainian farmers. Please
provide thetypes, quantities, values andreasons foreach. How andwhen does Ukraine plantophase-out
anysuch plans under itsmarket reform efforts?
Reply 58
Tosocially protect thepopulation intheinflationary conditions theGovernment maysetextra
payments forsome products attheexpense ofbudgetary funds. Such extras forexample, areset
beginning from 1July 1994 foratonofmilk, cattle andpoultry sold intheframework ofState
procurement. Their share intheproduct price is15to30percent.
SeeReplies 55,56.
Question 59.
Please explain howagricultural commodity producers qualify forgovernment sponsored credit
programmes. Arefunds allocated onestablished credit worthiness standards orareother criteria used?
Please provide thedifference between interest rates andloan terms forgovernment-sponsored versus
commercial loans? What isthedefault rateongovernment sponsored loans tocommodity producers?
Reply 59.
Thecredits totheagro-industrial complex enterprises andorganizations aregiven at30percent
interest forthem toproduce, store, process andsupply agricultural commodities under State contracts
andorders and, incompliance with theLetter oftheNational Bank of5July 1994, atapproximately
250percentinterest forimplementation oftheprogrammes other than those carried outunder StateWT/ACC/UKR/7
Page 91
contracts andorders. Therequirements ofthisLetter astothelower interest donotextend tothose
agreements thatwere concluded orprolonged before 1July 1994. Theterms ofsuch agreements may
bechanged ifagreed upon between thetwosides. Ifabank does notconsent tothedecrease inthe
interest tobepaid forthecredit obtained before 1July 1994 then theterms ofthecredit agreement
should beobserved. Enterprises canbeexempt from fines tobeimposed duetodefault ofpayment
asenvisaged intheLetter.
2. Export Regulations
Question 83n.
--Weunderstand thatUkraine hasrecently formalized thereplacement ofitsexport quotas andother
controls with asystem ofcontract registration forexporters which allows theMinistry ofForeign
Economic Relations toreview export contracts prior totheir execution.
Please outline fortheWorking Party how thissystem isintended towork, i.e., how does an
exporter gainMINFER approval after thereview? What criteria areapplied inthereview? Under what
circumstances would acontract benullified orblocked based onthisreview?
Reply 83n.
During 1994-1995 theGovernment ofUkraine eliminated allexport quotas andlicensing
according tothecourse offoreign economic activity liberalization. (Bysummer 1995 there areonly
grains andwastes ofnon-ferrous andprecious metals licensing have remained).
Consistent with thiscourse, theResolution oftheCabinet ofMinisters "OnLiberalization of
Export Operations" of24October 1994, No.734andthePresidential Decree "On theSystem of
Recording ofSome Particular Foreign Economic Agreements (Contracts)" of7November 1994
eliminated thesystem ofnon-tariff regulation ofexport operations andlaiddown thebasis ofasystem
ofadvance recording offoreign economic activities andcontrol over thereturns offoreign currency.
This isofprime importance atthispoint inourcourse ofradical economic reforms forithelps improve
thebalance ofpayments andstabilize theState budget. Apreliminary analysis oftheoperation ofthis
recording system hasalready indicated aneed forprofound changes initsdevelopment.
This recording system allows ustomake some conclusions andreveals some negative trends
thathinder thenormal development offoreign economic activities andinaddition, makes itpossible
toavoid thedevelopment ofthese trends, inparticular:
- ithasbeen found thatover 60percentofallforeign economic contracts donotcomply,
inboth form andfact, with therequirements oftheLaws ofUkraine, which invalidates
them. Theuseofthissystem allows theprevention atgross violations ofthelawand
protects theeconomic interests oftheState;
- onaverage, therecording procedure takes 5days. Allowing forthefactthataforeign
economic operation takes some 25or30days, itisquite clear thatthisprocedure cannot
cause problems forexporters. During theperiod thissystem hasoperated, only in
1percentofthecases hastheMinistry oritsregional branches been forced toreject
thecontracts because oftheir noncompliance with theLaws ofUkraine.
Therecent results oftheforeign economic activity ofUkraine areofgreat concern. Negative
balance offoreign economic activity amount toUS$1,8 mln. Notwithstanding thatinthenear futureWT/ACC/UKR/7
Page 92
thisresult willbeclarified, thegeneral conclusion isevident: Ukraine continues tolivewith debts.
This phenomenon isvery dangerous.
Analysis ofthedatashows thatatthesame timeasthegrowth ofimports intheenergy complex,
which hasnegatively affected thetrade balance ofUkraine, some restricting factors onUkrainian exports
exist. Thething isthatdeveloped countries apply different non-tariff (i.e.quantitative, licensing, product
andtechnical standards, anti-dumping) andtariff restrictions.
UkrainelostexportmarketsamountingtoUS$600mln.onlybecauseofanti-dumpingmeasures.
Uncontrolledre-exportfromthirdcountriesnegativelyaffectedformationoffavourableconditions
forexport ofUkrainian goods. Ithappens very often when Ukrainian goods, which areexported under
intergovernmental agreements toCIScountries, come tothese countries butafter thatthey aresold
inthird markets ataprice which iscomparatively lower than thatexisting inthismarket. Insuch
acase ontheonehand wehave arealthreat ofanti-dumping investigation andontheother wehave
lostamarket fordirect export ofgoods from Ukraine.
Taking intoaccount everything mentioned wecannotsolve theproblem without having a
membership inGATT/WTO system. Insuch asituation when close andtraditional partners, inparticular
countries ofCentral andEastern Europe, areMembers ofGATT/WTO (forexample Poland, Hungary,
Czech Republic, Slovakia, Rumania, Slovenia) orwillbecome Members innear future (Bulgaria,
andalsoRussia andtheBaltic States which practically have created afreetrade association) Ukraine
willbesurrounded byGATT/WTO trade regimes andwillbecome an"trade outsider".
Last year showed avery dangerous tendency inforeign trade. Thelargest portion ofturnover
inforeign trade wasrealized onabarter basis. Inprinciple itisauseful form oftrade, buttotal usage
ofthisform under ourcountry 'sconditions willcause amore difficult economic State forourcountry.
Itwillclose thechannels forreceiving ofnecessary currency income andcould bring ustothefinal
collapse ofourmonetary system.
Unfortunately, even after application ofmeasures concerning foreign trade liberalization, the
taskofwhich istocorrect thetrade inbalance through export stimulation andelimination ofsome
defects, which existed inthissphere, wefailed tosolve thebarter problem.
Itisenough tosaythatforonly thefirst sixmonths of1994 wehave "driven" intobarter
approximately US$2 bln.under contracts which have been concluded. That amounts to80percent
ofhighly liquid products.
Thedocuments accepted forconsideration should beentered intwodays bytheNon-tariff
Regulation Department intothecomputer data base andaregistration card should beenclosed with
thesetofdocuments. Now thedocuments should betransferred totheLegal Department, Department
oftheMarket andPricing, Currency andCredits Department andDepartment oftheExport-Import
Control (ifaspecial export treatment isinvolved).
Inaddition, onfulfilment ofthePresidential Decree "OnRegistration ofSome Kinds ofForeign
Economic Agreements (Contracts) inUkraine" theMinistry ofForeign Economic Relations ofUkraine
haspublished anumber ofdecrees, which simplify themechanism itself asmuch aspossible forcarrying
outthisregistration. From thebeginning ofacurrent year:
- itisestablished bytheMinistry ofForeign Economic Relations ofUkraine theDecree
No3of19January 1995 thatbarter agreements (contracts) areunder registration onlyWT/ACC/UKR/7
Page 93
according tosome lists ofgoods (before thatdate allbarter contracts were under
registration);
- period ofexport licences operation given in1994 isprolonged for2months of1995
bytheMinistry ofForeign Economic Relations ofUkraine Decree No.4of
19January 1995;
- itisestablished bytheMinistry ofForeign Economic Relations ofUkraine Decree
No.27of24February 1995, theshortest period andthemost simple mechanism of
contracts registration implementation where subject isthefulfilment ofobligations
according tointerState andintergovernmental agreements ofUkraine ontrade and
economic co-operation;
- listofhigh-liquid goods where agreements (contracts) fortheir export were under
registration isconsiderably reduced bytheMinistry ofForeign Economic Relations
ofUkraine Decree No.32of7March 1995 andthislistiscancelled ingeneral by
theDecree No.42of21March 1995.
Therefore, up-to-date under registration isagreements (contracts) ongoods inexport ofwhich
Ukraine hassome international commitments.
Question 84n.
What procedures isUkraine using toensure transparency anddue-process inoperating this
system? How canexporters appeal ifthereview blocks their trade?
Reply 84n.
TheAdministrative Code ofUkraine defines principles ofensuring transparency andconformity
withthedue-processrulesinoperatingofthissystem.Exportersshouldappealaccordingtotheprocedure
defined bytheAdministrative Code ofUkraine.
Question 85n.
Theresponses toquestion 49-51 describes Ukraine 'spractice ofexporting goods under State
"contract" or"orders." Weunderstand thatsuch exports were, andcurrently stillare,theprimary source
ofhard currency fortheUkraine Government, though arevocation ofthispolicy isenvisaged.
--InNovember 1994, Ukraine intensified these policies, requiring registration ofcertain foreign
trade contracts andestablishing indicative prices forexport goods appear tocontradict thetrend toward
reducing theState 'sroleinforeign trade. This would seem tocontradict theobjectives oftheSTF
arrangement with theIMF.
--Purchases byauthorized foreign trade organizations arefinanced bytheFinance Ministry
andthegoods tobeexported under State Contract or"orders" arebought at"internal market prices."
Ineffect, theauthorized foreign trade corporations actasexport agents forthegovernment, purchasing
thegoods atfixed prices with government funds, arranging theexport, then turning over theforeign
exchange proceeds totheGovernment lessacommission of0.5percent.
--TheGovernment hasused theforeign exchange thusacquired toaddress multilateral needs.
According theFTM, theInternational Monetary Fund ispressing forthegovernment tocompete forWT/ACC/UKR/7
Page 94
itsforeign exchange intheinterbank foreign currency market with everyone elseandtoabandon this
extensive State-trading operation.
Please describe precisely how trade under State contract ororders isinitiated andconducted.
Arethere specific quantities mandated forimport orexport? Arethefirms thatconduct thistrade
designated assoleimporters orexporters?
Reply 85n.
Trade under State contract andState order isstipulated bythecurrent Ukrainian legislation.
There arenospecific provisions orexemptions, butwith theaimtosupport theleast developed regions
ofUkraine trade relations areestablished through State order orState contract with themost stable
enterprisesoftheregion.Therearenonormativeprovisions,whicharestipulatedquantitiesforexporters
orimporters. Theenterprises dealwith imports orexports have no"pure importer/exporter" status.
Question 86n.
How arethe"internal market prices" ofgoods tobeexported under State Contract determined?
Towhat extent dosuch prices reflect actual production costs? What willbetheeffect onthese exports
iftheUkraine Government converts toState budget purchases ofhard currency intheinter-bank foreign
currency market?
Reply 86n.
Export under State contract waseliminated atthebeginning of1995. Prices forexports are
defined under market principles.
Question 87n.
Aresuch imports used intheproduction process forgoods later exported orsolddomestically?
Reply 87n.
Such imports arenotused.
Question 88n.
During 1994, what portion ofUkraine 'simports andexports were undertaken asaresult of
these State contracts ororders?
Reply 88n.
During 1994 Ukrainian products were exported under State contracts andState orders insuch
volume:
Products Unit of
measurementExport volume %
Total State
Ferrous metallurgy thsnd t 20674 7220 39.4
Wastes offerrous metals ditto 405 150 37
Non-ferrous metals ditto 318.37 80 25WT/ACC/UKR/7
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Products Unit of
measurementExport volume %
Total State
Chemical products ditto 3805.2 2091 54.9
Chemical products mildl 28.7 2.5 8.7
Salt thsnd t 3700 30 0.8
Theabove-mentioned export system waseliminated in1995.
Question 89n.
--There appears tobearelationship among some ofthegoods traded under State "contracts" and"orders
(e.g., ferrous metallurgy, wastes offerrous metals, nonferrous metals, chemical products, andsalt),
goods exported with "indicative" export prices (e.g., castiron, ferrous metal wastes, chemical industry
products including methanol, agricultural products including salt, vegetable oil,wheat, corn, sugar,
andcertain fuels andlubricants) andremaining export quotas andlicences (grains, steel-making pig
iron, coal, andwastes offerrous, non-ferrous andnoble metals).
Could theUkraine delegation explain how these measures interrelate?
Reply 89n.
There isnodirect relationship between goods, which, during 1994, were sold under State
contracts andState orders andgoods exported byindicative prices. Nevertheless, highly-liquid products
were used inboth cases.
Export system under State contracts andState orders waseliminated atthebeginning of1995,
bywestillusethesystem ofindicative prices, which means prices recommended forconcluding highly-
liquid products contracts.
Question 90n.
--Ifimports delivered "under State contracts ororders" areinproduction process forlater resale, such
goods might notbeconsidered "government procurement" under WTO provisions. Ifthe"authorized
firms" involved have State-sanctioned trading monopolies inthese products, State mandated export
quantities, orreceive special privileges toconduct thistrade, itislikely thatthissystem issubject to
Article XVII ofGATT 1994 andtheUnderstanding onitsimplementation, nottheGovernment
Procurement Code.
--Reply 49States thatwith successful privatization, such purchases willbeeliminated. Reply 314State
thatintheframework ofeconomic reform theCabinet ofMinister isconsidering eliminating thespecial
export regime described inreplies 49-51 and290.
When might thatoccur?
Reply 90n.
From thebeginning of1995 thesystem ofState contract ororder asitwasin1994 iseliminated,
thesystem ofexport ofUkrainian production under theState contract wasalsoeliminated. According
totheDecree ofthePresident ofUkraine "OnState Contract for1995" State through theauthorized
bytheCabinet ofMinisters ofUkraine central bodies oftheexecutive power cover needs ingoods,WT/ACC/UKR/7
Page 96
works, services oftheState management bodies, intheareaofdefense, protection ofthesocial order,
health protection, education, culture, social protection ofthepopulation, fulfilment ofthescientific
andtechnical projects, creation andreplenishment oftheState reserve bythesystem ofState order
attheexpense ofState budget ofUkraine within theassets envisaged forthese purposes. Thesystem
ofState order isbased attheprinciples oftheAgreement onState Purchase ofGATT of1994 and
stipulate thepurchase fortheState needs only goods offinal consumption.
Asforthespecial export regime described inreply 290then weshould saythatexistence of
thisregime isconnected with thenecessity ofthecontrol fortheexport procedure ofsome types of
production availability ofwhich atthehome market isconstantly restricted andvery important for
thestable functioning oftheeconomy ofUkraine (energy, oilproducts, non-ferrous metals, etc).
Elimination ofthespecified regime isthecompetence oftheSupreme Rada ofUkraine. TheGovernment
ofUkrainebelieveessentialtoproposetotheSupremeRadaofUkraineconsiderthequestiononabolition
ofthevalidity oftheDecree oftheCabinet ofMinisters ofUkraine "OnEstablishing Special Export
Regime attheCertain Types ofGoods" No.16-92 of26December 1992.
Question 91n.
Given theinvolvement oftheState budget inthese transactions, how canthissystem beseen
tobeconsistent with theWTO Subsidies Agreement andAgriculture Agreement.
Reply 91n.
System oftheState contracts andorders, which hadexisted till1995 wasnotincompliance
withtheAgreement onSubsidies andCountervailing Measures andtheAgreement ofAgriculture GATT
1994. Atthebeginning of1995 itwaseliminated.
Question 92n.
--Does the"barter-deposit" regulation applied toimports alsoapply toexports? Isthere adistinction
inthelevel oftheexport deposit amount for"essential" andnon-essential goods asthere isforimported
goods?
Reply 92n.
The peculiarity ofexport operations inUkraine isthatthese operations were completely
liberalized. Ukrainian exports exempted from export duties, VAT andother fiscal measures. Non-tariff
export regulations sillapply tograins, precious metals andprecious stones, andalsotowaste andscrap
thereof.
Import policies areregulated bytariff methods, inparticular, through differential import duty
rates. The amount ofimport duty rates forthemajority ofcommodity groups does notexceed
5-7percent from customs value ofproducts anddoes notmake anybarriers totraders.
According tothePresidential Decree No.84/96 of27January 1995 rates ofimport deposit
inbarter operations areapplied tothevalue ofhighly-liquid products which areexported under barter.
Theamount ofimport deposit rates depends ontypes ofexports andimports. Forexample, import
deposit onessential imports does notexceed 5-10 percentofhighly-liquid products export value. To
non-essential imports 50percent import deposit isapplied.WT/ACC/UKR/7
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Question 93n.
TheWorking Party willneed additional information ontheexport contract system andthe
barter-deposit system before agreement thatthese measures areWTO-consistent.
More broadly, these practices have implications forthefuture shape oftheUkrainian trade
system andforUkraine 'scommitment toliberalize itstrade regime.
Reply 93n.
During 1994 andthefirst halfof1995, thetendency toward barter trade increased. Due to
alackofprice parity inmany ofthebarter transactions, inthathighly-liquid goods were being exported
while thepayment ingoods therefor wasusually inadequate andlate, thisincrease correlated directly
related with theexistence andconstant growth ofUkraine 'sbalance ofpayment deficit, itsState budget
deficit, thecrisis involving non-payment ofaccounts andtheincrease inUkraine 'sexternal debt.
Government measures designed todiminish thelevel ofbarter trade, inparticular the
consolidation oftheexchange rateoftheKarbovanets, therepeal ofexport restrictions, andthe
simplification ofprocedures forreporting ofcontracts, didnothave thedesired effect. Barter contracts
continue toconstitute nolessthan 30percentoftotal foreign economic activity, andentail theexport
of50percentofUkraine 'shighly-liquid production, theexport ofwhich should begenerating hard-
currency revenues andpromoting macro-economic stabilization.
Tomanage thissituation inaccordance with international trade laws, theGovernment followed
theUnderstanding ontheBalance-of-Payments Provisions oftheGeneral Agreement onTariffs and
Trade 1994. Pursuant totheUnderstanding, theGovernment decided toemploy so-called "price-based
measures" rather than quotas; inparticular, itdeveloped thesystem ofimport deposits asameasure
thatwould have theleast disruptive effect ontrade.
Following thisprinciple, theDecree ofthePresident ofUkraine of27January 1995, No.84/95:
OntheRegulation ofBarter (Countertrade) Operations intheArea ofForeign Economic Activity, was
issued. This Decree designated theprocedures, aswell therelevant terms (90days) andconditions
which were toapply topayment through theprovision ofgoods -the"import" aspect ofbarter
transactions. Italsospecified equivalent values fortheexported goods andimposed appropriate financial
sanctions forviolations ofitsprovisions.
Therequirement forimport deposits wastoapply only tothemost liquid goods ofUkrainian
production. Barter operations involving most types ofproducts would notrequire theplacement of
import deposits. Aswell, thisDecree didnotregulate thereturn payment ingoods inbarter contracts
where theexports hadalready been shipped prior totheeffective date oftheDecree.
Itwashoped thatplacing time limits onbarter agreements would putanendtoanyunfounded
granting of(commodity) credit toother countries, andensure timely payment incrucial imported goods.
Aswell, itwaspredicted thatsuch aneconomic lever would encourage producers topursue monetary
sales ofhighly-liquid forms ofagricultural produce, metallurgical goods andchemicals.
However, thebarter-deposit system designated intheabove-named Presidential Decree has
neverbeenoperationalinthattheNationalBankofUkrainehasnotimplementedanyworkingprocedures
foritsintroduction.WT/ACC/UKR/7
Page 98
Import Taxation Regime
Question 60.
Does Ukraine 'staxation regime assess rates forforeign-owned establishments higher than
Ukraine-owned firms?
Reply 60.
No.Moreover, foreign investors aregranted preferential taxation terms incompliance with
theLaws ofUkraine (Decree oftheCabinet ofMinisters "On Foreign Investments Regime" of
20May 1993, No.55-93, Law ofUkraine "On theState Programme ofPromotion ofForeign
Investments" of19December 1993, Resolution oftheCabinet ofMinisters ofUkraine "OnMeasures
toImplement theLaw ofUkraine ontheState Programme ofPromotion ofForeign Investments" of
31March 1994 ,No.203).
Question 61.
Please provide acomplete listbyHSnumber oftheimports thataresubject tothe10percent
excise tax. Isthesame excise taxapplied todomestically produced equivalent products?
Reply 61.
SeeReply 30.Also, below listed aretheproducts subject to10percent excise tax.
Ordinary wines (HS2204, 2205):
domestically produced 10%
imported 200%
Filterless andfilter cigarettes, tobacco-pipe tobacco (24022000, 24029000, 24031000):
domestically produced 10%
imported 150%
B&W andcolour television sets, forboth categories 10%.
Agricultural Policies
Question 94n.
--Replies toquestions 55-59 dealwith recent changes inUkraine 'sagricultural trade regime.
--Distribution offruits andvegetables isstillinthehands ofagovernment-owned distribution
system thathasbeen "corporatized" butnotnecessarily "privatized."WT/ACC/UKR/7
Page 99
--Agricultural imports andexports under State orders orcontracts areexempted from export
quotas; from compulsory foreign exchange sales totheGovernment; from import andexport duties
onbarter trade ifthey import fuel, fertilizers, herbicides, oragricultural machinery necessary for
production; andfrom theVAT after theState contract isfulfilled.
--"Indicative prices" aresetforexport goods, such assunflower seed, sugar beets, andgrains,
andprice/profitability ceilings areinplace forkeybasic food commodities, e.g., flour, bread, and
bakery products. Since July1994, theGovernment hasbeen subsidizing some products toconsumers,
e.g., beef, poultry, andmilk, tohelp with theinflationary spiral. Finally, working capital loans are
available atsubsidized interest rates iftrade isconducted onthebasis ofState "contracts" and"orders."
--Asnoted before, exports under State "contract" or"orders" sense, State trading onbehalf
oftheGovernment.
Please listalltrade enterprises oftheMinistry ofAgricultural Production, indicating thethree
thatare"privatized" anddescribing what thatmeans inpractice.
Reply 94n.
SeeReply 9.
Todate18from 109industrial complexes wholesaling andretailing fruit andvegetables have
been privatized. From theexisting trade enterprises -Ukrtekhagroservis, Ukrprodresurssyrovyna,
Ukragrokhim -theconcern Ukragrotekhservis andtheassociation Ukiragrokhim bytheyear of2000
willbeprivatized through auction.
Question 95n.
Indicatewhatproductsdominateintheirtradeandtheextenttowhichtheyformallyorinpractice
dominate themarket inthisproduct.
Reply 95n.
Intrade operations of3State enterprises, mentioned inReply 94n. ,thefollowing products
aredominating:
-exports: agricultural products -3mentioned enterprises;
-imports: agricultural equipment -70percent, fuel and lubricants -20percent
(Ukragrotekhservis); financial and technical resources forprocessing industry -30percent
(Ukrprodresyrssyrovyna); herbicides andpesticides -70percent (Ukragrokhim).
Question 96n.
Itisworrisome thatbarter transactions foragricultural imports areexempt from theVAT.
Weunderstand thatbarter transactions make upeighty percentormore ofUkraine 'simports. How
willUkraine reconcile selective application oftheVAT with theMFN requirements found inArticle I?WT/ACC/UKR/7
Page 100
Inthearea ofagricultural incentives, theUnited States expects thatUkraine willreduce and
bind itslevels ofdomestic support andtrade subject toexport subsides, asrequired bytheWTO
Agriculture Agreement.
Reply 96n.
Indeed, some barter transactions foragricultural imports areexempted from VAT incase if
these barter transactions concern agricultural machines andequipment, processing equipment, pesticides
andherbicides, black petroleum products fortheown needs ofagriculture.
While thefinancial situation inagriculture willbestabilized these exceptions willbeeliminated.
Question 97n.
What areUkraine 'sprincipal markets foragricultural goods?
Reply 97n.
Themain markets forUkraine 'sagricultural products are:theRussian Federation, Kazakhstan,
Turkmenistan andsome other CISandforeign countries.
Agricultural goods make approximately 10percentofthetotalvolume ofexport. Agricultural
goods exported from Ukraine include:
HSNomenclature
Frozen meat with nobones 0201-0202 Russia, Turkmenistan,
Uzbekistan, Bulgaria
Dried fatless milk 0402 10990 Russia, Lithuania, Turkmenistan
Salt(inbulk) 0201 00910 Russia, Hungary, Belarus
Pea(inbulk) 1103 99000 Russia, Belarus, Lithuania
Margarine 1517 70000 Russia, Lithuania, Latvia
Butter 0405 00100 Russia, Uzbekistan, Turkmenistan,
Azerbaijan
Ethyl alcohol, 96% 2207 10000 Russia, Turkmenistan, Bulgaria,
Kazakhstan
Vegetable oil 1512 19910 Turkmenistan, Liechtenstein
Wheat 1001 90000 Turkmenistan, Belarus, Slovakia
Corn 1005 90000 Russia, Poland, BulgariaWT/ACC/UKR/7
Page 101
Sugar 1701 99100 Russia, Belarus, Uzbekistan
Exchange Controls
Question 62.
Please describe how Ukraine complies with theprovisions ofGATT Article XV.
Reply 62.
TheUkrainian Cabinet Decree "On Currency Regulation System andExchange Control" of
19February 1993 (Article 7)establishes thatforeign currency may beused asamedium ofpayment
forpayments between residents andnon-residents.
Since on28June 1994, Ukraine officially passed totheGATT Secretariat the"Memorandum
onUkrainian Foreign Trade Regime", which isaconstituent part oftheGATT/WTO accession
procedure, Ukraine hasundertaken tofulfil therequirements ofArticle XVoftheGeneral Agreement
("Exchange Arrangements").
Question 63.
DoanyUkrainianlawsorregulationsdifferentiatebetweenexportersandotherfirmsincurrency
exchange rates, availability, orinother manners?
Reply 63.
According tothelegislation inforce, exporters ofanyorganization-and-legal forms and
irrespective oftheform ofownership arenotdifferentiated between asfarascurrency exchange rate
isconcerned i.e.they allenjoy equal economic rights. Astoimporters, theenterprises may buyhard
currency atanofficial exchange ratetoeffect payments under contracts onsome types ofproducts
(The decision oftheGovernmental Committee onProblems oftheUse ofHard Currency )This
mechanism willbeeffective until theofficial Ukrainian Karbovanets exchange ratematches (approaches)
themarket one.
Question 64.
What areUkraine 'splans regarding theunification ofofficial andmarket exchange rates and
mandatory exchange requirements?
Reply 64.
AccordingtothePresidentialDecreeof22August1994,"OnPerfectionofCurrencyRegulation
",agradual convergence andunification oftheofficial andmarket exchange rates ofUkrainian
Karbovanets wasconcluded on1November 1994.
SeeReply 129.WT/ACC/UKR/7
Page 102
Question 98n.
--Replies 63and64appear toconflict intheir assessment ofwhether ornotUkraine has
establishedaunifiedforeignexchangerate.Reply303Statesthat"officialcarbovanets-to-foreign-currency
convertibility hasbeen established including theremittance ofprofits." Inaddition, reply 129States
thatthe"carbovanets-to-other-currency" exchange rateissetupusing Frankfurt Currency Market cross
rates andalsothecross-rates published bytheFinancial Times.
Please give usastatus report oncurrency convertibility andhow foreign exchange rates are
established forUkraine.
Reply 98n.
From alegal point ofview Ukrainian Karbovanets isnotahard currency. Currently, residents
ofUkraine may purchase foreign currency inorder topayfortheir import contracts, totransfer their
incomes(dividends)abroad,whichhavebeenobtainedbyforeigninvestorsfrominvestmentsinUkraine,
aswellastoexecute currency transactions connected with export ofcapital, which have been licensed
byNational Bank ofUkraine.
Individuals whoarenon-residents -mayobtain Ukrainian Karbovanets incash attheexchange
offices ofUkrainian commercial banks bymeans offoreign currency exchange.
Also seeReply 99n.
Question 99n.
HasUkraine established aunified currency exchange system such thattheofficial rateisthe
market rate?
Reply 99n.
With aview toensuring favourable conditions forthedevelopment ofacurrency market in
Ukraine, toencourage export increase theinflow offoreign currency toUkraine, in1994, theNational
Bank ofUkraine unified theexchange rateoftheUkrainian Karbovanets inrelation toforeign currency,
i.e.theofficial ratewasunified with themarket rate.
TheNationalBankofUkrainedeterminestheofficialrateoftheUkrainiannon-cashKarbovanets
inrelation totheUSdollar, theGerman mark, theRussian rouble andtheByelorussian rouble onthe
basis oftheauction ofUkrainian Interbank Currency Exchange.
TheofficialrateofUkrainianKarbovanetsinrelationtoallothercurrenciesisdeterminedthrough
thecross-rates ofFrankfurt Currency Exchange andMoscow Interbank Currency Exchange andthrough
thecross-rates thatarepublished bythenewspaper Financial Times.
TherateoftheUkrainian Karbovanets incash inrelation toallcurrencies indetermined by
Ukrainian commercial banks onthebasis ofdemand-and-supply existing between thesellers and
purchasers ofthese currencies.WT/ACC/UKR/7
Page 103
Question 100n.
Who hasaccess toforeign exchange attheinterbank rateand/or at"official" prices.
Reply 100n.
Inorder tofulfil their commitments tonon-residents allagents ofeconomic activity (financial
institutions +enterprises) have theright topurchase foreign currency attheUkrainian Interbank
Currency Exchange attheratedetermined byauction.
There arenorestrictions orprivileges onthepurchase offoreign currency ontheInterbank
market ofUkraine inorder forresidents ofUkraine tofulfil their commitments before non-residents
ofUkraine.
Enterprises with foreign investments have theunrestricted right topurchase foreign currency
inorder torepatriate their revenues (dividends), which belong toforeign investors only ifthere is
documentary support astothesource ofthese earnings
ResidentsofUkrainemaypurchaseforeigncurrencyattheInterbankCurrencyMarketofUkraine
attheunified ratetofinance anykind ofimport toUkraine irrespective ofthekind orcommodity group
ofimport production.
Question 101n.
Arethere anyrestrictions, ceilings orprioritizing ofimporters 'requests forforeign exchange?
Ifso,please describe them. Ifnot,please confirm thatthere arenorestrictions onaccess toforeign
exchange forrepatriation ofprofits ortopayforimports.
Reply 101n.
SeeReply 100n.
Question 102n.
Itappears thatimporters ofsome specified products must buyhard currency attheofficial
rate. Why isthisso,andwhich products aresubject tothisrequirement?
Reply 102n.
SeeReply 100n.
Question 103n.
When willUkraine endtherequirement thatexporters must exchange halfoftheir hard currency
proceeds?WT/ACC/UKR/7
Page 104
Reply 103n.
Economic conditions permitting, itispossible thattheobligatory 50percentsaleofcurrency
earnings attheInterbank currency market ofUkraine willbeeliminated.
Question 104n.
Please clarify thebasis upon which Ukraine setsitsexchange ratefornon-U.S. dollar, non-CIS
transactions.
Reply 104n.
TheofficialrateofUkrainianKarbovanetsinrelationtoallothercurrenciesisdeterminedthrough
thecross-rates ofFrankfurt Currency Exchange andMoscow Interbank Currency Exchange andthrough
thecross-rates thatarepublished bythenewspaper Financial Times.
TherateoftheUkrainian Karbovanets incash inrelation toallcurrencies indetermined by
Ukrainian commercial banks onthebasis ofdemand-and-supply existing between thesellers and
purchasers ofthese currencies.
Investment Policies
Question 65.
Arethere anymeasures under current laws thatareinconsistent withtheUruguay Round TRIMs
Agreement orArticle IIIoftheGATT? Ifso,what areUkraine 'splans tobring them intocompliance?
Reply 65.
Weconsider thatthere arenocontradictions with theAgreement onTrade Related Investment
Measures.
The current lawoninvestment policy inUkraine, inparticular theDecree "On Foreign
Investment Policy" stipulates thatforeign investments, likeanyother economic activity, aregoverned
bytheprovisions oftheNational Investment Policy with some exceptions specifically provided for
intheDecree"OnForeignInvestmentPolicy"and"otherlawsandinternationalagreements"ofUkraine.
ThelawofUkraine allows thedesignation ofareas where noforeign investors orenterprises areallowed
or,ifallowed, their activities arelimited forreasons ofnational security (Decree "OnForeign Investment
Policy," Clause 7).Nosuch designations have been made todate.
Contributions offoreign investments intotheownership fund ofanenterprise which hasforeign
investment willbeexempted from customs andimport taxes. (Decree "OnForeign Investment Policy.)
Thecreation ofenterprises which include foreign investors willbegoverned bythesame
regulations thatcover theestablishment ofdomestic enterprises. (Clauses 19through 26).
Astothetrade intheinternal Ukrainian market, itshould beemphasized thatparticular measures
ofState regulation ofprices forparticular goods willapply onequal terms toboth residents andnon-
residents. There arenominimum required investment levels inorder toobtain national treatment.WT/ACC/UKR/7
Page 105
Question 66.
Will Ukraine commit tomaking consistent with GATT TRIMs provisions anyfuture export
incentives intheform oftaxes andcustoms treatment?
Reply 66.
Yes, assoon aseconomic conditions permit. Currently, theexport ofproducts manufactured
bycompanies with foreign investment arecovered bythestandard provisions ofthelaw"OnForeign
Trade." Theexport ofproducts manufactured byenterprises with foreign investment shall begranted
acertificate onthisenterprises 'product thatwillexempt itfrom either quota orlicence requirements.
Question 67.
Does theState Programme ofEncouragement ofForeign Investments inUkraine of1993 apply
toexisting investment ornew investment only?
Reply 67.
TheLaw "OntheState Programme ofProtection ofForeign Investments inUkraine" extends
toallestablished enterprises withforeign investments andthose tobeestablished inthefuture. However,
such enterprises with foreign investments thatbidforpreferential duties andguarantees provided for
bytheProgramme must establish their participation inahigh-priority industry and, otherwise, meet
thecriteria established bytheProgramme.
TheState Programme onEncouragement ofForeign Investments inUkraine of1993 applies
toallforeign investments carried outinUkraine prior toandafter adoption ofthisLaw.
TheState Programme ofEncouragement ofForeign Investments States clearly thefollowing
high-priority spheres forforeign investments tobecarried out:
-agro-industrial complex;
-light industry [fibres, textiles, apparel, footwear];
-timber industry;
-machine building industry;
-medical equipment production;
-metallurgy andproduction ofmaterials;
-fuel-and-power-production complex;
-transport infrastructure;
-communications;
-chemical andpetroleum industry;
-social infrastructure.
Incompliance with theProgramme, foreign investors putting capital intotheabove designated
sectors, provided thatthey meet particular qualifying requirements, willhave theright to:
-faster equipment depreciation standards;
-longer income taxdeduction term by1,2,3or5years depending onthelevel ofinvestment
(Decree "On Foreign Investment Policy," Clause 31).WT/ACC/UKR/7
Page 106
Question 68.
Isnationaltreatmentappliedtoinvestorsacrosstheboardinalleconomicsectors?Pleaseprovide
alistofallexceptions tonational treatment andthelegal basis forthese exceptions.
Reply 68.
Incompliance with theDecree oftheCabinet ofMinisters "On theRegime ofForeign
Investments," Section II,Clause 7,anational regime ofinvestment andeconomic activities hasbeen
established astoforeign investments andtheforms fortheir implementation except forcases provided
forbytheDecree. The national regime canalso bemodified byinternational agreements, "On
Encouragement andMutual Protection ofInvestments" which canbeconcluded onareciprocal basis
between States regulating theuseofthisregime andexceptions toit.
Such exceptions were provided forintheAgreement between Ukraine andtheUnited States
ofAmerica "OnEncouragement andMutual Protection ofInvestments" andtheAgreement between
Ukraine andCanada "OnEncouragement andProtection ofInvestments". Thus, thecontracting parties
enjoy theright toestablish orpreserve exceptions within thescope ofsome spheres andproblems related
tonational interests andtoreduce these exceptions toaminimum.
Thelegal basis forsuch exceptions isformed bytheState Programme ofPrivatization that
regulates therights ofboth domestic andforeign enterprises related toprivatization andtheLand Code
thatprohibits foreign citizens from owning land.
Also, theAgreement between theUkrainian andVietnamese Governments "OnEncouragement
andProtection ofInvestments" hasnotestablished thenational regime atall. Investment activities
areregulated bytheUkrainian party subject totheDecree oftheCabinet ofMinisters "OntheRegime
ofForeign Investments" andbytheVietnamese party subject totheir laws onforeign investments.
Insome cases foreign investors getbetter thannational treatment under thebilateral agreements.
Question 69.
Which government bodies play aroleinregulating foreign investment? Please describe the
areas over which each hasjurisdiction.
Reply 69.
Amajor body handling theproblem ofinvestment policy istheMinistry ofEconomics that
works outthedirections ofinvestment policy forparticular branches ofthenational economy; supervises
theimplementation ofinvestment programmes required bytherestructuring ofthenational economy;
anddraws uprecommendations onattracting foreign investments intoUkraine, asawhole andfor
particular regions andbranches oftheeconomy. Italsoanalyzes andforecasts theprocess ofinvestment
anditssocial andeconomic effects. Apart from thisMinistry, theMinistry ofForeign Economic
Relations alsotakes partintheformulation andimplementation ofthepolicy onforeign investment.
Itregisters theforeign representatives andderives conclusions based onthedata oftheir activities.
Inaddition, theFinance Ministry issues certificates toforeign investors granting them theright toobtain
thebenefits provided forbytheprogramme ofencouragement offoreign investments.WT/ACC/UKR/7
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Question 70.
What recourse doforeign investors have inthecase ofdisputes with Ukrainian partners that
arealsoState enterprises? What aretheremedies incases where government policies constitute indirect
expropriation?
Reply 70.
Any disputes between foreign investors andthegovernment over State regulation offoreign
investments willbetreated bytheUkrainian courts incompliance with theDecree oftheCabinet of
Ministers "OnForeign Investments." However, ifagreed upon between theparties andifprovided
forbytheinternational agreement onprotection offoreign investments which covers theparticular
investment, thedispute canbeheard inarbitration (commercial) courts including foreign ones. Thus,
theinternational agreements "On Protection ofInvestments" willregulate thedisputes between an
investor andanother party tothecontract. These agreements designate theprocedures forthesettlement
ofthese disputes.
TheDecree oftheCabinet ofMinisters "On theRegime ofForeign Investments" (clauses 9
and10)establishes themeasures toprotect theinvestors 'rights inthecaseofanindirect confiscation.
Inthefirstplace, these measures aredesigned toensure against forced takings andunlawful actions
ofgovernmental bodies andtheir officials, aswell ascompensation foranydamage suffered byan
investor. Also, themeasure ofcompensation foranydamage isgoverned byaparticular provision
oftheinternational agreement, "On Encouragement andMutual Protection ofInvestments."
Question 71.
Whatrole,ifany,doestheAgencyforInternationalCooperationandInvestmentsplayinassisting
prospectiveandcurrentinvestorsingainingnecessarygovernmentapprovalsrelatedtotheirinvestments?
Does ithave aroleindispute mediation?
Reply 71.
Atpresent, theUkrainian government istaking measures todelegate theinvestment activity
functions totheMinistry ofEconomics andtheMinistry ofForeign Economic Relations. Earlier,
these functions were fulfilled bytheAgency ofInternational Cooperation andInvestments. This agency
does nothave aroleindispute mediation.
Question 72.
Please describe anygovernment support, State aids, taxandfiscal incentives, orother measures
designed toencourage investment, foreign orotherwise, inproduction geared forordedicated toexport
markets.
Reply 72.
SeeReplies 1,4.WT/ACC/UKR/7
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Question 105n.
Inreply65,UkraineStatesthatitmaintainsnoTRIMsthatareinconsistentwithWTOprovisions.
Inresponse No.66,however, Ukraine commits tobring itsTRIMs intoconformity with theWTO
"assoon aseconomic conditions permit."
Could Ukraine describe alltrade-related investment measures currently inplace orcontemplated
andhow Ukraine intends toeliminate such TRIMs asrequired bytheAgreement?
Reply 105n.
Ukraine hasnotrade-related investment measures thatareinconsistent either withtheobligation
ofnational treatment ortheobligation ofgeneral elimination ofquantitative restrictions. Weregret
thewording inReply 66,which wasmisleading.
Question 106n.
--Thedecree"OnForeignInvestments"containsverygenerallanguagewithregardtodisputesettlement.
DoestheGovernmentofUkraineplayanymediatingroleindisputesinvolvingStateenterprises?
Ifso,which ministries oragencies play such arole?
Reply 106n.
TheGovernment ofUkraine maintains noministries oragencies thatplay aroleindisputes
involvingStateenterprises.AlthoughofficialsfromtheappropriateMinistryareonoccasionapproached
byenterprises toassist indispute settlement, their opinions have nolegal bearing. Ingeneral, disputes
thatcannot besettled amicably bytheparties involved arereferred either toUkraine 'sarbitral courts
ortheCommercial Court under theChamber ofCommerce andTrade ofUkraine.
Aswell, Ukraine hassigned, orisintheprocess offinalizing, agreements onthereciprocal
protection ofinvestments with 39countries. Specific bilateral dispute settlement mechanisms are
designated therein.
Question 107n.
Weunderstand thatrecently there have been anumber ofnewregulations promulgated affecting
foreign investment. Please describe these provisions andprovide copies totheWorking Party members.
Reply 107n.
Recent provisions affecting foreign investment include: article 39ofTheBudget ofUkraine
for1995, of6April 1995; Article 7oftheLaw ofUkraine onTheTaxation ofProfits ofEnterprises,
of28December 1994; andthedraft oftheLaw onForeign Investments (passed first reading inthe
Supreme Rada). Essentially, these laws eliminate thespecial taxexemptions thatapplied toenterprises
withforeigninvestment.Asindicatedintheattachedcopiesofthesubjectprovisions,anysuchenterprises
registered onorafter 1January 1995, aretopaytaxes atthegeneral rates.WT/ACC/UKR/7
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Question 108n.
--TheGovernment ofUkraine hadindicated anintention toestablish an"ombudsman" forforeign
investment tofacilitate foreign investment andassist inresolution ofdifficulties encountered by
prospective andcurrent investors.
What isthestatus ofplans forsuch anoffice?
Reply 108n.
InDocuments L/7499 andWT/L/20 itwasnotmentioned thattheGovernment ofUkraine
had anintention toestablish an"ombudsman" forforeign investment tofacilitate foreign investment
andassist inresolution ofdifficulties encountered byprospective andcurrent investors.
Asitwasmentioned above, Ukraine hasasufficient system ofarbitral courts andalsoithas
Commercial Court under theChamber ofCommerce andTrade ofUkraine. These courts areauthorized
tosettle disputes onmentioned questions.
Wewould liketoknow about thesource ofsuch aninformation toanswer thequestion more
sufficient.
Ukrainehashadbilateraldiscussionswithvariouscountries,theUSAandGermanyinparticular,
concerning theestablishment ofoffices tofacilitate foreign investment andtoassist current and
prospective investors indealing with anydifficulties encountered inthiscountry.
With respect toestablishing anombudsman forinvestors from theUnited States,
Andriy I.Goncharuk hasbeen named asSpecial Representative oftheGovernment ofUkraine inthe
Sphere ofTrade andEconomic Relations with theUnited States ofAmerica. TheDepartment ofTrade
andEconomic Relations with American Countries, within theMinistry ofForeign Economic Relations
andTrade ofUkraine, istoserve asanoffice toassist investors from theUnited States.
Government Procurement
Question 73.
Please confirm thatinallcases ofState procurement, foreign suppliers enjoy thesame rights
asdomestic suppliers. What arethese rights? Dotheyextend across allsectors ofeconomic activity?
Reply 73.
Inthecase ofgovernment procurement, foreign suppliers willbegoverned bythesame laws
asdomestic suppliers. Exceptions extend only tospecial purchases ofdefense goods, subject tospecial
regulations oftheUkrainian government. Inthecaseofgovernment procurement, theproducts provided
byforeign suppliers must meet Ukrainian standards andquality requirements. There arenoother
constraints onforeign suppliers.
Question 74.
What procedures areinplace toensure thatState procurements aretransparent andcompetitive?WT/ACC/UKR/7
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Reply 74.
Thestandards related togovernment procurement (The Decree ofthePresident, Resolution
oftheCabinet ofMinisters "On theFormation andDistribution ofState Procurement Orders") will
bepublished. These documents provide forcompetitions totakeplace between would becontractors
inwhich anyenterprise canparticipate irrespective oftheir form ofownership.
Question 75.
DoesUkraineintendtobecomeamemberoftheWTOAgreementonGovernmentProcurement?
Reply 75.
Yes.
Privatization
Question 76.
How soon does Ukraine expect thatprivatization ofState owned trading enterprises willbe
completed? What portion ofUkraine 'strade, import andexport, isaccounted forbyState-owned
enterprises? What isthisportion ifentities granted exclusive orspecial privileges toengage intrade
areadded?
What percentage ofindustrial imports enter Ukraine through aState trading entity?
Reply 76.
Atpresent,3.7thousandtradeandpubliccateringenterprisesareprivatized(totalvalueamounted
to1,009.2 bln.karb., including 281.3 bln.karb. through privatization certificates. Alarge number
ofthetrade andpublic catering enterprises (upto20percent) have been leased with thepossibility
ofredemptiontoownership.YettheResolutionoftheCabinetofMinistersNo.604of31August1994,
"On Perfection oftheMechanism ofPrivatization inUkraine andStrengthening ofControl Over Its
Implementation" suspended theprivatization ofthetrade enterprises.
Allowing foranincomplete privatization (20percent) carried outin1994 andthefactthat
theprivatization programme for1995 hasnotbeen adopted yet,itisnotpossible topredict thedate
ofcompletion ofprivatization.
ForJanuary-June 1994 State owned trading enterprises accounted forabout 8.5percent of
total exports atUS$200 million. Adding trade byentities granted exclusive orspecial privileges to
engage intrade raises thisnumber toabout 12percent. Thepercentage oftotal imports through State
trading entities isnotmore than 15percent.WT/ACC/UKR/7
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State-Trading
Question 77.
Does Ukraine maintain anyState importing agencies? Ifso,howdodomestic wholesale prices
foragricultural commodities compare with import prices? Assuming State trading corporations import
atworld market prices then sellatlocal prices, how istheprice differential accounted for?How are
theprofits used andlosses funded?
Reply 77.
Yes. However, currently there arenosignificant levels ofagricultural imports byState trading
companies. Aswasspecified intheMemorandum ontheForeign Trade Regime ofUkraine, the
regulations concerning theestablishment oftheState importing agencies arespelled outintheDecree
oftheCabinet ofMinisters "OnManagement ofOrganizations inState Property" of15February 1992
and"On Regulation ofOperations ofOrganizations Involving State Enterprises Participation" of
31December 1992.
Until recently, theprices foragricultural products were subjected toState regulation. In
conformity with thePresidential Decree "OnMeasures toDecelerate theGrowth ofPrices" No.508
of3November 1993, thefinal selling price must notexceed thesum oftheproduction costplus a
55percentmarketing margin. Pricing offoreign-origin products issubject only tomarket conditions.
Government Procurement
Question 78.
Please giveseveral examples ofState procurement ofgoods forreprocessing andsaleorresale
tothegeneral population. Does thegovernment ortheenterprise settheexport price? Onwhat basis
istheexport price set?Does thegovernment ortheenterprise setexport volumes? Onwhat basis are
export volumes set?
Reply 78.
From theinstitutional point ofview, theterm "government procurement" wasunderstood
tomean, until recently, asystem ofState purchases effected under State contracts andorders. The
procedure ofthegovernmental export contract isthefollowing: theproducer obtains acredit from
theFinance Ministry andsells theproduced goods attheinternal price totheforeign trade organization
which isauthorized toexport them forworld price. After deducting itscommission feestheforeign
trade organization transmits theresulting export earnings totheState Exim Bank. Theobjective of
theexport carried outonState contracts istofinance essential imports through convertible currency
earnings from export oftheproducts which could bemarketed relative easily attheworld market and
controlled bythegovernment.
Theobjective ofexports onState orders istofulfil governmental trade commitments resulting
from inter-governmental agreements. Inaddition, theenterprises concerned have access toimports
required forexport production. Incompliance with theprogramme ofeconomic reform coordinated
with theIMF andWorld Bank, thissystem oftheexport contract andorder willbetransformed, inWT/ACC/UKR/7
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thebeginning of1995, intothePublic Procurement System meeting requirements oftheGovernment
Procurement Agreement.
Also seeReply 49.
State-Trading
Question 79.
Please provide theestimated volume ofinter-enterprise trade inindustry andagriculture. Is
such trade subject tomarket forces orgovernment regulation? Please elaborate ingood detail howthis
trade affects thetransition tomarket economic structures. Does inter-enterprise trade provide hidden
orimplicit subsidies toindustry oragriculture?
Reply 79.
Thetrade between enterprises inindustry andagriculture iscarried outonthebasis ofdeliveries
atfreemarketpricesandisnotcontrolledbytheGovernment.Itcompletelyconformstomarketeconomy
relations. This form excludes thehiding ofsubsidies. During thistransitional period itisnotpossible
tomake avalid estimate astothelevel ofthistrade because ofthelack ofdata.
Government Procurement
Question 109n.
--Initsreply toquestion 73,Ukraine States thatinthecase ofgovernment procurement, foreign
suppliers must meet Ukrainian standards andquality requirements.
Aresuch standards thesame asorsimilar tothose described inthereply toquestion 43?
Reply 109n.
Yes, these standards aresimilar tothose, described inthereply toquestion 43inDocument
WT/L/20.
Question 110n.
IsUkraine prepared toinitiate negotiations formembership intheGovernment Procurement
Agreement during theaccession negotiations?
Reply 110n.
Yes.UkraineispreparedtoinitiatenegotiationsformembershipintheGovernmentProcurement
Agreement during theaccession negotiations.WT/ACC/UKR/7
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State-Trading
Question 76.
How soon does Ukraine expect thatprivatization ofState owned trading enterprises willbe
completed? What portion ofUkraine 'strade, import andexport, isaccounted forbyState-owned
enterprises? What isthisportion ifentities granted exclusive orspecial privileges toengage intrade
areadded?
What percentage ofindustrial imports enter Ukraine through aState trading entity?
Reply 76.
Atpresent,3.7thousandtradeandpubliccateringenterprisesareprivatized(totalvalueamounted
to1,009.2 bln.karb., including 281.3 bln.karb. through privatization certificates. Alarge number
ofthetrade andpublic catering enterprises (upto20percent) have been leased with thepossibility
ofredemptiontoownership.YettheResolutionoftheCabinetofMinistersNo.604of31August1994,
"On Perfection oftheMechanism ofPrivatization inUkraine andStrengthening ofControl Over Its
Implementation" suspended theprivatization ofthetrade enterprises.
Allowing foranincomplete privatization (20percent) carried outin1994 andthefactthat
theprivatization programme for1995 hasnotbeen adopted yet,itisnotpossible topredict thedate
ofcompletion ofprivatization.
ForJanuary-June 1994 State owned trading enterprises accounted forabout 8.5percent of
total exports atUS$200 million. Adding trade byentities granted exclusive orspecial privileges to
engage intrade raises thisnumber toabout 12percent. Thepercentage oftotal imports through State
trading entities isnotmore than 15percent.
Question 111n.
--Forthemost part, theresponses toMembers questions onthescope andnature ofState trading
operations intheUkraine required further specification. Forexample, thereply toquestion 76indicates
thatexports byState trading enterprises were approximately 8.5percentofthetotal during thefirst
sixmonths of1994. Designated trade brought thatupto12percent.
--This does notseem toconform toourunderstanding ofthecurrent importance ofsuch firms
inUkrainian trade, nortothestatement inreply 169 that inNovember andDecember 1994,
80-100 percent ofexport contracts were barter operations.
--Wewillneed much more specific information ontheoperation ofUkraine 'sState trading
enterprises, including information supporting theconcept thatthese enterprises operate independently
ofthegovernment.
Reply 111n.
Atpresent inUkraine there arenolonger anyState runenterprises andalllegislation, onthe
basis ofwhich these enterprises hadoperated andreceived privileges andsupport, hasbeen revoked.
Government-owned enterprises operate inUkraine under thesame conditions asprivate enterprises,WT/ACC/UKR/7
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thatisindependently oftheState. Government Ministries may provide guidelines andassistance to
theenterprises, especially inlegal matters, butthey exercise nocontrol.
Question 112n.
Ukrainereportsthat,"theobjectiveonStateorder(s)istofulfilgovernmentaltradecommitments
resulting from inter-governmental agreements." Wewillbeinterested tolearn about theplanned role
ofagricultural State trading entities.
Reply 112n.
Agricultural State entities areinvolved with “governmental trade commitments resulting from
inter-governmental agreements ”only totheextent thatUkraine sagreements fortheimportation of
oilandgasaregenerally tiedtoitsexports ofgrain. Negotiations between agricultural entities and
thegovernmentleadtoagreementsbetweenthemwhichstipulatetheamountofgrainthatthegovernment
willbuy, atmarket prices, inorder topurchase foreign energy supplies and/or ensure adequate food
reserves forthepopulation.
Question 113n.
Please discuss indetail howUkraine 'sState trading enterprises willoperate under Article XVII
(GATT 1994) andtheUnderstanding onitsImplementation.
Reply 113n.
SeeReply 111n.
Question 114n.
--Wewould appreciate Ukraine 'sassistance inclarifying issues related toitsresponse to
question 141.
Reply 114n.
Concerning Reply 141:
1. Management ofsovkhozes -please seeReply 118n.
2. ListofState Trading Enterprises -please seeReply 116n.
3. Mechanism fordetermining wholesales andretail prices -market forces
4. Mechanism fordetermining government purchase prices -market forces
5. Governmentinvolvementininternalsale,offeringforsale,purchase,transportation,distribution
oruseofmajor agricultural commodities -government provides expertise butnodirect control
orfinancial assistance
With respect toitems 3.and4.,above, “indicative prices ”areineffect forgrains. However,
these arerecommended rather thanmandatory prices andtheyarebased oninternational market prices.WT/ACC/UKR/7
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Question 115n.
Werequest thatUkraine prepare alistofState owned entities thateither have amonopoly trade
position orenjoy other special orexclusive benefits inthetrade sector.
Reply 115n.
There arenogovernment-owned enterprises inUkraine which have amonopoly intrading or
which enjoy special orexclusive privileges indomestic orinternational markets. They operate under
thesame conditions asprivate enterprises orenterprises with other forms ofownership.
Question 116n.
There istheexpectation thatUkraine shall notify these entities under Article XVII, andtoreport
ontheir trading activities.
Reply 116n.
ThelistofState industrial andagricultural trade enterprises isprovided below. However, one
should notethatnone ofthem have theright toreceive anyprivileges orspecial support from theState,
compared toother enterprises inthemarket.
Ukrtekhagroservis exports -agricultural products
imports -agricultural equipment -70%
-fuelandlubricants -20%
Ukrprodresursyrovyna exports -dairy andmeat products
imports -material andtechnical supplies fortheprocessing industry -30%
Ukragrokhim exports -agricultural products
imports -herbicides andpesticides -70%
Ninety-one industrial complexes wholesaling andretailing fruit andvegetables:
exports -potatoes
-fruit
-vegetables
imports -fruit -5%
-vegetables
Question 117n.
Please provide afullresponse toquestion 141.
Reply 117n.
SeeReply 114n.WT/ACC/UKR/7
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Question 118n.
Inprovidingtheadditionalinformationinresponsetoquestion141thatisnotcurrentlyprovided,
please further describe management ofthe"sovkhozes" andtheformation ofvarious prices asoriginally
discussed inthequestion.
Reply 118n.
TheState farms, which aregovernment property, areenterprises whose assets andmeans of
production areState-owned. Allemployees atState farms arehired workers. According toArticle 27
oftheLaw ofUkraine onenterprises, intervention ofState bodies inthework ofenterprises isnot
permitted.
Government bodies provide credits andmaterial andtechnical supplies toState farms onthe
basis ofacontract bywhich State farms provide their production totheState inaccordance with the
generally applied procedures.
Each State farm isdirected byagroup ofprofessionals, which includes adirector andspecialists
inagricultural machinery, farm management specialists, economists, accountants andadministrators.
Thetotal number ofdirectors andspecialists intheState agricultural sector in1989 wasapproximately
200,000 people. This wasapproximately 4percent ofthetotal number ofemployees intheState
agricultural sector, or,inother words, approximately 20specialists pereach large enterprise. The
group ofspecialists isresponsible forplanning production andfortheassignment ofemployees and
investment ofcapital intheenterprise. This group should alsofulfil amanagement function, similar
tothose, fulfilled byanylarge agricultural complex. Thespecialists aregraduates ofagricultural,
technical, andeconomic institutes andtheyprovide theknow-how, which isusually provided tofarmers
inwestern countries from extension courses andindustry. Atpresent, theoutput ofState farms is
their own property anditmay besold atmarket value totheState ortoother consumers.
Question 119n.
WhatistherelationshipbetweenthelistofStateenterprisesinreply141andthelistinreply307?
Reply 119n.
Reply 141concerns theListofState-Trading Enterprises bythebeginning of1994, inReply 307
State entities andtheir subordinate organizations, which were authorized toconclude State contracts
with enterprises producing exports, arelisted.
Question 120n.
--Reply 340seems toState thatUkraine acknowledges thatitsState trading enterprises do
not,asyet,conform toArticle XVII oftheGATT 1994.
What does Ukraine propose todotoensure thatitsenterprises operate within these provisions?
Reply 120n.
No. Also seeReply 111n.WT/ACC/UKR/7
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Special Economic Zones
Question 80.
Please describe anygovernment support, State aids, taxandfiscal incentives, orother measures
designed toencourage investment andproduction inspecial economic zones (SEZs). Arethese benefits
contingent onexport? Arefirms inSEZs subject toforeign exchange balancing requirements? Are
firms inSEZs subject toforeign exchange import substitution ordomestic content requirements? How
aredomestic sales from SEZs taxed? What aretheapplicable taxrates? Aredomestic sales from SEZs
subject totaxes thatnon-SEZ domestic sales arenot? Ifso,please describe these taxes.
Reply 80.
Actually, atpresent there arenospecial economic zones.
Question 121n.
--Theresponses toquestions 211, 212, and318seem toindicate thatgoods produced in
Ukraine 'sspecial economic zones (SEZs) would beeligible forsaleintotheterritory ofUkraine without
further application oftariffs orother import requirements. (Note: This could disadvantage imports
toUkraine from other sources, inthatSEZ goods were produced withimported inputs subject toreduced
ornonexisting tariffs andother barriers.)
CanUkraine clarify theterms under which such trade would take place?
Reply 121n.
Anareawithin thecustoms territory ofUkraine which wishes toapply forstatus asaspecial
economiczonemustsubmitanindividualproposalspecifyingtheparticulartaxand/orcustomsincentives
requested. Aproposal which creates disadvantages such astheonedescribed inyour question would
notbeaccepted. Indeed noproposal hasbeen accepted thus far.
Question 122n.
--Questions 312-317 seekinformation onprovisions forSEZ policies inUkraine ifsuch special
regimes areeversetup.While werecognize thatUkraine does notyethave anySEZs inplace, itwould
beuseful iftheWorking Party could have information onprovisions fortheprospective institutions.
Reply 122n.
Asindicated above, each proposal foranSEZ isjudged individually, based inthequality of
thesubmission andwhether thecreation oftheproposed SEZ would beofoverall benefit toUkraine.
Asubmissionforthecreationofan"experimentalSEZ"inthenorthernCrimeahasalreadybeenreceived
andtwoothers areexpected bytheendofSeptember, butatpresent there arenoprovisions even at
thestage ofserious consideration.WT/ACC/UKR/7
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TRIPS
Question 81.
How does Ukraine 'scurrent regulation andenforcement ofIPRmatch WTO requirements?
Reply 81.
SeeReply 83.
Question 82.
What subject matter isexcluded from patentability under Ukrainian law?
Reply 82.
Incompliance with theLaw "On Protection ofRights onInventions andUseful Models"
(Article 3,clause 3)thefollowing subject matters areexcluded from patentability:
-discoveries, scientific theories andmathematical methods;
-economy organization andmanagement methods;
-plans, conventional signs, schedules, rules; methods ofmental operation ;
-computer programs;
-artistic design results;
-layouts ofintegrated circuits;
-plant varieties andanimal breeds;
Question 83.
IsUkrainian lawcurrently inconformity with theTRIPS agreement? Ifnot,what plans does
Ukraine have tobring itssystem intoconformity, andinwhat time frame?
Reply 83.
Thecurrent Ukrainian patent legislation isbased ontheModel Patent Law, which wasdeveloped
bytheWorld Intellectual Property Organization. It,asawhole, complies with theconditions ofTrade-
Related Aspects Agreement. TheLaw contains anarticle oninternational agreements, according to
which iftherules, established byaninternational agreement ofUkraine differ from therules, established
byUkrainian legislation, then theinternationally agreed rules areapplied (Article 3).WT/ACC/UKR/7
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Question 84.
Does Ukrainian patent lawprovide alltherights listed inArticle 28ofTRIPs with respect to
product andprocess patents? Ifnot,what rights arenotavailable?
Reply 84.
TheLaw provides granting ofalltherights, which arecited inArticle 28ofTrade-Related
Aspects Agreement (Article 23).
Question 85.
Arethere anyrestrictions onapatent owner 'srights toassign, transfer, licence rights under
apatent?
Reply 85.
There arenorestrictions onapatent owner 'sright toassign andtransfer rights.
Question 86.
Under what conditions may compulsory licences, including those forusebythegovernment
orthird parties authorized bythegovernment, begranted? Will modifications beneeded toimplement
theprovisions outlined inArticle 31ofTRIPs?
Reply 86.
Apatent owner isobliged togrant anallowance (tgrant alicence) foruseofaninvention
(oruseful model) toanowner ofalater-dated patent, iftheinvention (oruseful model) ofthelatter
isdesigned toachieve another purpose orpossesses substantial technological-economic advantages and
cannot beused without infringement ofthefirstowner 'srights. Atthis, granting ofsuch anallowance
maybeconditioned byappropriate allowance from thelater-dated patent owner 'sside, which isobliged
togrant anallowance, ifhisinvention (useful model) improves theinvention (useful model) ofthe
earlier patent owner orisdesigned toachieve thesame purpose. Theallowance isgranted inthescope
essential foruseoftheinvention (useful model) bythepatent owner, which demanded suchanallowance.
Disputes regarding licences aresettled judicially.
Ukrainian regulations toimplement theprovisions, described inArticle 31ofTrade-Related
Aspects Agreement, need nochanges.
Question 87.
What isthesizeoftheexamining core inUkraine 'sPatent Office? How many applications
aresubmitted annually? What istheaverage pendency period foranapplication?WT/ACC/UKR/7
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Reply 87.
Examination ofapplications forgranting apatent inUkraine forinventions anduseful models
isexecuted bythePatent Examination Centre (PEC),consisting of40-staff persons. Patents (patent
deeds) areexecuted andissued bytheRegister Board oftheState Patent Office ofUkraine.
309patent applications were filed in1992, 10,596 in1993, 12,718 in1994. Actually thePEC
does notyetexecute examinations. Application examination isconducted within 8to10months.
*Question 88.
How many patents have been issued todate? Inwhat technological categories?
Reply 88.
Atthistime about 7,200 patents forinventions areregistered.
Question 89.
How long hasthepatent office been inoperation?
Reply 89.
TheState Patent Office ofUkraine isinoperation since thebeginning of1992.
Question 90.
What opportunities exist forjudicial review ofadecision torevoke apatent, asrequired by
Article 32ofTRIPs?
Reply 90.
Opportunities forjudicial review ofpatent revocation arestated inArticles 28and30ofthe
Law: Article 28. "Patent revocation.
1.Apatent may berevoked fully orpartially inacase of:
disparity between patented invention (useful model) andconditions forpatentability, defined bythis
Law;
presence offeatures ininvention (useful model) claims, which were absent intheapplication
filed;
infringement ofclause 2,article 32ofthisLaw.
2.Any person iseligible tosubmit objection against apatent totheAppeal Council during
sixmonths after patent grant notice publication date. Itmust beexamined intheAppeal Council during
sixmonths after thedateitwasreceived. Apatent owner must beacquainted with theobjection. The
Appeal Council examines theobjection intheframes ofreasons stated init.Theperson, which submittedWT/ACC/UKR/7
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anobjection, aswellasthepatent owner mayparticipate initsexamination. TheAppeal Council verdict
may beappealed judicially.
Ifobjection against patent granting wasnotreceived intheAppeal Council during theterm
stated, thepatent may berevoked judicially only.
Thepatent oritspart, which arerevoked, areconsidered asvoid from thepatent grant notice
publication date".
"Article 30.Disputes settled judicially.
1.Thedisputes, related toapplication ofthisLaw, aresettled byacourt, oracourt ofarbitration
asitisestablished byUkrainian legislation.
2.Courts, according totheir jurisdiction, examine thedisputes concerning: authorship to
invention (useful model);determination ofpatent owner; infringement ofpatent owner 'sproperty rights;
entering and execution oflicence agreements; right forprevious use; inventor remuneration;
recompenses.
Courts examine alsoother disputes, related toprotection ofrights, given bythisLaw".
Question 91.
PleaseprovideadescriptionofUkraine'slawsoncopyrightprotection.Whatworksarecovered?
What istheterm ofprotection? Iscopyright protection afforded onanational treatment basis, and,
ifitisnot,what aretheexceptions?
Reply 91.
Ukraine 'sLaw "On Copyright andAssociated Rights" passed bytheSupreme Rada on
23December 1993, wasenforced onthedayofitspublication, 23February 1994, andwon practical
approval oftheWorld Intellectual Property Organization (WIPO).
InCompliance with Article 5ofthesaidLaw, protection isprovided forworks ofscience,
literature andarts, including:
1. written literary works offictional, scientific, technical orpractical nature (books, booklets,
articles, computer programs etc.);
2. orations, lectures, speeches, sermons andother oralworks;
3. musical works with orwithout words;
4. dramatic andmusical dramatic works, pantomimes, works ofchoreography andother works
created forstage presentation;
5. audio-visual works;
6. sculptures, paintings, drawings, engravings andother pictorial works ofart;WT/ACC/UKR/7
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7. architectural works;
8. photographs;
9. works ofapplied artifthey arenotprotected byaspecial lawonindustrial property;
10. illustrations,maps,plans,sketches,plasticworkspertainingtogeography,geology,topography,
architecture andother branches ofscience;
11. adaptation forthestage ofworks mentioned inpar.1 ofthisArticle andreworking offolklore
fortheatrical performance;
12. translations, adaptations, arrangements andother kinds ofremaking orworks and(derivative
productions) without detriment totheprotection oforiginal works serving asabasis forsuch works;
13. collectionsofworks,collectionsoffolkloreadaptations,encyclopediasandanthologies,collections
ofcommon dataincluding thedatabases andother composite works, provided they aretheresult
ofcreative effort aimed atselecting, adjusting orregulating thecontents without detriment to
theprotection ofworks contained therein;
14. other works.
ThesaidLaw protects both published andunpublished works ofscience, literature andarts,
irrespective oftheir purpose, genre, quality, sizeandaim(education, information, popularization,
entertainment etc.), andthemethod ofreproduction inoral, written oranyother form.
Incompliance with Article 24ofthisLaw, copyright protection isensured during thewhole
oftheauthor 'slifeand50years after his/her death.
Copyright isgranted onanational basis. Inkeeping withArticle 8,theauthor 'sright isprotected
irrespective ofcitizenship andresidence, ifhis/her works have been first published orunpublished
butarepresent inanobjective form intheterritory ofUkraine.
Question 92.
Does Ukraine plan tojointheBerne Convention? What changes inthecopyright lawwould
have tobemade tomeet therequirements oftheBerne Convention?
Reply 92.
Ukraine isplanning tojoin theBerne Convention onProtection ofLiterary andArtistic
Works. The problem had been discussed with theWIPO which resolved that Ukraine 'sLaw
"On Copyright andAssociated Rights" wasfully inline with theBerne Convention requirements.
Ukraine 'sState Agency forCopyright andAssociated Rights (SACAR) has prepared material
forUkraine 'saccession totheBerne Convention; thematerial isbeing studied bytheForeign Ministry
andwillthen besubmitted forconsideration bythePresident and Supreme Rada.WT/ACC/UKR/7
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Question 93.
What changes inUkraine 'scopyright laws would beneeded tomeet therequirements ofthe
TRIPS agreement? What isthestatus ofefforts tobring Ukraine 'slawintocompliance with TRIPS?
Reply 93.
TheUkraine 'sLaw "OnCopyright andAssociated Rights" meets therequirements stipulated
byChapter I,partII,oftheAgreement onTrade Related Aspects ofIntellectual Property Rights (TRIPs).
Question 94.
What system isinplace nowfortheenforcement ofcopyright, inboth civil andcriminal law?
What istheaverage time frame forlitigations ofcopyright infringement suits?
Reply 94
On4February 1994, theSupreme Rada adopted theLaw "On Introduction ofChanges in
theCivil Code oftheUkrainian RSR" which effected thefollowing amendments totheCivil Code:
"Article 472. Ukraine 'sLegislation onCopyright andAssociated Rights.
TheLaw ofUkraine protects personal (non-property) andproperty rights ofauthors andtheir
legal successors, related tothecreation andutilization oftheworks ofscience, literature andarts
(copyright)andtherightsofperformers,phonogrammanufacturersandbroadcastingagencies(associated
rights).
Relations promoted bythecreation andutilization oftheobjects ofcopyright andassociated
rights areregulated bytheUkraine 'sLaw "OnCopyright andAssociated Rights" andother legislative
actsofUkraine".
Inview ofthepreparation oftheUkraine 'snew Criminal Code, on20January 1994, the
Ukraine 'sSACAR submitted totheAttorney General ofUkraine aproposal toformulate Article 136
oftheUkraine 'sCriminal Code inforce inthefollowing way:
"Article 136. Violation ofCopyright andAssociated Rights.
Unlawful reproduction ofworks andobjects ofassociated rights (counterfeiting), compulsive authorship,
misappropriation ofauthorship (plagiarism) arepunishable byupto5-year imprisonment orafine
between 100and50,000 salaries established bytheUkraine 'slegislation".
Court proceedings against violation ofcopyright takeup4to5months ontheaverage, while
consideration ofcases involving additional expertise lasts nearly oneyear.
Question 95.
How aresound recordings, data base compilations, andcomputer software protected?WT/ACC/UKR/7
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Reply 95.
Incompliance withArticle 34ofthesaidLaw, manufacturers ofphonogram have anexclusive
right toallow orprohibit their reproduction, distribution ofcopies bywayoffirstsaleorother kind
ofalienation, orbyleasing, hiring out, rental andother means oftransfer, regardless offirst sale,
aswell asalteration andimport ofphonogram.
Article 37oftheLaw regulates theuseofphonogram issued forcommercial use. Such
phonogram maybeutilized without theconsent oftheir manufacturers orperformers recorded therein
butwith dueremuneration incase of:
1. public useofphonogram;
2. broadcast ofphonogram;
3. transmission ofphonogram bywire.
Thecollection, distribution andpayment ofremuneration areeffected byoneoftheagencies
controlling therights ofprogramme manufacturers andperformers onacollective basis incompliance
with theagreements between such agencies.
Theamount ofremuneration andtheterms ofpayment arespecified byanagreement between
theuser ofphonogram oranassociation ofsuch users ontheonehand andtheagencies controlling
therights ofprogramme manufacturers andperformers ontheother hand.
Thesizeofremuneration issetforeach kind ofphonogram application.
Incompliance with theDirective oftheCEC (Council oftheEuropean Communities) onLegal
Protection ofComputer programs asof14May 1991, Article 5oftheUkraine 'sLaw "OnCopyright
andAssociated Rights" stipulates thatdatabases andcomputer programs betreated with dueregard
totherequirements ofthesaidCEC Directive.
Question 96.
How does Ukraine 'slawtreat rental rights? What works aresubject totherequirement that
authors andtheir successors intitlemay authorize orprohibit thecommercial rental oforiginals or
copies oftheir works?
Reply 96.
TheUkraine 'sLaw contains nosuch concept as"leasing rights". Instead, Article 4uses the
term "hiring out", meaning that"ownership rights" totheoriginal orcopy ofawork orphonogram
maybetransferred foracertain period with theaimofderiving direct orindirect commercial benefit.
Used inthesame Article istheterm "person inpossession ofcopyright andassociated rights" implying
"anauthor orperformer intheevent thatproperty rights arepossessed bytheauthor orperformer,
aswell asaphysical orlegal entity towhich property rights have been transferred".
Article 27oftheLaw speaks ofthetransfer (cession) ofcopyright: "Property rights may be
transferred (ceded) bytheauthor oranother person inpossession ofcopyright toanother person. TheWT/ACC/UKR/7
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author oranother person inpossession ofcopyright (licensor) mayalsogivealicence toanother person
(licensee) fortheuseofthework inaccordance with such alicence. Thetransfer (cession) ofcopyright
andtheissue ofalicence aretobeofficially registered inacopyright agreement".
Question 97.
What isthescope ofcompulsory licensing ofcopyrightable works? Under what conditions
would compulsory licences begranted?
Reply 97.
Article 39oftheUkraine 'sLaw makes aprovision foracollective control ofproperty rights:
"Tosecure property rights authors andpersons may entrust control oftheir property rights ona
collective basis toagencies notauthorized toengage incommercial activities. "Such agencies operate
onthebasis andwithin theframework ofauthority voluntarily delegated tothem byauthors andother
personsinpossessionofcopyrightandassociatedrights".Theactivitiesofagenciesincontrolofproperty
rights onacollective basis arespecified inArticle 40oftheLaw, which, among other things, says
that: "Agencies which control property rights onacollective basis maybeauthorized toissue licences
tousers ofworks andobjects ofassociated rights".
"Allclaimsofownershipthatmaybelodgedbypersonsinpossessionofcopyrightandassociated
rights against users asregards utilization oflicences aretobeconsidered byagencies which issue
such licences."
Question 98.
What changes inUkrainian lawarenecessary forcompliance withTRIPs trademark obligations?
When willsuch changes bemade?
Reply 98.
The Law "OnTrademark Right Protection". TheLaw wasexamined intheWorld Intellectual
Property Organization (WIPO) andasawhole complies with theTrade-Related Aspects. Amendments
totheLawarenotcurrentlyexpected.Inaddition,theLawincludesanarticleoninternationalagreements
(Article 3),according towhich iftherules, established byinternational agreement ofUkraine, differ
from therules, which areprovided bytheUkrainian legislation, therules ofinternational agreement
areused.
Question 99.
Towhat extent dowell-known marks receive protection under theexisting law, andfuture
amendments, ifany? What isthedefinition andscope ofprotection ofawell-known mark?
Reply 99.
Well-known trademarks receive protection according toArticle 6oftheLaw: "Article 6.
Grounds forrefusal inprotection oftherights".WT/ACC/UKR/7
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Question 100.
Towhat extent does awell-known mark notregistered inUkraine receive protection? What
specific rights does theowner ofanunregistered mark have?
Reply 100.
Amark cannot beregistered asatrademark, ifitisidentical orsimilar totheextent, thatit
may beconfused, with:
- themarks, registered earlier orsubmitted forregistration inUkraine under another
person 'sname forsimilar goods andservices;
- marks ofother persons, ifthismarks areprotected without registration onthebase
ofinternational agreements, where Ukraine isaparticipant;
- firm-names, which arewell-known inUkraine andbelong toother persons, which
obtained their rights before theapplication wassubmitted totheOffice about similar
goods andservices;
- appellation oforigin, except forcases, when they areincluded intothemark asnon-
protected elements andareregistered byperson 'sname, which have theright touse
thisname;
- certificate marks, registered asrequired"
Protection ofworld-known marks notregistered inUkraine isaccomplished according tothe
Ukrainian Law "On Restriction ofMonopolism andPrevention ofUnfair Competition" (Article 7)
Question 101.
What istheroleoftheTrademark Registrar ininfringement actions? Ishisapproval/opinion
required?
Reply 101.
Anauthorized executive body, being informed bytheState Patent Office ofUkraine about
thesaidinfringements, may useactions listed inArticle 164of"Ukrainian Code onAdministrative
Infringements", according towhich "illegitimate useofinvention, process patent, industrial design,
trademark, service mark, collective trademark, firm-naming ormarking ofgoods entails afineofup
tofifty minimum salaries with forfeiture ofthegoods produced, instruments ofproduction andraw
materials orwithout it".
According totheUkrainian Cabinet Decree thefineismade 10time higher.
Question 102.
What arethegrounds onwhich theregistrar may refuse toregister amark?WT/ACC/UKR/7
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Reply 102.
Thegrounds fortherefusal ofmark registration may bedisparity between themark andthe
conditions forright protection granting, which areoutlined inArticle 5(Clause 1)aswellasthegrounds,
putforth inArticle 6.
"Article 5.Conditions forgranting right protection
1.Right protection isgranted tothemark, which does notcontradict public interests, principles
ofhumanityandmoralsandwhichdoesnotfallunderthegroundsforrefusalingrantingrightprotection,
established bythislaw."
"Article 6.Grounds forrefusal ingranting right protection
1.According tothisLaw thesigns, thatcould notbegranted right protection, depict:
State insignias, flags andemblems;
official names ofStates;
emblems, abbreviated orfullnames ofinternational intergovernmental organizations;
official control, guarantee andassay marks, stamps;
decorations andother distinctions.
Such signs may beintroduced intothemark asnon-protected elements, ifthere isaconsent
ofproper authority ortheir owners.
2.According tothisLaw thesigns which alsocould notbegranted right protection, arethe
ones, which:
have nodistinctive ability;
arewidely used formarking ofgoods andservices ofsome kind;
indicate kind, quality, quantity, properties, purpose, value ofgoods andservices aswell as
place andtime ofgood production orsaleorgiving service;
aredeceptive ormay cause deception regarding goods, service orperson, which produces the
goods andprovides services;
arecommonly used assymbols andterms.
Thesigns from paragraphs 2,3,4,6ofthisclause may beintroduced intoamark asnon-
protected elements, ifthey donotdominate inthemark depiction.
3.Amark cannot beregistered asatrademark, ifitisidentical orsimilar totheextent, that
itmay beconfused, with:
marks, which were registered earlier orsubmitted forregistration inUkraine under another
person 'sname forsimilar goods andservices;
marks ofother persons, ifthese marks areprotected without registration onbaseofinternational
agreements, where Ukraine isaparticipant;
firm-names, which arewell-known inUkraine andbelong toother persons, which obtained
their rights before theapplication wassubmitted totheOffice forsimilar goods andservices;WT/ACC/UKR/7
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appellation oforigin, except forcases, when they areincluded intoamark asnon-protected
elements andareregistered under person 'sname, which have right tousethese names; certificate marks,
registered inproper order."
4.Signs. which reproduce thefollowing, arenotregistered asmarks:
industrial designs, rights onwhich belong toother persons inUkraine;
names ofwell-known inUkraine works ofscience, literature andartorquotations andcharacters
from them, works ofartandtheir fragments without consent ofcopyright owners ortheir subsequent
owners;
surnames,names,pseudonymsandderivativesfromthem,portraitsandfacsimileofwell-known
persons inUkraine without their consent."
Question 103.
Arethere minimum/maximum limits onpenalties fortrademark infringement?
Reply 103. *
SeeClause 4,Section IIofthisAddenda.
Question 104.
Does registration ofamark satisfy notice oftheexclusive right oftheright holder topotential
infringers? Does aright holder have togive actual notice toaninfringer before theinfringer isliable?
Orisregistration ofthemark sufficient?
Reply 104.
These questions areregulated byArticles 12and15oftheLaw:
"Article 12.Publications about certificate issue
1.TheOffice publishes initsofficial bulletin notices, defined byit,about certificate issue on
base ofdecision about mark registration andifthere isadocument about payment ofcertificate issue
duties.
Ifthedocument about payment ofcertificate issue duties isnotreceived bytheOffice during
three months after thedate onwhich anapplicant received decision about certificate issue, then
publication isnotimplemented andapplication isconsidered recalled.
2.After notice publication about certificate issue anyperson iseligible tobeacquainted with
application materials inaway, thatisdetermined bytheOffice."
"Article 16.Rights implied bycertificateWT/ACC/UKR/7
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3.Certificate gives toitsholder right tobanforother persons touseregistered mark without
hisconsent, except forcases, when according tothisLaw using ofmark isnotconsidered tobe
infringement ofcertificate holder 'srights."
Question 105.
Forwhat period oftime aretrademark registrations valid? May registration berenewed
indefinitely?
Reply 105.
This question isregulated byArticle 5:
"Article 5.Conditions ofthegranting ofright protection
Mark ownership iscertified bycertificate. Duration ofcertificate is10years after date of
application submission totheOffice andisextended bytheOffice onholder 'sapplication, submitted
during thelastyear ofcertificate duration, every time for10years. Theprocedure forextension of
certificate term isestablished bytheOffice. Effect ofcertificate isterminated before itsterm under
conditions, listed inArticle 18ofthisLaw."
Question 106.
Does Ukrainian lawcontain auserequirement tomaintain trademark rights?
Reply 106.
This question isregulated byArticle 17:
"Article 17.Duties implied bycertificate
Certificate holder isobliged tofairly useexclusive right, implied bycertificate. Ifamark
isnotused orisnotsufficiently used inUkraine during three years after certificate issue notice
publication dateorafter date, when mark usewasterminated, anyperson may turntoacourt (court
ofarbitration) with anapplication about termination ofcertificate effect before itsterm.
When examining thisquestion acourt (court ofarbitration) may take intoconsideration the
certificate holder 'sproofs, thatthemark wasnotused owing tocircumstances beyond hiscontrol."
Question 107.
Does Ukrainian lawallow forregistration ofidentical orsimilar marks forthesame orrelated
goods todifferent parties?
Reply 107.
No,itdoes not.These questions areregulated byArticle 6(Clauses 2,3):WT/ACC/UKR/7
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"Article 6.Grounds forrefusal ingranting right protection. According tothisLaw thesigns,
which alsocannot begranted right protection aretheones, which:
have nodistinctive ability;
arewidely used formarking ofgoods andservices ofsome kind;
indicate kind, quality, quantity, properties, purpose, value ofgoods andservices aswell as
place andtime ofgood production orsaleorgiving service;
aredeceptive ormay cause deception regarding goods, service orperson, which produces the
goods andgives services;
arecommonly used assymbols andterms.
Thesigns from paragraphs 2,3,4,6ofthisclause may beintroduced intoamark asnon-
protected elements, ifthey donotdominate inthemark depiction.
Amark could notberegistered asatrademark, ifitisidentical orsimilar totheextent, that
itmay beconfused, with:
marks, which were registered earlier orsubmitted forregistration inUkraine under another
person 'sname forsimilar goods andservices;
marks ofother persons, ifthese marks areprotected without registration onbaseofinternational
agreements, where Ukraine isaparticipant;
firm-names, which arewell-known inUkraine andbelong toother persons, which obtained
their rights before theapplication wassubmitted totheOffice about similar goods andservices;
appellation oforigin, except forcases, when they areincluded intoamark asnon-protected
elements andareregistered under person 'sname, which have theright tousethese names;
certificate marks, registered inproper way."
Question 108.
Istherecordation ofanassignment mandatory? Ifso,what aretheramifications ofnotrecording
anassignment?
Reply 108.
Yes,rightassignmentrecordationismandatory(Article16,Clause6):"Article16.Rightsimplied
bythecertificate".
Mark ownership assignment contract andlicence contract areconsidered tobevalid ifthey
arecomposed inwriting andaresigned byparties. Said contracts enter intoforce regarding anyother
person after their recordation intheOffice only.
Question 109.
Towhat extent may decisions ofthetrademark registrar beappealed inacourt oflaw?
Reply 109.
Decisions may beappealed according toarticle 19,clause 2:WT/ACC/UKR/7
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"Article 19.Certificate revocation
Any person may submit objection against certificate issue totheAppeal Council during six
month after certificate issue notice publication date. Theobjection must beexamined bytheAppeal
Council during sixmonths after itisreceived. Certificate holder must beacquainted with theobjection.
TheAppeal Council examines theobjection inframes ofreasons, stated init.Theperson, whosubjected
theobjection aswell asacertificate holder may participate initsexamination. TheAppeal Council
decision may beappealed judicially.
Iftheobjection against certificate issue wasnotreceived bytheAppeal Council during specified
term, thecertificate may berevoked judicially only.
Revoked certificate oritspartareconsidered void from application filing date.
Question 110.
What form ofprotection does Ukraine provide forindustrial designs? Does itexpect tomake
anymodifications toitslaws toimplement theindustrial design provisions ofTRIPs?
Reply 110.
Under theUkrainian Law "OnIndustrial Design Right Protection" theownership ofindustrial
design iscertified bypatent.
Theduration ofanindustrial design patent is10years from thedateofapplication filing to
theOffice andisextended bytheOffice onpatent owner 'sapplication, butfornotmore thanfiveyears
(Article 5,Clause 5).
TheUkrainian Law wasexamined bytheWorld Intellectual Property Organization (WIPO)
andcomplies asawhole with theTrade-Related Aspects. Amendments totheLaw arenotcurrently
expected.
Question 111.
DoesUkrainenowprotectlayoutdesigns?ArethereanychangesnecessarytoimplementTRIPs?
(Including obligations oncompulsory licensing, border control androyalties) Inwhat form isthis
protection provided?
Reply 111.
Incompliance with theLaw "On Protection ofRights onInventions andUseful Models"
(Article 3,clause 3)thefollowing subject matters areexcluded from patentability: layout designs.
This surely willrequire appropriate amendments inimplementing theTRIPs obligations.
Question 112.
Does Ukraine provide thefullrange ofrelief required byTRIPs, including injunctive relief,
damages, seizure anddestruction ofinfringing goods, provisional relief, border relief andcriminalWT/ACC/UKR/7
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sanctions? Ineach case, indicate under what lawsuch protection isprovided, andwhether amendments
willberequired tofully implement Articles 41-61 ofTRIPs?
Reply 112.
SeeReplies 86and90.
Question 113.
Does Ukraine protect trade secrets? Ifso,inwhat form? Arechanges necessary toimplement
theTRIPs obligations?
Reply 113.
Yesitdoes. Incompliance with theLaw ofUkraine "OnCommercial Secrets" and theLaw
ofUkraine"OnEnterprisesinUkraine"of18September1992(Article30),theprotectionofcommercial
secrets makes anintegral part ofthecomplex ofsecurity measures foraparticular enterprise. A
commercial secret isunderstood tobethedataontrade activities allowing certain preferences. Such
datashould beinpossession ofaprivate person. Exceptions aremade bythedatamaking upaState
secret, aswell assubjects ofintellectual property protected bythepatent andcopyright laws.
Question 114.
Does Ukraine have anylaws thatwould fallintotheanti-competitive practices provisions of
Article 40ofTRIPs? Ifso,please specify?
Reply 114.
Noitdoes not.
Question 115.
Arethere anyrestrictions onthelicensing ofintellectual property, oneither domestic orforeign
nationals?
Reply 115.
There arenosuch restrictions.
Question 123n.
--IntheresponsetoquestionNo.92,UkrainestateditwasplanningtojointheBerneConvention
onProtection ofLiterary andArtistic Works.
Inthediscussions with theWIPO, what measure must Ukraine undertake tojointheBerne
Convention?WT/ACC/UKR/7
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Reply 123n.
SeeReply 124n. -132n.
Question 124n.
--From thisresponse, weunderstand thatUkraine 'sState Agency forCopyright andAssociated
Rights hasprepared material forUkraine 'saccession totheBerne Convention.
What isthetime frame forUkraine joining theBerne Convention? When willthematerial
prepared byUkraine 'sState Agency forCopyright andAssociated Rights beconsidered bythePresident
andSupreme Rada?
Reply 124n.
Asetofdocuments ontheaccession (aletter from theMinister ofForeign Affairs ofUkraine,
adraft ofthePresident 'sAddress totheSupreme Rada, abill, andanexplanatory note) hasbeen
submitted totheAdministration ofthePresident ofUkraine.
TheStanding Committee oftheSupreme Rada onScience andPublic Education haspassed
adecision, recommending theSupreme Rada ofUkraine toenact, in1995, theLaw ofUkraine "On
Ukraine 'sAccession totheBerne Convention fortheProtection ofLiterary andArtistic Works" (Paris
Act, 1971).
Question 125n.
--Concerning thereply toquestion No.94,weappreciate thedetails regarding Ukraine 'ssystem
forenforcement ofcopyright protection inboth civil andcriminal law.
Have anycases been prosecuted through thissystem? Ifso,how many? How many ofthese
arecomplete?
Reply 125n.
According toArticle 136oftheCriminal Code ofUkraine, publication ofauthor 'swork of
science, literature, orartunder one'sownname orother false appropriation ofauthorship, orunlawful
reproduction ordistribution ofsuch work shall bepunished bycorrective labour fortheterm ofup
tooneyear onbyafineofupto15times theamount oftheminimum wage.
According toArticle 13PartVoftheLaw ofUkraine "On Copyright andRelated Rights",
incase oftheuseofanother person 'swork without theconsent oftheowner ofthecopyright and/or
related rights; infringement oftheconditions fortheuseofcopyright andrelated rights; orinthecase
ofinfringement ofpersonal andproperty rights oftheperson owing thecopyright andrelated rights,
thecopyrightownermayappealtothecourtforrestitutionofrightsthroughpublicationoftheappropriate
corrections inthepress regarding theinfringement. Thecourt hastheright toissue adecision banning
thepublication ofawork, theperformance ofaproduction, phonogram, broadcasting over theairor
over thewire, orpreventing their distribution ortheremoval orconfiscation ofallcopies ofthework
orphonogram, andtheequipment andmaterials intended foritsproduction andreproduction, andalso
thedestruction orremoval ofallcopies ofthework orphonogram forwhich ithasbeen established,WT/ACC/UKR/7
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thatthey were produced ordistributed through theinfringement oftheexclusive rights oftheowners
ofcopyright orrelated rights. Itconcerns allmatrixes, original forms, magnetic tapes, photographic
negatives, andother objects with helpofwhich copies ofthework, phonogram, broadcast programmes
aremade, andthematerials andequipment thatareused toproduce them.
Procedures forthereimbursement oflosses duetotheinfringement ofcopyright orrelated
rights hasbeen established inArticle 44oftheaforementioned law.Inparticular, theowner ofcopyright
andrelated rights may require:
(a) thereimbursement oflosses caused asaresult ofaninfringement ofcopyright orrelated rights,
including lostprofit;
(b) repayment ofprofits received asaresult oftheinfringement ofcopyright orrelated rights to
theowner ofthecopyright orrelated rights;
(c) orpayment ofasum ofcompensation which isdetermined bythecourt from 10to50,000
times theminimum salary asestablished byUkrainian legislation.
Apart from thecompensation oflosses andreimbursement ofrevenues, thecourt may also
finetheinfringer 10percent ofthesum appointed bythecourt infavour oftheplaintiff.
Theinfringer ofcopyright orrelated rights isobliged topaytheowner ofcopyright orrelated
rights punitive damages intheamount setbythecourt.
AsindicatedinPart1,Article8,theprotectionprovidedbythislawisgiventoauthorsregardless
oftheir citizenship andforworks which arepublished forthefirsttime orremain unpublished although
they exist ontheterritory ofUkraine.
Question 126n.
--Regarding theprotection ofsound recordings, databasecompilations andcomputer software,
Ukraine States thatitcomplies withtheDirective oftheCouncil oftheEuropean Communities onLegal
Protection ofComputer programs through implementation ofArticle 5oftheUkraine 'sLaw "On
Copyright andAssociated Rights."
Please explain Ukraine 'sinterpretation oftreating databases andcomputer programs with due
regardtotherequirementsoftheCECdirective.Precisely,howdoesUkraineprotectcomputerprograms
anddatabases?
Reply 126n.
InArticle 4,Part1oftheLaw ofUkraine "OnCopyright andRelated Rights" itisindicated
thatadatabase isacompilation ofmaterials ordataprovided inaform thatismachine readable, and
acomputer program isacollection ofinstruction intheform ofwords, numbers, codes, charts, symbols,
orinanyother form, which ismachine-readable, andwhich activates itinorder toachieve acertain
goal orresult. This concept includes operational systems aswell asapplied programs expressed in
final orobjective code including preparatory materials andaudio andvisual representation received
through acomputer program. Theconcept "computer program" does notinclude theconcept "data
base".WT/ACC/UKR/7
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Further, inArticle 5,itisindicated thatworks inthearea ofscience, literature, andartare
protected bythisLaw, particularly:
1.Belle letters, scientific, technical, orinformative literature (books, pamphlets, articles,
computer programs, etc.);
...13. Collections ofworks, collections offolklore, encyclopedias andanthologies, collections
ofrealdata including data bases...
Bythismeans, computer programs anddatabases areprotected tothesame extent asworks
ofliterature, science, andart,andasinthecaseofcopyright infringement procedures forenforcement
fully apply.
Question 127n.
--Replies 99and100State thatUkraine protects world-known trademarks notregistered in
Ukraine according toUkrainian Law "On Restriction ofmonopolism andPrevention ofUnfair
Competition" (Article 7).
What isthedefinition andscope ofprotection ofawell-known mark? Please explain Article 6
"Grounds forrefusal inprotection oftherights." What aretherights ofanowner ofanunregistered
well-known?
Reply 127n.
According toArticle 3oftheLaw ofUkraine "OntheProtection ofRights toMarks forGoods
andServices" (hereinafter "the Law"), Ukraine recognizes rules ofinternational treaties, andthus
Article 6bisoftheParis Convention thatdefines theobligations ofamember-country inrespect of
well-known trademarks isalsoineffect. InArticle 6oftheLaw, itisindicated thatalegal protection
cannot beoffered tomarks thatareknown inUkraine butbelong topersons other than those owing
therights tothem.
That is,awell-known trademark willnotberegistered inanyperson 'sname other than that
oftheowner iftheletter canprove thatthismark iswell-known inUkraine. Thedecision concerning
theacknowledgement ofamark asbeing well-known, ismade byanexpert oftheScientific Research
Centre onPatent.
Presently, inUkraine there arenoexact criteria asfordefining atrademark asbeing well-known;
therefore, inmaking hisdecision, theexpert relies upon hisownsubjective understanding oftheissue.
Nonetheless, oftheowner ofawell-known mark isnotsatisfied withtheexpert decision, hemayinitiate
theappropriate appeal procedures, with theresult thatthedecision may bere-examined inthecourt.
Protection ofmarks known internationally thatarenotregistered inUkraine isinaccordance
with theLaw ofUkraine "OntheRestriction ofMonopolies andPrevention ofUnfair Competition":
"Unfair competition isrecognized astheunauthorized usage ofafirm'sname, atrademark
forgoods andservices oranyproduct marking, thecopying ofaform, packaging, external design,
andalsoimitation, copying, direct reproduction ofanother entrepreneur 'sproduct, unauthorized usageWT/ACC/UKR/7
Page 136
ofhisorhername (Article 7,according tothedraft atthesecond reading intheSupreme Rada of
Ukraine).
Incases where awell-known mark isregistered inUkraine, itsprotection does notdiffer from
theprotection offered anyother mark. Ifawell-known mark isnotregistered inUkraine, thenaccording
toArticle 6(paragraph 3)oftheLaw ofUkraine "On theProtection ofRights toMarks forGoods
andServices", acertificate forthismark willnotbeissued toanyperson who isnotitsowner.
Furthermore, awell-known mark willnotberegistered inthename ofaperson other than
theowner, even ifthegoods arenotproduced bytheowner ofthemark andnotincluded inthelist
ofgoods andservices provided inthecertification which wasissued inanother country.
Question 128n.
--Theresponse toquestion 104seems toustomean thatregistration ofamark does notsatisfy
notice oftheexclusive right oftheright holder topotential infringers unless thedocument about payment
ofcertificate issue duties isnotreceived bytheOffice three months after thedateonwhich anapplicant
received decision about certificate issue.
Isthisacorrect interpretation?
Reply 128n.
"Onthebasis ofadecision toregister amark andupon provision ofadocument attesting the
payment ofcharges fortheissuing ofcertification, theDepartment publishes information ontheissue
ofcertification defined byitinitsofficial bulletin.
Ifthedocument certifying payment ofcharges fortheissuing ofcertification hasnotbeen
received bytheDepartment within three months ofthedateoftheapplicant being notified ofthedecision
toissue certification, publication does nottakeplace andtheapplication isconsidered tobewithdrawn".
(Article 12,Paragraph 1,oftheLaw ofUkraine "On theProtection ofRights toMarks forGoods
andServices").
Infringement oftherights toamark ofcertification owners aredefined inaccordance with
Article 20oftheaforementioned Law. Theowner ofamark whose rights areviolated cansubmit
theappropriate application totheAnti-monopoly Committee ofUkraine with arequest torenew the
infringed rights. The Anti-monopoly Committee ofUkraine examines theapplication takes the
appropriate measures according totheprocedures indicated intheLaws ofUkraine "OntheRestriction
ofMonopolies andPrevention ofUnfair Competition inBusiness Activity", "OntheAnti-monopoly
Committee ofUkraine", andalso"Interim Rules fortheInvestigation ofCases ofViolation ofUkrainian
Anti-monopoly Legislation", including examination ofthecase incourt.
Theowner ofamark whose rights have been infringed may alsoapply directly tothecourt.
TheLaw ofUkraine "OntheProtection ofRights toMarks forGoods andServices" does notrequire
theowner ofthecertification toprovide written warning totheinfringer prior tocalling himorher
toaccount, except iftheowner hastheintention offiling aclaim incourt, whereupon thecertificate
owner, according torequirements ofjudicial bodies, isobliged toprovide theinfringer with written
warning oftheinfringement oftheowner 'srights tothemark.WT/ACC/UKR/7
Page 137
Usage ofamark isnotconsidered tobeaninfringement oftheowner 'srights incases when:
- thecertificate hasexpired (Article 18);
- thecertificate isdeemed invalid (Article 19);
- ownership rights toamark aretransferred onthebasis ofanagreement toanyperson
who istherightful successor ofthecertificate owner (Article 16,Paragraph 4);
- permission fortheusage ofamark isgranted toanyperson onthebasis ofalicence
agreement (Article 16,Paragraph 5).
Question 129n.
--Itappears thatitisthiscertificate thatgives theholder right tobanother persons from using
theregistered mark without hisconsent.
Please explain fortheWorking Party theprocess forholding aninfringer liable. Forexample,
does aright holder have togiveactual notice toaninfringer before theinfringer isliable? Please provide
examples ofwhen according toLaw using ofmark isnotconsidered tobeinfringement ofcertificate
holder 'srights.
Reply 129n.
SeeReply 128n. paragraphs 1,2.
Question 130n.
According toresponse toquestion 111, Ukraine, incompliance with theLaw "OnProtection
ofRights onInventions andUseful Models" excludes layout designs from patentability. According
totheresponse, Ukraine recognizes thatthislawwillrequire appropriate amendments inimplementing
theTRIPs obligations.
What isUkraine 'stimetable forcomplying with TRIPs regarding layout designs?
Reply 130n.
The current legislation ofUkraine does notpresently provide forprotection oflayout
designs/topography ofintegrated circuits. Butinaccordance with Article 65,Paragraph 3oftheTRIPs
Agreement, Ukraine, asacountry with transitional economy, hastheright toavail itself ofan
implementation period of4years forbringing legislation onintellectual property intoconformity with
TRIPs provisions. Weintend thatduring thisperiod, thelegislative actontheprotection oflayout
designs/topography ofintegrated circuits inUkraine willbedeveloped andimplemented.
Question 131n.
--Weappreciate thatUkraine haslaws inplace toprotect trade secrets.WT/ACC/UKR/7
Page 138
What procedures does Ukraine practice toprotect trade secrets? Arechanges necessary to
implement theTRIPs obligations? Please explain what ismeant bythestatement that"exceptions are
made bythedata making upaState secret, aswell assubjects ofintellectual property protected by
thepatent andcopyright laws."
Reply 131n.
Theprotection oftrade secret isnotwithin theauthority oftheState Patent Agency ofUkraine
ortheState Agency onCopyright andRelated Rights.
Itshould benoted thatanincorrect answer wasgiven toquestion 113. There isnoLaw "On
Trade Secrets" inUkraine, aswasstated incorrectly inaprevious answer.
Relations concerning theprotection oftrade secrets areregulated byArticle 30oftheLaw
ofUkraine "On Enterprises inUkraine". ThetextofthisLaw isasfollows:
"Article 30.Trade Secret ofanEnterprises
1.Atradesecretshallbeunderstoodtobedataconnectedwithproduction,technicalinformation,
management, financial andother activities ofanenterprise, thatarenotaState secret butthebroadcast
(transfer orleak) ofwhich could harm theenterprise 'sinterests.
2.Thecontents andscope ofinformation which constitute atrade secret andtheprocedures
fortheir enforcement shall bedetermined bythedirector oftheenterprise. Information thatcannot
beconsidered atrade secret shall bedetermined bytheCabinet ofMinisters ofUkraine.
3.Responsibility forthebroadcast ofinformation which constitutes atrade secret forthe
protection ofsuch information shall bedefined bylegislative actsofUkraine".
Thecriteria fortrade secrets arelisted inArticle 7oftheLaw ofUkraine "OntheRestriction
ofMonopolies andthePrevention ofUnfair Competition inBusiness Activity".
Unfaircompetitionisdefinedas"receiving,using,andbroadcastingtradesecretsandconfidential
information with thepurpose ofharming thebusiness reputation ordamaging theproperty ofanother".
Article 13,Paragraph 3ofthisLaw alsoregulates therights oftheAnti-monopoly Committee toaccess
theappropriate information:
"Information which constitutes atrade secret andwhich wasreceived bytheAnti-monopoly
Committee ofUkraine anditsTerritorial Administration, shall notbesubject tobroadcast.
Losses caused bythebroadcast ofinformation which constitutes atrade secret shall befully
compensated forbytheAnti-monopoly Committee from thegovernment budget according tothecourt 's
procedures".
TheResolution oftheCabinet ofMinisters ofUkraine "OntheListofInformation which does
notConstitute aTrade Secret" of9September 1993, No611isalsoinforce.WT/ACC/UKR/7
Page 139
Weareoftheopinion thatthere should bealaworsome other legislative actinUkraine which
should protect confidential information (including trade secrets, "know how", datatobetested, and
other information inaccordance with Article 39ofTRIPs).
Question 132n.
--Reply 325States that"thecomputer programs arenotprotected asliterary works, norare
databases." Does thismean toState thatUkraine does notpermit thecopyrighting ofcomputer software?
Reply 132n.
Anincorrect answer wasgiven toquestion 325. Thecorrect answer istheanswer toquestion
95.
"Incompliance withArticle 34ofthesaidLaw, manufacturers ofphonogram have anexclusive
right toallow orprohibit their reproduction, distribution ofcopies bywayoffirstsaleorother kind
ofalienation, orbyleasing, hiring out, rental andother means oftransfer, regardless offirst sale,
aswell asalteration andimport ofphonogram.
Article 37oftheLaw regulates theuseofphonogram issued forcommercial use. Such
phonogram maybeutilized without theconsent oftheir manufacturers orperformers recorded therein
butwith dueremuneration incase of:
1. public useofphonogram;
2. broadcast ofphonogram;
3. transmission ofphonogram bywire.
Thecollection, distribution andpayment ofremuneration areeffected byoneoftheagencies
controlling therights ofprogram manufacturers andperformers onacollective basis incompliance
with theagreements between such agencies.
Theamount ofremuneration andtheterms ofpayment arespecified byanagreement between
theuser ofphonogram oranassociation ofsuch users ontheonehand andtheagencies controlling
therights ofprogramme manufacturers andperformers ontheother hand.
Thesizeofremuneration issetforeach kind ofphonogram application.
Incompliance with theDirective oftheCEC (Council oftheEuropean Communities) onLegal
Protection ofComputer programs asof14May 1991, Article 5oftheUkraine 'sLaw "OnCopyright
andAssociated Rights" stipulates that databases andcomputer programs betreated with dueregard
totherequirements ofthesaidCEC Directive."
Thefollowing explanation isprovided:
InArticle 4,Section 1,oftheLawofUkraine "OnCopyright andRelated Rights" itisindicated
thatacomputer program isasetofinstructions inwords, numbers, codes, charts, symbols, orany
other form which ismachine-readable andwhich activates aprocess inorder toachieve acertain goalWT/ACC/UKR/7
Page 140
orresult. This concept includes operational systems aswell asapplied programs expressed infinal
orobjective code, including preparatory materials andaudio andvisual representation received asa
result ofdeveloping acomputer program.
InArticle 5itisindicated thatworks ofscience, literature, andartareprotected bythisLaw,
inparticular:
1. written works: belles-letters, scientific, technical, orinstructional works (books, pamphlets,
articles, computer programs, etc.);
Thus, computer programs areprotected tothesame extent asworks ofliterature, science, and
art,which complies with theEuropean Union Directive.
Bilateral Agreements
Question 116.
Please provide information ontheagricultural provisions ofthefuture freetrade intent with
theEU,especially how andwhen itwillbeimplemented andwhat preferences willbegiven towhich
EUproducts?
Reply 116.
TheAgreement onpartnership andcooperation between Ukraine andEUprovides fordiscussion
oftheestablishment ofafree-trade regime in1998 orwhen Ukraine becomes amember oftheWTO.
Question 117.
Please provide anupdated listofcountries thatUkraine hasonbilateral ormultilateral trade
agreements. What arethespecific trade provisions granted through these agreements?
Reply 117.
Foreign economic relations with Baltic countries, Moldova, Belarus were based inthefirst
half1994 onthebilateral international basis. According totheacting legislation, exporters ofany
organization-and-legal forms andirrespective oftheform ofownership arenotdifferentiated between
asfarascurrency exchange rateisconcerned i.e.they allenjoy equal rights.
Now more then93inter-State bilateral agreements andprotocols between Ukraine andregional
countries aresigned, ofthem 31with Belarus, 30with Moldova, 4with Latvia, 20with Lithuania,
9with Estonia (66ofthem onintergovernmental level: 21,18,4,16,8,respectively).
Agreements ontrade andeconomic co-operation withaddenda onmutual supplies ofbasic types
ofproducts (goods) for1994 aresigned with alltheregional countries, except Estonia. Ofthisquantity
2agreements andaprotocol were signed with Lithuania:
onfriendship andco-operation;
onencouragement andmutual protection ofinvestments;
ontrade andeconomic co-operation.WT/ACC/UKR/7
Page 141
Two agreements were signed with Estonia:
ontravelling ofdiplomatic passport holders;
onco-operation infields ofeducation, culture, science andtechnologies.
TheUkrainian Ministry ofCommunications andtheBelarus Ministry ofCommunications and
Informatics signed thefollowing agreements: onproblems ofinterchange, posttransportation andmutual
arrangements forposttransportation andhandling; onco-operation inperiodicals delivery; onbuilding
offibre-optic communication lineGomel-Kiev.
The National Bank ofRepublic ofMoldova andtheNational Bank ofUkraine signed an
agreement onorganization ofmutual arrangements inconnection with introduction ofnational currency
intheRepublic ofMoldova (Lei).
Inaddition, theGovernment formed andconfirmed thecomposition oftheUkrainian partof
bilateral Ukrainian-Moldovian, Ukrainian-Lithuanian and Ukrainian-Estonian Intergovernmental
Commissions onTrade andEconomic Co-operation.
Thefree-tradeagreements,whichweresignedearlierwithBelarusandLithuania,arenotratified
bytheUkrainian Supreme Rada. Theproblem ofaccelerating theratification ofthese agreements is
urgent. Theagreement with Belarus isready forratification andwork onagreement with Lithuania
isgoing on.
Inparticular, theRules ofOrigin andtheProtocol onExclusion from Free-Trade Regime,
which constitutes anintegral part oftheAgreement between theUkrainian Government andthe
Government ofLithuanian Republic onFree Trade of4August 1993, were signed with theLithuanian
Side.
Draft Protocol between theUkrainian Government andtheGovernment oftheLithuanian
Republic onTrade andEconomic Co-operation isworked outandpassed over totheLithuanian Side.
Amechanism formutual arrangements andnational debtservice isbeing worked outbytheUkrainian
andBelorussian National Banks (theworks onthedebtliquidation project, initiated bytheBelorussian
side, aredirected bytheUkrainian Ministry ofFinance).
Draft agreements onencouragement andmutual protection ofinvestments aredeveloped and
forwarded totheMoldovian, Latvian andEstonian sides, thedraft willbesenttoBelarus inthenearest
future.
Draft inter-governmental bilateral agreements onco-operation ofbordering Ukrainian and
Belorussian regions and, respectively, administrative-territorial units oftheRepublic ofMoldova are
forwarded totheBelorussian andMoldovian Sides.
Thedeveloped Draft Agreement between theUkrainian Government andtheGovernment of
theRepublic ofMoldova ontrade andeconomic co-operation isunder examination inappropriate
ministries andoffices. Then, itwillbeforwarded toMoldova.
Thefollowing draft agreements, prepared bysome other ministries andoffices, were also
coordinated:WT/ACC/UKR/7
Page 142
with Belarus -
onlabour andsocial security ofexpatriate workers;
onmilitary-technical cooperation;
onconditions ofnational debtservice asaresult oftrade andeconomic relations in1992-1993;
onnon-commercial payments;
oncooperation inenvironmental protection;
with Moldova -
oncooperation inthefield ofindustrial property protection;
onguarantee ofrights inthefield ofpensions;
onrights acknowledgement andregulations onownership relations forformer USSR property;
onhail-protective works inbordering regions; onmutual acknowledgement ofState licences
toconstruction activities issued bylicence centres ofUkraine andtheRepublic ofMoldova.
Inaddition,draftagreementsonformingofintergovernmentalUkrainian-Belorussian,Ukrainian-
Moldovian andUkrainian-Latvian commission onproblems oftrade andeconomic cooperation are
developed andsenttorelevant sides.
Work onexpansion ofbilateral cooperation inallbranches ofnational economy with regional
countries isgoing on.
Thefollowing factors willfacilitate intensification offoreign trade activities andprimarily
expansion oftrade andeconomic relations:
acceleration ofratification ofmultilateral agreement onfreetrade within CIS, signed inMoscow
onApril 15,1994, bygovernments of12countries;
expansion ofmutual relation between Ukrainian banks andregional countries;
development offoreign-trade relations directly between economy subjects ofallownership
types;
further liberalization andsimplification ofexport-import operations between these countries;
stabilization ofcurrency-financial system inboth Ukraine andformer USSR countries.WT/ACC/UKR/7
Page 143
ListofAgreements Signed between Ukraine andSome Foreign States concluded with
aDirect Mediation oftheMinistry ofForeign Economic Relations ofUkraine
State Trade Investment Mixed
agreement agreement commission
Croatia 0.05.94 - -
Hungary 31.05.91 11.10.94 22.05.92
Czechoslovakia 30.07.91 - -
Poland 04.10.91 12.01.93 12/01/93
Cuba 20.12.91 - -
Greece 15.01.94 31.08.94 31.08.94
Vietnam 23.01.92 - 17.11.93
India 27.03.92 - 04.94
Iran 26.04.92 - -
Turkey 02.05.92 - -
USA 06.05.92 OPIC 05.03.94
Finland 14.05.92 14.05.92 -
Mongolia 18.05.92 05.11.92 05.11.92
Estonia 26.05.92 - 06.07.93
Rumania 28.07.92 - 19.04.94
Georgia 06.08.92 - -
China 08.08.92 31.08.92 31.10.92
Bulgaria 05.10.92 - 11.03.93
Denmark 14.06.94 23.10.92 -
Russian Federation 24.05.93 - -
(Foreign trade)
Great Britain 14.06.94 10.02.93 -
Germany 14.06.94 15.02.93 -
Egypt 24.12.92 24.12.92 24.12.92
Belorus 16.11.92
(Foreign trade)
Moldova 20/03.93 - -
PRC 15.06.93 - 08.06.94
Algeria 01.07.93 - -
Lithuania 04.08.93 08.02.94 -
(Foreign trade)
Slovak Republic 26.08.93 - -
Austria 31.08.93 - -
Uzbekistan - 20.02.93 -
Kazakhstan 23.12.93 - -
Kirgiziya
Azerbaijan 30.12.93
Turkmenistan 08.02.94
Tunisia 07.12.93
Czech Republic 17.03.94 17.03.94
Canada 31.03.94
France 14.06.94 03.05.94
Spain 14.06.94WT/ACC/UKR/7
Page 144
Italy 14.06.94
Portugal 14.06.94
Ireland 14.06.94
Netherlands 14.06.94 14.07.94
Belgium 14.06.94
Luxembourg 14.06.94
Israel 16.06.94
Armenia 07.10.94 07.10.94
(Foreign trade)
Question 118.
Please provide information onallcurrent orplanned trade agreements with FSU countries.
Reply 118.
Listofbilateral current andplanned agreements between Ukraine andTranscaucausian and
Central Asian States
(asofOctober 25,1994)
_________________________________________________________________________________
No. Name ofDocument Signed. Date and Term Ratification. Comments
by Place date
_________________________________________________________________________________
Azerbaijani Republic
1.Agreement between Regime: freetrade, Ukrainian
Gvrnmt noexclusions
&Azeri Gvrnmt Noduties, taxes
onFree Trade (draft) norcharge
2.Agreement between Vice- Dec.30 31.12.94 Products andgoods supply
Ukrainian Gvrnmt PM 1993 defined inAdd. No.1
&Azeri Gvrnmt Kiev &No.2. Exemptions from
ontrade and Shmarov export andimport duty
economic coope- forsupplies according
ration for1994 Add. No.1 &No.2.
3.Agreement between Products andgoods supply
Ukrainian Gvrnmt defined inAdd. Nos1
&Azeri Gvrnmt &2.Exemptions from
ontrade and export andimport duties
economic coope- forsupplies according
ration in1995 toAdd. Nos1&2.
(draft)WT/ACC/UKR/7
Page 145
4.Agreement oninter- Deputy Mar.18 Not Defines mechanism for
bank settlements Admin. 1994 defined mutual settlements
between Ukrainian Head Kiev
&Azeri National Mityukov
Banks inconnection
with introduction
ofAzeri national
currency
Republic ofGeorgia
1.Agreement between Regime:free trade,
Ukrainian Gvrnmt noexclusions
&Georgian Gvrnmt Noduties, taxes
onFree Trade norcharges
(draft)
2.Agreement on PM Aug.6 5years Most Favourable
development 1992 treatment
oftrade and Fokin Tbilisi
economic co-
operation.
Between Ukra-
inian &Geor-
gian Gvrmt
3.Protocol toAg- Acting Apr.13 ToDec. Supplies ofproducts &
reement ondeve- PM 1994 31,1994 goods accord. toAdd.
lopment oftrade Kiev Nos1,2,3&4
andeconomic co- Supplies accord. toAdd
operation between Nos3&4areonclear-
Ukrainian &Geor- ring base andareexem-
gian Gvrmt ofAug.6 ptions from export and
1992 onmutual supp- import duties
liesofproducts and
goods in1994
4.Protocol toAgre- Supplies ofproducts &
ement ondevelopment goods accord. toAdd.
oftrade andeconomic Nos1and2areexempted
cooperation between from export andimport
Ukrainian andGeor- duties, taxes andchar-
gian Gvrmt ofAug.6 ges
1992 onmutual sup-
plies ofproducts
andgoods in1995
(draft)
5.Agreement onsettle- National Jan.13 ToDec. Defines mutual settle-
ment organization Bank of 1994 31,1994 ment mechanismWT/ACC/UKR/7
Page 146
between Ukrainian Ukraine Kiev
andGeorgian Natio-
nalBanks in1994
Republic ofArmenia
1.Agreement between Prime- Oct.7 Not Regime-free trade,
Ukrainian Gvrnmt Minist 1994 defined noexclusions
&Armenian Gvrnmt Masol Kiev Noduties, taxes
onFree Trade norcharges
2.Agreement between Vice- Dec,24 31.12.94 Products andgoods suppl
Ukrainian Gvrnmt Prime- 1993 defined inAdd. No.1
&Armenian Gvmt Minist Ashgabat &No.2. Exemptions from
ontrade and Landyk export andimport duty
economic coope- forsupplies according
ration in1994 toAdd. No.1 &No.2.
3.Agreement between Oct,7 31.12.95 Products andgoods suppl
Ukrainian Gvrnmt Prime- 1994 defined inAdd. No.1
&Armenian Gvrnmt Minist Kiev &No.2. Exemptions from
ontrade and Masol export andimport duty
economic coope- forsupplies according
ration in1995 toAdd. No.1 &No.2.
Ukrainian State Comm.on
Resources andArmenian
Ministry ofMaterial
Resources areresponsib-
leforthesupplies
4.Agreement onsettle- Deputy Sep.23 Not Defines mutual settle-
ment organization Administ. 1994 defined ment mechanism
between Ukrainian Head
andArmenian Natio- Mityukov
nalBanks in1994
Republic ofKazakhstan
1.Agreement between ForUk- Sep.17 Not Regime-free trade,
Ukrainian Gvrnmt rainian 1994 defined noexceptions
&Kazakhi Gvrnmt Gvrmt Almaty Noduties, taxes
onFree Trade Masol &charges
2.Agreement between ForUk- Dec,23 31.12.94 Products andgoods suppl
Ukrainian Gvrnm rainian 1993 defined inAdd. No.1
&Kazakhi Gvmt Gvrmt Ashgabat &No.2. Exemptions from
ontrade and Zvyagilskyi export andimport duty
economic coope- forsupplies according
ration in1994 toAdd. No.1 &No.2.
3.Agreement onsettle- Acting Sep.23 31.12.94
ment organization Prime- 1994WT/ACC/UKR/7
Page 147
between Ukrainian Minister
andKazakhi Natio- Zvyagilskyi
nalBanks andGvrmts Head of
in1994 National
Bank
Yushchenko
4.Addendum No.1 to First Sep.2
Agreement onsettle- Deputy 1994
ment organization Head of Almaty
between Ukrainian Ukrainian
andKazakhi Natio- National
nalBanks andGvrmts Bank
in1994 of20.01.94 Veselovskyi
5.Agreement between Products andgoods suppl
Ukrainian Gvrnm defined inAdd. No.1
&Kazakhi Gvmt &No.2. Exemptions from
ontrade and export andimport duty
economic coope- forsupplies according
ration in1995 toAdd. No.1 &No.2.
(draft)
Kyrgyz Republic
1.Agreement between Acting Dec,24 31.12.94 Products andgoods suppl
Ukrainian Gvrnmt Prime- 1993 defined inAdd. No.1
&Kyrgyzi Gvmt Minist. Ashgabat &No.2. Exemptions from
ontrade and Zvyagilskyi export andimport duty
economic coope- forsupplies according
ration in1994 toAdd. No.1 &No.2.
2.Agreement between ForUk- Sep.17 Not Regime-free trade,
Ukrainian Gvrnmt rainian 1994 defined noexceptions
&Kyrgyzi Gvrnmt Gvrmt Almaty Noduties, taxes
onFree Trade Masol &charges
3.Agreement between Products andgoods suppl
Ukrainian Gvrnmt defined inAdd. No.1
&Kyrgyzi Gvmt &No.2. Exemptions from
ontrade and export andimport duty
economic coope- forsupplies according
ration in1995 toAdd. No.1 &No.2.
(draft)
Republic ofTadjikistan
1.Agreement between Products andgoods suppl
Ukrainian Gvrnmt defined inAdd. No.1
&Tadjiki Gvmt &No.2. Exemptions from
ontrade and export andimport duty
economic coope- forsupplies accordingWT/ACC/UKR/7
Page 148
ration in1995 toAdd. No.1 &No.2.
(draft)
Turkmenistan
1.Agreement between Acting Feb,08 31.12.94 Products andgoods suppl
Ukrainian Gvrnmt Prime- 1994 defined inAdd. No.1
&Turkmeni Gvmt Minist. Kiev &No.2. Exemptions from
ontrade and Zvyagilskyi export andimport duty
economic coope- forsupplies according
ration in1994 toAdd. No.1 &No.2.
2.Agreement oninter- ForUk- Oct,29 Not
bank settlements rainian 1993 defined
between Ukrainian National Ashgabat
&Turkmeni National Bank
Banks inconnection First
with introduction Deputy
ofTurkmeni national Head
currency Veselovskyi
2.Agreement between Regime-free trade,
Ukrainian Gvrnmt noexceptions
&Turkmeni Gvrnmt Noduties, taxes
onFree Trade (draft) &charges
4.Agreement between Products andgoods suppl
Ukrainian Gvrnmt defined inAdd. No.1
&Turkmeni Gvmt &No.2. Exemptions from
ontrade and export andimport duty
economic coope- forsupplies according
ration in1995 toAdd. No.1 &No.2.
(draft)
Republic ofUzbekistan
1.Agreement between Head ofSep.6 IV Products andgoods suppl
Ukrainian Gvrnm Ukrainian 1994 Quarter defined inAdd. No.1, 2,
&Uzbeki Gvmt State Tashkent 1994 3&4.Exemptions from
ontrade and Delegation export andimport duty
economic coope- Golubchenko forsupplies according
ration inIVquarter toAdd. No.1, 2,3&4
of1994
2.Agreement onsettle- Head ofSep.6 Not
ment organization Ukrainian1994 defined
between Ukrainian State Tashkent
andUzbeki Natio- Delegation
nalBanks Golubchenko
First
DeputyWT/ACC/UKR/7
Page 149
Head of
Ukrainian
National
Bank
Veselovskyi
3.Agreement between Regime-free trade,
Ukrainian Gvrnmt noexceptions
&Uzbeki Gvrnmt Noduties, taxes
onFree Trade (draft) &charges
4.Agreement between Products andgoods suppl
Ukrainian Gvrnmt defined inAdd. No.1
&Uzbeki Gvrnmt &No.2. Exemptions from
ontrade and export andimport duty
economic coope- forsupplies according
ration in1995 toAdd. No.1 &No.2.
(draft)
Question 133n.
--Reply 117indicates thatUkraine hascontracted more than 93inter-State bilateral agreements with
Belarus, Moldova, Latvia, Lithuania, andEstonia, with 66ofthem onthe"intergovernmental level".
Please elaborate onthesignificance ofthese agreements.
Reply 133n.
Theabove-mentioned agreements between Ukraine andthegovernments indicated, which were
signed recently attheinternational andintergovernmental levels, have agreat significance forthe
establishment ofasystem ofinternational relations, ministry toministry andsector tosector, which
willfacilitate theestablishment andeffective development oftheir various aspects. Forexample, the
agreements, which were signed government togovernment, thatis,theagreements onfriendship and
cooperation, laythegroundwork onwhich thefurther development ofinternational relations between
governments, between ministries, andbetween sectors, isbased. This willthen beguided bythe
particular agreements between governments, ministries anddepartments ofthecountries, which are
party tothem.
Question 134n.
What isthedifference between an"interState" andan"intergovernmental" agreement?
Reply 134n.
Atthepresenttime,onlytheFreeTradeAgreementbetweenUkraineandtheRussianFederation,
which came intoeffect in1993, isfully functioning, although ithasnotbeen ratified bytheparliament
ofUkraine. Atthattime there wasnoratification mechanism inplace, insofarasthere wasno
legislation which regulated theentry intoeffect andtheimplementation ofthiskind ofAgreement.
TheAgreement came intoeffect asaresult oftheexchange ofnotes between theMinistries ofForeign
Affairs ofRussia andUkraine.WT/ACC/UKR/7
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There wasasimilar regime planned forBelarus, butasaresult ofmore recent events inrelations
between Belarus andtheRussian Federation, theexamination ofthisissue hasbeen suspended, although
theCustoms Committee ofUkraine quickly introduced preferential rates forgoods from Belarus.
Ukraine hasdeveloped aDraft Agreement between Ukraine andArmenia. TheCabinet of
Ministers ofUkraine haspassed aResolution tohave theSupreme Rada ratify it.However, ratification
hasyettotake place.
Question 135n.
--Please confirm whether ornotUkraine currently maintains functioning freetrade agreements
with (a)theRussian Federation, (b)Belarus, (c)Armenia (asindicated inreply 118), or(d)anyother
CISmember.
Reply 135n.
Atthepresent time theAgreement onFree Trade with theRussian Federation isinforce but
thisAgreement hasrestricted theimplementation ofthefreetrade regime since itdoes notapply to
some goods which aresubject toexport tariffs according tothelegislation ofboth countries orare
subject toquotas andlicensing (exceptions inthefreetrade regime).
With thepurpose ofmutually reducing thenumber ofthese exceptions, anAgreement onthe
Implementation ofFree Trade Regime hasbeen concluded with Russian Federation. This Agreement
provides forthecreation ofajoint working group todetermine theprocedure andstages ofreducing
ofexceptions from thefreetrade regime.
Question 136n.
Ifso,isitcontemplated thatacustoms oreconomic union willbeestablished with Belarus
orRussia inthefuture? Ifso,isthere atimetable forthisdevelopment?
Reply 136n.
TheestablishmentofacustomsunionwithRussianFederationandBelarusisviewedbyUkraine
asoneofthepossible stages offurther promotion oftrade andeconomic co-operation which may be
established only after freetrade regime with noexceptions hasbeen introduced.
Thus atthepresent stage Ukraine ismore inclined tohold back from entry intoacustoms union
with Russian Federation andBelarus.
Thepractice ofsigning annual Agreements onTrade andEconomic Co-operation with CIS
countries (including Russian Federation) remains unchanged for1995.
Thesigning ofthese agreements results from theneed forcritical correction ofsome aspects
oftrade andeconomic relations forthecurrent year andforbilaterally balancing trade through
government purchasing, andalsoresults from thefactthatcentralized system ofinternational trade
partially isstillinplace.
Question 137n.
--Reply 118listsAgreements between various CISgovernments andUkraine "ontrade and
economic cooperation" for1994 and1995. These agreements provide for"exemptions from export
andimport duty forsupplies" according toaddendum thatseem unique toeach agreement andappearWT/ACC/UKR/7
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toexpire attheendofthecalendar year. With theexception oftheagreement with Armenia, which
wassigned inOctober 1994, none ofthedraft agreements for1995 seem tohave been implemented.
Areanyofthe1995 agreements ofthissortineffect between Ukraine andother CISmembers.
Does Ukraine have such agreements, even indraft, with Belarus, theRussian Federation, orMoldova?
Reply 137n.
Theabove-mentioned listofagreements israther specific innature andthey apply, asarule,
foralimited period andareusually signed foroneyear. Inaccordance withthese contingent agreements,
thetariff iseliminated from various kinds ofexports orimports which areincluded intheschedule
appended toanyparticular agreement.
These agreements differ from others inthatthey give preferential treatment tocertain goods
andquite often refer totheimplementation ofvarious urgent government programmes, although the
principles of"government contracts" and"government orders" have been eliminated. Forexample,
energy (Agreement with Turkmenistan) would, inthiscase, beincluded inthelistofgoods.
Question 138n.
Please describe ingreater detail thenature ofthese preferential trade agreements. Dotheycover
substantially alltrade between Ukraine andthepartner countries, orarethelists ofgoods onthe
addendum lesscomprehensive?
Reply 138n.
SeeReply 137n.
Question 139n.
Arethese agreements project specific? Arethelistsofproducts andgoods exempted from import
andexport duties alsogoods procured under State "contracts" and"orders" asdiscussed earlier?
Reply 139n.
SeeReply 137n.