  
  
G/SG/N/8/UKR/7  
G/SG/N/10/UKR/7  
G/SG/N/11/UKR/5  
25 May 2020 
(20-3780) Page: 1/4 
Committee on Safeguards  Original:  English  
 
  
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT  ON  
SAFEGUARDS ON FINDING A SERIOUS INJURY OR  THREAT  
THEREOF CAUSED BY INCREASED IMPORTS  
NOTIFICATION OF A PROPOSAL TO IMPOSE A MEASURE  
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2  
OF THE AGREEMENT ON SAFEGUARDS  
UKRAINE  
Complex fertilizers  
The following communication, dated 21 May 2020, is being circulated at the request of the Delegation 
of Ukraine.  
 
_______________  
 
 
Pursuant to Articles 12.1(b) of the Agreement on Safeguards, Ukraine  submits a notification on 
finding a serious injury or threat thereof, to the domestic industry producing certain nitrogen 
fertilizers and a notification on proposed safeguard measures. This notification contains all pertinent 
information relating to the p roposed safeguard measures in accordance with Article 12.2 of the 
Agreement on Safeguards and a request for consultations pursuant to Article 12.3 of the Agreement 
on Safeguards.  
On 21 August 2019 the Interdepartmental Commission on International Trade ("C ommission") took 
the decision "On initiation and conduction of safeguard investigation on imports into Ukraine of 
mineral fertilizers containing nitrogen and phosphorus and mineral fertilizers containing nitrogen, 
phosphorus, and potassium regardless of co untry of origin and export" № SP - 426/2019/4411 -03 
(G/SG/N/6/UKR/13 of 2 September 2019). On 28 August 2019 the abovementioned decision was 
published in the official newspaper "Uryadovyi Courier" № 163.  
The investigation has been initiated pursuant to the  application of the domestic industry in particular 
by Ukrainian Chemists Union on the behalf of PJSC "Dniprovskyy plant of chemical fertilizers", PJSC  
"Sumykhimprom", LLC "Chemvector" ("the Applicant").  
1  TO PROVIDE EVIDENCE,  CITING RELEVANT DAT A AND THE AP PLICABLE PERIOD OF 
INVESTIGATION OF SER IOUS INJURY OR THREA T THEREOF CAUSED BY INCREASED 
IMPORTS  
Information in this Section should be analyzed and evaluated together with Section II.  
The period of investigation: 2016, 2017, 2018, 1 July 2018-30 June 2019.  
The results of the analysis of the applicant's economic situation show that in the recent period, 
compared to the first period:  
- production volumes increased by 65.41 %; 
- production capacity decreased by 0.67 % and utilization increased by 66.52 %; G/SG/N/8/UKR/7 • G/SG/N/10/UKR/7 • G/SG/N/11/UKR/5  
- 2 - 
  - the sales of the product on the domestic market increased by 60.75 %; 
- the applicant's share in consumption increased by 55.12 % while the consumption increased 
by 3.63 %; 
- stocks in warehouses at the end of the period increased by 14.49 %; 
- employment rate inc reased by 0.33 %; 
- the average monthly salary increased by 134.32 %; 
- the loss of the company decreased by 75.05 %, but the activity of the Applicant remains 
unprofitable;  
- profitability from the sale of the product in the domestic market is negative;  
- liquidity conditions  increased by 14.62 %; 
- investments in production of the product decreased by 9.04 % compared to the base period.  
Taking into account the significant increase in production capacity in the world and the territorial 
closeness of Ukraine to major expo rting countries, there are all prerequisites to say that there is a 
threat of growing imports and displacement of domestic producers from the Ukrainian market, which 
in turn threatens the loss of domestic economy.  
The cumulative assessment of these factors , as well as the arguments for the growth of imports give 
grounds to conclude that there is a negative impact of imports on the state of the national industry 
and the constant threat of causing significant injury to domestic producers.  
2  TO PROVIDE INFORMATI ON ON WHETHER THERE IS AN ABSOLUTE INCRE ASE IN 
IMPORTS OR AN INCREA SE IN IMPORTS RELATI VE TO DOMESTIC PRODU CTION.  
UNFORESEEN DEVELOPME NTS.  
According to the customs statistics (data) of the State Customs Service during the investigation 
period there were si gnificant fluctuations in the volume of imports: in the second period there was 
an increase in imports compared to the first period by 13.46 %, a decrease in imports in the third 
period compared to the second period by 24.79 % due to non -economic factors and  growth in imports 
in the fourth period compared to the third period by 14.26 %. 
However, if we look at the same dynamics in absolute terms, we can see that the growth of imports 
by 13.46 % in the second period compared to the first period is 244,962 tons, a nd the growth of 
imports by 14.26 % in the fourth period compared to the third period is 221,358 tons. At the same 
time, such growth was significantly higher than the annual production of domestic producers.  
As a result, the volume of imports relative to th e total production of goods in Ukraine ranged from 
739.2 % to 2,551.85 %. 
Accordingly, in such conditions, the domestic producer is deprived of the opportunity to compete 
with imported products.  
Significant, sudden, recent and sharp growth of imports is evid enced by the fact that imports fell in 
the third period compared to the second period by 24.79 % in the fourth period compared to the 
third period there was an increase in imports by 14.26 %. 
Growth of imports in 2017 -2019 was more than 3 times higher compared to the period of 2006 -2008, 
ie during the period of Ukraine's membership in the World Trade Organization, due to the dynamic 
growth of world production capacity of mineral fertilizers and sharp fluctuations in gas prices, basic 
raw materials for the production of mineral fertilizers, was unpredictable for Ukrainian producers.  
Based on the above, it was established that during the investigation period there was a significant, 
sudden, recent and sharp increase in imports, which could not have been foreseen by the domestic 
producer.  G/SG/N/8/UKR/7 • G/SG/N/10/UKR/7 • G/SG/N/11/UKR/5  
- 3 - 
  The major exporting countries of imports of the product involved.  
Country  1st year period  2nd year period  3rd year period  4th year period  
Amount of imports by country of origin, tons  
The Republic of Belarus  384 374,6  384 816,1  409 447,1  452 143,9  
The Republic of Lithuania  25 146,9  49 743,2  71 229,1  88 124,6  
The Russian Federation  1 360 080,2  1 518 813,4  850 376,9  899 396,4  
The Republic of Poland  17 248,9  52 429,0  109 914,3  149 314,3  
3  TO PROVIDE PRECISE D ESCRIPTION OF THE PR ODUCT INVOLVED  
Mineral fertilizers with nitrogen and phosphorus content and mineral fertilizers with nitrogen, 
phosphorus, potassium content, in which the total mass fraction of nitrate, in terms of nitrogen in 
the dry matter is less than 28 wt. %, classified in accordan ce with UKTZED (UKTZED is the Ukrainian 
Foreign Economic Activity Commodity Classification, based on Harmonized System 2012) under the 
code 3105.  
4  TO PROVIDE PRECISE D ESCRIPTION OF THE PR OPOSED MEASURE  
Based on the data of the State Customs Service on the volume of imports of goods into Ukraine for 
the period of investigation 01.01.2016 -30.06.2019 on a monthly basis was calculated the average 
annual volume of imports of goods into Ukraine.  
As noted, Ukraine has significant production capacity for minera l fertilizers to meet some of the 
needs of the domestic market of Ukraine, which in the context of growing imports cannot be loaded 
to the level of livelihood and profitability of production. In this regard, the need to create 
preconditions for increasing the level of capacity of utilization of the national producer is economically 
justified and necessary to prevent serious damage to the national producer.  
However, given the peculiarities of access of Ukrainian companies to the raw material base of 
individu al components for the production of goods (phosphorus and potassium) and in order to 
achieve the least harm to international trade, the total quota is divided separately for NP and NPK 
with partial adjustment of shares of these two types of goods. creating  preconditions for avoiding a 
deficit and maximally providing consumers of Ukraine with NPK fertilizers.  
Accordingly, the calculation was performed as follows:  
- the average annual level of consumption of goods has been adjusted by 90 % of the level 
of capaci ty of utilization by the national producer, which determines that for the purposes 
of preventing serious injury to the domestic producer, the level of quota for imports of 
goods should not exceed 1,422,107 tons;  
- taking into account the importance of avoidi ng deficit of NPK fertilizers, peculiarities of 
capacity of utilization (without division into NP and NPK), peculiarities of Ukrainian 
companies' access to raw material base of separate components for production of goods, 
and in order to eliminate damage t o national producer the calculated quota level is: for 
NP - 45,000 tons, and for NPK - 1,377,107 tons.  
Index  1st year period  2nd year period  3rd year period  
NP, т 45 000  45 900  46 818  
NPK, т  1 377 107  1 404 649  1 432 742  
TOTAL  1 422 107  1 450 549  1 479 560  
5  TO PROVIDE PROPOSED DATE OF INTRODUCTION  OF THE MEASURE  
June 2020.  
6  TO PROVIDE EXPECTED DURATION OF THE MEAS URE 
Safeguard measures are planned to be imposed for a period of 3 years.  G/SG/N/8/UKR/7 • G/SG/N/10/UKR/7 • G/SG/N/11/UKR/5  
- 4 - 
  7  TO PROVIDE FOR A MEA SURE WITH A DURATION  OF MORE THAN THREE YEARS THE 
PROPOSED DATE FOR TH E REVIEW (UNDER ARTI CLE 7.4) TO BE HELD NOT LATER THAN 
THE MID -TERM OF THE MEASURE,  IF SUCH A DATE FOR THE REVIEW HAS ALREA DY BEEN 
SCHEDULED  
Not applicable . 
8  IF THE EXPECTED DURA TION IS OVER ONE YEA R, PROVIDE EXPECTED TIMETABLE FOR 
PROGRESSIVE LIBERALI ZATION OF THE MEASUR E 
The level of the quota should be increased by 2 % annually during measures validity.  
9  TO PROVIDE INFORMATI ON RELATING TO THE E XTENSION OF A SAFEGU ARD MEASURE  
Not applicable . 
10  EXCLUSION OF CERTAIN  COUNTRI ES FROM THE SCOPE OF  THE DEFINITIVE MEAS URES  
According to the Article 9.1 of the Agreements on Safeguards (List of the Least Developed Countries 
of the United Nations), Free Trade Agreement between the EFTA States and Ukraine dated 
24.06.2010, Free Trade A greement between the Government of Ukraine and the Government of 
Montenegro dated 18.11.2011, Free Trade Agreement of the Commonwealth of Independent States, 
dated 18.10.2011 and taking into account Chapter 8 of the Article XXIV of the General Agreement 
on Tariffs and Trade 1994 imports into Ukraine of goods described in paragraph 3 of this notification 
originating from the following countries should be excluded from the application of the definitive 
measures: the Republic of Iceland, the Principality of Li echtenstein, the Kingdom of Norway, the 
Swiss Confederation, the Republic of Montenegro, the Republic of Azerbaijan,  the Republic of 
Armenia, the Republic of Uzbekistan, the Republic of Kazakhstan, the Republic of Kyrgyzstan, the 
Republic of Moldova, the R epublic of Tajikistan, the Republic of Turkmenistan, the Islamic Republic 
of Afghanistan, the Republic of Angola, the People's Republic of Bangladesh, the Republic of Benin, 
the Kingdom of Bhutan, the Republic of Burkina Faso, the Republic of Burundi, the Kingdom of 
Cambodia, the Central African Republic, the Republic of Chad, the Union of the Comoros, the 
Democratic Republic of the Congo, the Republic of Djibouti, the State of Eritrea, the Federal 
Democratic Republic of Ethiopia, the Islamic Republic of Ga mbia, the Republic of Guinea, the 
Republic of Guinea -Bissau, the Republic of Haiti, the Republic of Kiribati, the Lao People's Democratic 
Republic, the Kingdom of Lesotho, the Republic of Liberia, the Republic of Madagascar, the Republic 
of Malawi, the Rep ublic of Mali, the Islamic Republic of Mauritania, the Republic of Mozambique, the 
Republic of  the Union of Myanmar, the Federal Democratic Republic of  Nepal, the Republic of Niger, 
the Republic of Rwanda, the Democratic Republic of Sao Tome and Principe, the Republic of Senegal, 
the Republic of Sierra Leone, Solomon Islands, the Federal Republic of Somalia, the Republic of 
South Sudan, the Republic of  Sudan, the Democratic Republic of Timor -Leste, the Republic of  Togo, 
Tuvalu, the Republic of Uganda, the U nited Republic of Tanzania, the Republic of Yemen, the Republic 
of Zambia.  
11  PROCEDURES RELEVANT TO THE DECISION ON A PPLICATION OF THE ME ASURES AND 
INFORMATION REGARDIN G PROCEDURES FOR PRI OR CONSULTATIONS WIT H THOSE 
MEMBERS HAVING A SUB STANTIAL INTEREST AS  EXPORTERS OF THE PROD UCT 
CONCERNED  
As a measure to prevent the extension of COVID -19, Ukraine proposes, if necessary, to held the 
consultations in the form of an exchange of views by providing the information in writings or by 
means of videoconference.  
Memb ers having a substantial interest as exporters of the product subject to the investigation that 
would like to consult with Ukraine shall send their position papers to the meconomy@me.gov.ua  (for 
official registrati on) and to the email addresses of the responsible for the investigation persons 
zaiets@me.gov.ua  and suhanov@me.gov.ua  before 04.06.2020 or request videoconference to be 
hold till 04.06.2020 . 
 
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