RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/UKR/59/Add.2
18 August 1999
(99-3467)
Working Party on the
Accession of UkraineOriginal:  English
ACCESSION OF UKRAINE
Addendum
Additional Questions and Replies
The Governmental Commission on Ukraine's Accession to the WTO has provided the replies
reproduced hereunder to the questions submitted by delegations following the last meeting of the
Working Party.
_______________
TABLE OF CONTENTS
Question Page
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN
TRADE
2. Economic Policies
(a) main directions of the ongoing economic policies 1-6 3
IV. POLICIES AFFECTING TRADE IN GOODS 7 5
1. Import Regulation(b) Characteristics of national tariff 8 5
(d) Other duties and charges 9-18 6
(e) Quantitative import restrictions, including  prohibitions, quotas
and licensing systems19 10
(h) Customs valuation 20-22 11
(k) Application of internal taxes on imports 23-31 12
Minimum import values 32-34 19
Concerning the Ashkabad Agreement 35-36 19
(o) Safeguard regime 37-38 20
President's Decree 39-48 22
3. Internal Policies Affecting Foreign Trade in Goods
(a) Industrial policy, including subsidy policies 49-50 24
(b) Technical regulations and standards 51-57 25
(c) Sanitary and phytosanitary measures, including measures taken
with respect to import58-67 28
(e) State trading practices 68-69 32
(l) Government procurement 70-80 34WT/ACC/UKR/59/Add.2
Page 2
Question Page
4. Policies Affecting Foreign Trade in Agricultural Products 81-94 39V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 95 47
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
1. Bilateral or plurilateral agreements relating to foreign trade in
goods and trade in services96 48WT/ACC/UKR/59/Add.2
Page 3
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies:(a) main directions-pricing policyAccording to information supplied by the Government of Ukraine (WT/ACC/UKR/7, etc.),
price controls on most goods and services were abolished in October 1994. Ukraine continues to
regulate prices for goods and services where there is a natural monopoly (electricity, gas,
centralized heating, water supply and sewerage, public transport, rental of premises), and for a
small number of artificial monopolies. Prices for communal services (i.e., apartment rents and
utility patents) are gradually being raised to market levels. For agricultural products, thegovernment continues to set prices for grain (H SI 0.01-10.08), flour (11.01-11.02), certain kinds
of bread (HS 19.05) through the use of mark-up/profit-limits on processors.
Question 1.
What agricultural products (i.e., other than grai n, flour, bread, milk, and meat) are subject to
price monitoring or price controls?
Reply:
Currently agricultural products are not subject to state price controls.
However, in compliance with Article 8 of the Law of Ukraine “On Prices” in case of
excessive increase in the prices that have been previously drawn out of the control (under the Cabinet
of Ministers’ of Ukraine decision) of executive committees of oblast, city (towns of republican[national] subordination) Radas it is permitted [to  apply] a temporary restitution of price regulations.
Question 2.
Are the mark-up/profit limits for grain, flour, and bread still in effect? If not, what
legislation/regulation ended their use?
Reply:
We don’t have a clear understanding what you mean by mark-up/ profit limits for grain, flour,
and bread processing.
State administration bodies, administrative and business management and control bodies,
local self-government bodies in charge of economy’s demonopolization, promoting competition and
anti-monopoly governing have the right to set forth the procedures on defining prices and tariffs,
limiting norms of commercial viability for anti-monopoly regulation objects, under correlation with
the Anti-Monopoly Committee of Ukraine. However, as of now the maximum profit level from grain,flour, and bread processing in Ukraine is not being regulated.
Question 3.
Please provide clarification on how domestic sales prices for imported grain and grain products
are regulated.WT/ACC/UKR/59/Add.2
Page 4
Reply:
Currently in Ukraine sales prices for imported grain and grain products are not being
regulated.
Question 4.
Are there any other non-agricultural products a nd services (i.e., other than (electricity, gas,
centralized heating, water supply and sewerage, public transport, rental of premises) subject to
control? Could Ukraine provide a list of all such controls currently in force?
Reply:
The [provisions of] Cabinet of Ministers of Ukraine Resolution No.  1548 of
25 December 1996, provided central executive bodies, Council of Ministers of the Autonomous
Republic of Crimea, Kyiv and Sevastopol municipalities, executive bodies of municipalities with the
authority to regulate prices and tariffs on certain types of products, goods and services, in particular:
- Certain transportation tariffs;
- Certain communications services;
- Prices for precious metals in [jewellery] articles and metal scrap, and precious stones
purchased from the population;
- Tariffs on water supply services;
- Electric energy [electricity] supplied to the population, and gas supplies;
- Tariffs on lodging on student campuses;
- Tariffs on some services provided to the users of Ukraine’s shoot [hunting grounds];
- Tariffs on heating services;- Tariffs on paid services provided by state and municipal medical care, prophylactic and
sanatorium establishments;
- Tariffs on collecting, transporting and destroying solid-form household and liquid waste.
Question 5.
Do price controls exist at the regional (oblast) or municipal level? If so, for what products, and
how are prices controlled?
Reply:
In compliance with Article 28 of the Law of Ukraine “On Local Self-Government” the scope
of authority of village, town and city Radas includes “…introduction under the legally set procedures
and within legally set frameworks tariffs on paying for municipal, transport and other services
provided by municipally owned enterprises and organizations of the respective territorial community;
collaboration of these issues under the set procedures with enterprises, establishments and
organizations which are not municipally owned.”
Question 6.
Please keep us informed on any developments concerning the establishment of an agricultural
intervention agency.WT/ACC/UKR/59/Add.2
Page 5
Reply:
We do not understand what state body is meant.  The Ministry of Agro-industrial Complex of
Ukraine is the central state body on the issues of agriculture.
IV. POLICIES AFFECTING TRADE IN GOODS
Question 7.Please report on the status and prospects of current quotas applied to Ukraine steel exports by
the EU. When does Ukraine expect  these quotas to be terminated?
Reply:
A separate agreement between Ukraine and the EU governs trade in certain types of steel
products pursuant to Article 22 of the Agreement on Partnership and Cooperation between Ukraine
and the EU (PCA).
Under the Agreement effective within 1 995-1996, volume of quotas covered by the
Agreement amounted 140,830 tons in 1995 and 161,958 tons in 1996.  Moreover, Ukraine could
supply 50,000 tons of steel articles to the former Eastern Germany annually.  However, only 50% of
the said quota have been used.
On 15 July 1997, the new Agreement between Ukraine and the European Coal and Steel
Community (ECSC) on trade in certain steel articles was signed for 1997-2001.
The new Agreement provides for a gradual opening of the EU steel articles market, taking
into account creation of normal competitive conditions in Ukraine, carrying out the state support
policies of enterprises and environment protection that will approach the EU standards gradually.
On 15 July 1997, the Agreement (in a form of letters exchange) on establishment of the dual
check-up system without quantitative restrictions was signed between Ukrainian Government and the
EU as to export of certain steel articles from Ukraine to the European Communities covered by
agreements on establishment of the EU and European Coal and Steel Community.  Signing of thisAgreement is aimed at prevention of antidumping  and other protective measures from the EU.
1. Import Regulation
(b) Characteristics of national tariffQuestion 8.In reply to question 2 of document WT/ACC/UKR/41 Ukraine has indicated that excise tax
unification may involve changes to applied rates of customs duty.
What changes to applied rates of customs duty are contemplated after excise reunification?
Will Ukraine seek to revise its proposed tari ff bindings to take account of such changes?
Reply:
Document WT/ACC/UKR/41 notes that Ukraine will keep the right to increase temporarily
rates of duties up to 70% of ad valorem for goods subject to excise within negotiations process on
access to the Ukrainian goods market.WT/ACC/UKR/59/Add.2
Page 6
Unification itself does not deal with change of rates of import duties.
Government does its utmost efforts to achieve maximum transparency and prevision of tariff
regulation.  Resolution of the Cabinet of Ministers of Ukraine of 3 August 1998, No.  1213 “On theProcedure for Making Changes to Rates of Import Duties” introduces the new procedure for making
changes to rates of import duties.  In 1999, changes can be made no more than once per half a year.
In year 2000, changes can be made no more than once a year.  Number of the combined tariff rates
was decreased significantly.  Resolution of the Cabinet of Ministers of Ukraine of 9 December 1998,
No.  1935 “On Making Changes to Rates of Import Du ties for Certain Types of Goods and to Certain
Resolutions of the Cabinet of Ministers of Ukraine” decreased the number of the combined tariff rates
from 217 to 25.
Currently, the average weighted tariff amounts 7% and simple average tariff  amounts 12,74%.
(d) Other duties and charges
Question 9.
The response to question 19 in WT/ACC/UKR/50 states that the Resolution of the Cabinet of
Ministers of Ukraine No.  65, of 27 January 1997 covers the application of customs fees to
imports, that these fees are not tariffs, but are charged "for carrying out customs services,which include customs legalization of goods, holding the goods under customs control, etc."
Please confirm that the fee is applied to all im ports and exports, without exception.  Please list
any exceptions.  If exceptions exist, is the co st of their customs processing drawn from the
revenues collected from other trade, or is it accessed separately?
Reply:
The fee for customs processing is applied to all imports and exports.
Question 10.
Are the revenues collected from these fees kept in a separate account, or are they mixed with
other revenues? Does the cost of processing tr ade exceed the revenues collected from these fees?
If so, by about how much, i.e., what is the diff erence in the overall cost of processing imports
and exports and amount of the revenues collected from this fee?
Reply:
Amounts of customs fees for customs processing of goods are kept in a separate account of
the State Customs Service of Ukraine together with amounts of other types of customs fees.  Amounts
of customs fees are accounted according to codes of their types.
Question 11.
Please indicate to what extent the provision s of this Resolution of 27 January 1997, No. 65
supersede the provisions of the Decree of the Cabinet of Ministers of Ukraine of 2 March 1994,No. 133 "On the Introduction of Modifications to  the Customs Duty".  Does the customs fee of
.15 per cent of customs value still exist?WT/ACC/UKR/59/Add.2
Page 7
Reply:
The Resolution of the Cabinet of Ministers of Ukraine of 27 January 1997, No. 65 approved
the new rates of all types of customs fees, in particular, the customs fee for customs processing.  Upon
entering into force of the Resolution of the Cabinet of Ministers of Ukraine of 27 January 1997, No.65, the customs fee in the amount of .15 per cent of customs value does not exist.
Question 12.
This Resolution of 27 January 1997, No. 65 appears to provide for a zero fee for goods valued at
less than $100, a minimum fee of US$ 5 for goods valued at $100-$ 1,000 and a fee of .2 per cent
of the customs value of the import for goods valued in excess of $1,000 with a maximum fee of
1,000 dollars.  Is that correct?
Reply:
Pursuant to the Resolution of the Cabinet of Ministers of Ukraine of 27 January 1997, No. 65,
the amount of the customs fee for customs processing is the following:
- not imposed, if the customs value of goods and other articles is less than $100;
- $5, if the customs value of goods and other articles is from $100 to $1,000; and,
- .2 per cent of the customs value of goods and other articles, if their value is more than $1,000.
This fee, however, may not exceed $1,000.
There is an exception for customs processing of export of scrapes and wastes of ferrous and
non-ferrous metals.  Pursuant to the Resolution of the Cabinet of Ministers of Ukraine of
7 March 1998, No. 285 “On Making Additions to the Resolution of the Cabinet of Ministers ofUkraine of 27 January 1997, No. 65”, the customs fee is the following:
- not imposed, if the customs value of the above goods and other articles is less than $100;
- $25, if the customs value of the above goods and other articles is from $100 to $1,000; and,
- 1 per cent of the customs value of the above goods and other articles, if their value is more
than $1,000.  This fee, however, may not exceed $5,000.
Question 13.
All other customs fees listed  in the Resolution of 27 January, 1997, No. 65, except for the
"declarant's fee", are flat fees that range up to $50 and the fees for slow clearance of customs
ware houses also appear to be ad valorem, i.e., .1 to .5 per cent of the customs value per day,depending on the length of time.  Is this accurate?
Reply:
The fixed and such that do not depend on a declared value of goods and other articles are
amounts of rates of all other types of customs fees, except the customs fee for staying of goods and
other articles under the customs control and the customs fee for storage of goods and other goods
subject to compulsory transfer to customs offices for storage and mentioned in Article 86 of the
Customs Code of Ukraine.
Pursuant to the Resolution of 27 January 1997, No. 65, rates of customs fees for staying of
goods and other goods under the customs control for each day of staying are the following:
- not imposed for first fifteen (15) calendar days; and,WT/ACC/UKR/59/Add.2
Page 8
- .05 per cent of the total customs value of goods and other articles for each following calendar
day.
Pursuant to the Resolution of 27 January 1997, No. 65, rates of customs fees for staying of
goods and other goods subject to compulsory transfer to customs offices for storage and mentioned inArticle 86 of the Customs Code of Ukraine for each day of staying are the following:
- .1 per cent of the total customs value of goods and other articles for first ten (10) calendar
days; and,
- .5 per cent of the total customs value of goods and other articles for each following calendar
day.
Question 14.
Why does Ukraine charge $1,500 for issuing a cer tificate recognizing the enterprise as a
declarant (for a period up to one year), and an additional fee of $1,000 per annum to continue
or re-register the certificate rec ognizing the enterprise as a decl arant? What is a ''declarant" in
this context, i.e., is it merely an importer who de clares the value of imports, or is it something
else? What service is supplied other than charging the fee?
Reply:
Amounts of customs fees established for issuing a certificate recognizing the enterprise as a
declarant and continuing the certificate’s validity term meet general expenses required for customs
offices in order to undertake measures allowing an enterprise to declare goods.
Pursuant to Article 15 of the Customs Code of Ukraine, a “declarant” is a legal entity or a
physical person who declares goods and other articles.
Pursuant to Article 45 of the Customs Code of Ukraine, declaring of goods and other articles
is undertaking via filing the application of the establ ished form (a cargo customs declaration) with the
accurate information regarding the purpose of goods transfer through the Ukrainian customs border
and regarding goods and other articles themselves, as well as any other information required to
undertake the customs control and customs processing.
Pursuant to Article 46 of the Customs Code of Ukraine, the owner himself or other enterprises
(having permit of the customs office) on the basis of the agreement declare goods and other articles.
Question 15.
Please list, in the response to this question, all customs fees applied to imports whether listed in
Ministerial Decree 65 of 27 January 1997 or not, and cite the legal authority for their
application.
Reply:
The Resolution of the Cabinet of Ministers of Ukraine of 27 January 1997, No. 65 lists all
types of customs fees.
The customs fee is charged in the following cases:- customs processing of export of scrapes and wastes of ferrous and non-ferrous metals;
- customs processing of oil products imported into Ukraine and subject to excise;WT/ACC/UKR/59/Add.2
Page 9
- customs processing of goods and other articles temporarily imported (exported) with
obligation of return export (import) thereof;
- customs processing of transit goods;
- customs processing of goods if they are supplied to the customs ware house;
- staying of goods and other goods under the customs control, for each day of staying;- customs processing of goods and other articles within zones of the customs control on the
territories and in premises of enterprises storing such goods and other articles;
- customs processing of a personal vehicle, if such vehicle is used for transportation of goods
and other articles in volumes subject to duties;
- issuance of certificates to register (re-register) vehicles imported (including temporarily
imported) into Ukraine by individuals, as well as numbered units subject to registration in
bodies of the State Automobile Inspectorate;
- storage of goods and other articles in customs ware houses (except goods and other articles
mentioned in Article 86 of the Customs Code of Ukraine;
- storage of goods and other articles subject to compulsory transfer to the customs office and
mentioned in Article 86 of the Customs Code of Ukraine; and,
- issuance of a certificate to the enterprise on its recognition as a declarant and extension of the
certificate’s validity term.
There are no other fees.
Question 16.
According to reply 19, the Minist erial Resolution covers "customs legalization of goods."  What
does this term mean?
Reply:
In any case, customs fees applied to imports include only the customs fee for customs
legalization of goods and other articles.  This customs fee is charged on the basis of Article 76 of the
Customs Code of Ukraine.  The said Article provides for that “customs fees are charged for customs
legalization of vehicles, heritage, goods and other articles transferred through the customs border of
Ukraine”.
Question 17.
What is involved in the "customs legalization of goods", i.e., does this involve any special
legalization or authentication of import documents at the time of importation? If so; is there a
separate fee charged?
Reply:
The term “customs legalization of goods” means a scope of activities related to pass of goods
into Ukraine or outside, which are transferred through the customs border of Ukraine, in particular,carrying out control over observance of the procedure for goods transfer, their inspection, check-up of
documents required to undertake the customs control, imposing the customs provision, check-up of
the correctness of a customs declaration filling in and processing thereof, calculation of amounts to be
paid and other actions undertaken by customs bodies with the purpose of fulfilling customs legislation
of Ukraine.
Only the customs fee for customs legalization is charged in the course of goods legalization.WT/ACC/UKR/59/Add.2
Page 10
Question 18.
Does Ukraine require foreign exporters customs documents to be "legalized" or
"authenticated" prior to export? If so, please  describe this process and the fees charged.
Reply:
Prior to export, “authentication” of customs documents for foreign exporters is not required.
A separate fee is not charged.
(e) Quantitative import restrictions, including prohibitions, quotas and licensing systems
Question 19.
We understand that as of 1 April, Ukraine has handed the importation of used cars five years
old or over, and established a minimum customs import value of $5,000 on all imported used
cars.
Has Ukraine:a) banned the sale of domestically manufacture used cars five years old or over,
b) established a minimum value for domestic used cars purposes of sale or taxation, orc) prohibited the sale of used imported cars  five years old or over if already in the
country?
We would appreciate an explanation as to how these new measures are consistent with Articles
III, VII or XI of the GATT 1994 or with the WTO Agreement on Customs Valuation.
Reply:
a) no, Ukraine has not banned;
b) pursuant to effective legislation, a minimum customs value is established for certain types of
goods imported into the customs territory of Ukraine, with the purpose to prevent lowering of
such goods customs value;
c) no, Ukraine has not prohibited.
Introduction of the age limit for cars imported into Ukraine is based upon the necessity to
protect environment.
The Government of Ukraine was forced to undertake such step taking into account
oversaturation of the Ukrainian market with used ca rs, resulting in significant injury to environment.
Data of official statistics prove such situation, in particular, 81% of all imported cars within
1992-1997 were of five years old or older; 88% of all imported cars within first six months of 1998were used cars.  Significant recession of car production is taking place.  At the same time, number of
cars per 1000 persons in Ukraine increases.  It proves that cars in Ukraine are used longer, rather than
to be substituted for the new models.
Please also note that the Ministry of Foreign Economic Relations and Trade of Ukraine
together with the State Customs Service of Ukraine prepared the draft schedule for elimination of a
minimum customs value.  Pursuant to the said schedule, elimination of a minimum customs value for
cars is expected before June 2000.WT/ACC/UKR/59/Add.2
Page 11
(h) Customs valuation
Ukraine has made progress toward producing a draft Customs Code that implements the WTO
Valuation Agreement, but the two drafts we have seen to date fall short of containing the
complete language/requirements of the WTO Valuation Agreement.
Question 20.Ukraine's response to Question 31 (page 19) in WT/ACC/UKR/50 refers to the "new draft
Customs Code of Ukraine" which contains a Customs Valuation Procedure.
Is this draft different from the draft provided to the Third Working Party meeting in April
1997? What is the date of the most recent draft? May we have a copy of the most recent draft?
What is Ukraine's timetable for legislative implementation of the new Customs Code?
Reply:
The draft provided to the Third Working Party meeting in April 1997 is the most recent one
as of today.
The draft Customs Code is in the Supreme Rada of Ukraine under consideration.
Question 21.
In addition, we would appreciate a copy of the Resolution of the Cabinet of Ministers No.  1433,
dated 7 December 1996, which is referred to in Question 31. It doesn't appear to be among the
documents provided to the WTO Secretariat.
Reply:
A copy of the Resolution of the Cabinet of Ministers of Ukraine No. 1433, dated
7 December 1996, will be submitted to the Secretariat.
Question 22.
What progress has Ukraine made since the review of its draft Customs Code in 1997 to address
the deficiencies identified in the following areas:
The Ukrainian drafts provided to date do no t incorporate the Interpretative Notes to the
Agreement into law or regulation.
1. The 1997 Draft Ukrainian Customs Code (Article  321) does not list all of the prohibited
bases of valuation in Article 7 of the WTO Valuation Agreement. In particular, it is
missing the prohibition on the use of minimum values.
2. Ukraine's laws and regulations on customs valuation appear to lack a system which
allows the importer to withdraw its goods from customs, pending the final
determination of the customs value, after pr oviding sufficient guarantee in the form of
surety or other deposit covering the ultimate payment of customs duties. Such a systemis called for in Article 13 of the Customs Valuation Agreement.
3. The 1997 Draft Ukrainian Customs Code does not appear to contain provisions for
valuation of "related party transactions" in a WTO consistent manner. Specifically,WT/ACC/UKR/59/Add.2
Page 12
draft Article 358 does not include the related party "tests" contained in Article 1.2 of
the WTO Agreement on Customs Valuation and its respective Interpretative Notes.
Reply:
1. The Resolution of the Supreme Rada of Ukraine of 16 December 1998, No. 318-XIV
approved the draft Customs Code of Ukraine in the first reading.  While working on the new draft,
deficiencies of previous drafts were taken into account.  In particular, it was provided to bring the rule
of customs valuation into compliance with the WTO Agreement on Customs Valuation.
Article 321 of the draft Customs Code lists all of the prohibited bases of valuation as provided
by Article 7 of the WTO Agreement on Customs Valuation.
Concerning the system of establishing minimum customs values, please note that while
preparing the draft Customs Code for its consideration in the second reading, the Customs Service of
Ukraine provided its suggestions as to exclusion of the provision on applying a minimum customs
value from the draft.  Therefore, as already mentioned in previous answers, establishing a minimumcustoms value is a temporary measure undertaken for the purpose of improvement and completeness
of taxation with value added tax which is an internal tax.  Establishing a minimum value is a
temporary practice that will be eliminated in the future.
As of to date, if there is an issue related to the final establishing the customs value, goods
legalized by the customs office will be released for free use on the basis of valuation made by the
customs office.  If within a year from the moment of the customs legalization undoubted prove of the
customs value is provided, duty imposed in excess wi ll be returned (Article 25 of the Law of Ukraine
“On a Single Customs Tariff”).
2. Yes, as of to date, Ukrainian legislation on the issues of the customs value does not provide
for the right of an importer to withdraw its goods from customs prior to the final determination of the
customs value.
3. Article 358 of the draft Customs Code of Ukraine contains the list of conditions on the basis
of which parties are considered as related.  These conditions comply with those set forth in Article 15
of the Agreement on Customs Valuation.  Regarding valuation of transactions between such parties,the Customs Service of Ukraine provided sugges tions on including the Provision for valuation of
“related parties transactions” into Article 358 of the draft Customs Code.
(k) Application of internal taxes on imports
Question 23.
Please clarify Ukraine's justification for differential or discriminatory application of VAT
and/or excise taxes depending on supplier or destination country. (Note: Article XXIV of the
GATT does not cover domestic taxes).
Reply:
As to the issue concerning differential application of Ukrainian laws on value added tax and
excise tax depending on the country of origin of goods, such issue does not reflect Ukrainianlegislation correctly.
Effective Law of Ukraine “On Value Added Tax” gives the clear determination both the basis
of taxation of transactions on sale of goods, includ ing for those imported (transited) into the customsWT/ACC/UKR/59/Add.2
Page 13
territory of Ukraine, and application of tax rates.  The said Law also determines exemption from
taxation for goods of critical import.  Currently, goods of critical import are exempted from taxation
with value added tax regardless the country of origin of such goods.
Therefore, from our point of view, the privileged taxation of goods subject to critical import
does not influence on trade relations with other countries negatively.  Contrary to that, it decreases
prices for produce supplied into Ukraine and creates more favorable conditions for its sale in
comparison with sale conditions for domestically made produce.
Concerning availability in Ukrainian legislation of certain tax privileges for domestic goods
producers mentioned in questions of the WTO Members, such privileges are of forced and temporary
nature.  They are explained by the necessity to create domestic automobile production and stimulationof domestic color TV sets production.
Application of a minimum customs value for taxation purposes of such goods in the course of
their importation into Ukraine was introduced with the aim of preventing numerous cases of avoiding
from taxation as a result of special lowering of taxation basis.
Question 24.
Are there any other taxes applied to imported g oods other than the VAT and excise taxes? Are
there any other taxes other than VAT, excise ta xes, and state duties applied to services?
Reply:
Value added tax, excise tax and import duties are applied to goods (works and services)
imported into Ukraine.  There are no any other taxes applied to goods imported into Ukraine.
Question 25.
Does Ukraine apply VAT to exports to any CIS country? If so, which ones?
Reply:
The Law of Ukraine “On Value Added Tax” provides for that export of goods outside the
customs territory of Ukraine (regardless of the country of designation) is taxed at zero rate.
The Resolution of the Cabinet of Ministers of Ukraine of 5 January 1998, No. 13 “On
Implementation of the Free Trade Agreement between the Government of Ukraine and theGovernment of the Russian Federation” established, beginning 1 February 1998, exemption from
VAT for goods originating from the customs territory of the Russian Federation and designated for
the customs territory of Ukraine.
The Resolution of the Cabinet of Ministers of Ukraine of 18 February 1998, No. 203 “On
Implementation of the Free Trade Agreement between the Government of Ukraine and the
Government of the Republic of Belarus” established, beginning 16 February 1998, exemption from
VAT for goods originating from the customs territory of the Republic of Belarus and designated for
the customs territory of Ukraine.WT/ACC/UKR/59/Add.2
Page 14
Question 26.
Does Ukraine exempt exports of domestic goods to non-CIS countries from the VAT? Does
Ukraine exempt all imports from all CIS countries from application of the VAT? If not, please
explain, excluding the situations listed above, what other goods are zero rated for the VAT?
Reply:
The Law of Ukraine “On Value Added Tax” provides for that export of goods outside the
customs territory of Ukraine (regardless of the country of designation) is taxed at zero rate, i.e., value
added tax for exported goods is not calculated.  At the same time, a payer (except cases of carrying
out export under barter (goods exchange) operations) has the right to obtain VAT amounts paid bysuppliers for raw materials used for production of the exported goods (or paid for the exported goods
under intermediary operations).  Moreover, pursuant to paragraph 6.3, Article 6 of the above Law, it is
not permitted to apply zero rate of tax to operations on exportation (export) of goods (works,
services), if such operations are exempted from taxation on the customs territory of Ukraine according
to paragraphs 5.1-5.2 of the said Law.
The Law of Ukraine “On Value Added Tax” provides for taxation of import goods at 20%
rate.  Certain operations listed in the above Law, as well as goods of critical import importation of
which is made without VAT payment prior to 1 January 1999 are exempted from taxation, while
crossing the customs border of Ukraine.
Question 27.
Are there any other VAT rates of application other than the general rate of 20 per cent
and zero?
Reply:
Along with zero and 20 per cent rate, exemption is applied (please see two previous answers).
Question 28.
Are the excise taxes listed in the response to question 7 of WT/ACC/UKR/50 the only ones
applied? Is the information up to date? Is it accurate to state that Ukraine applies excise taxes
to:
a) all domestic goods not exported; and,
b) all imports from all countries with the exception of goods covered by the Ashkabad
Agreement? If this statement is not accurate; please explain how.
Reply:
Ukraine undertakes unification of excise rates of goods subject to excise.  Among 33 goods
subject to excise, 22 goods entries were unified.  At the same time, taking into account specifically
crisis situation of certain industries, there is a temporary exemption from excise tax for 16 goods of
domestic producers subject to excise.WT/ACC/UKR/59/Add.2
Page 15
List of Goods Subject to Excise with non-unified Rates (16 entries)
Code of the
Goods
Nomenclature
of Foreign
Economic
ActivityDescription Excise on
Imported
GoodsExcise on
Domestic
GoodsValidity
TermLegislative Act
0901 coffee, whether
or not roasted0.2 ECU/kg 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
1604 30 100 caviar (sturgeon
roe)5 ECU/kg 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
1604 30 900 caviar
substitutes3 ECU/kg 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
1605 10 000 crab 2 ECU/kg 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
1605 20 000 shrimps and
prawns0.5 ECU/kg 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
1605 30 000 lobster 2.5 ECU/kg 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
1605 40 000 other
crustaceans1 ECU/kg 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
1806 201806 31
1806 32food
preparations
containing
cocoa, in blocks,slabs or bars0.1 ECU/kg 0 1997-2000 Law No. 767/97-
VR of 23
December 1997
1806 90 110-
1806 90390chocolate goods,
other0.3 ECU/kg 0 1996-2000 Law No. 767/97-
VR of 23
December 1997
4011 10 000 pneumatic tyres 5 ECU/kg 0 1997-2000 Law No. 340/97-
VR of 12 June1997
2101 10110 instant coffee 0.8 ECU/kg 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
4303 10900 fur clothing 30% 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
8520 tape records 5% 0 1996-2000 Law No. 313/96-
VR of 11 July
1996WT/ACC/UKR/59/Add.2
Page 16
Code of the
Goods
Nomenclature
of Foreign
Economic
ActivityDescription Excise on
Imported
GoodsExcise on
Domestic
GoodsValidity
TermLegislative Act
8528 10 television
receivers0.8 ECU/cm
screendiagonal0 1996-2000 Law No. 313/96-
VR of 11 July1996
9401 seats 5% 0 1996-2000 Law No. 313/96-
VR of 11 July
1996
9403 10 metal furniture
of a kind used inoffices5% 0 1996-2000 Law No. 313/96-
VR of 11 July1996
As well as the following:
1. Turnover on sale of cars and cargo/passenger trucks manufactured by Ukrainian enterprises of
all types of ownership from foreign and Ukrainian components, if manufactured no less than 1,000
items per year, shall not be charged with excise tax.
2. The following rates of excise tax for goods produced in Ukraine from domestic raw materials
were temporarily introduced for 1996-2000:
- wine of fresh grape, dry - 0.02 ECU/l (codes 2204.21100-2204.21190; 2204.29100-
2204.29290);
- wine of fresh grape, fortified - 0.1 ECU/l (codes 2204.21310-2204.21390; 2204.29310-
2204.29390);
- wines of fruits and berries- 0.2 ECU/l (2206.00930, 2206.00990);
- cognac and brandy no less than three years old - 0.25 ECU/l/vol % (2208.20);- wine materials sold to intermediary orga nizations and individuals - 0.15 ECU/l (2204.30);
vermouth and other wine of fresh grapes flavored with plants and aromatic substitutes- 0.15
ECU/l (2205); and,
- color TV sets (8528 10) manufactured by Ukrainian enterprises with output of no less than
100,000 per year, producing no less than 1,000 per month, if no less than 20 per cent ofdomestically produced components were used in the production of such TV sets.
3. Rate of excise tax in the amount of 0.2 ECU/l/v ol % was established for ethyl alcohol used by
domestic goods producers to produce juices with alcohol, fruit drinks, liqueurs and perfumes.
4. Stamps of excise tax on imported alcoholic beverages with content of ethyl alcohol from 1.2to 8.5% of volume units were introduced (The Resolution of the Cabinet of Ministers of Ukraine of 10
December 1998, No. 1956 "On Introduction of Stamps of Excise Tax on Imported Alcoholic
Beverages with Content of Ethyl Alcohol from 1.2 to 8.5% of Volume Units, and Making Changes
and Additions to Certain Resolutions of the Cabinet of Ministers of Ukraine Regarding Sale ofAlcoholic Beverages and Tobacco Goods").WT/ACC/UKR/59/Add.2
Page 17
List of Goods Subject to Excise with Unified Rates (22 entries)
- 0207 Edible meat and bones of the poultry; fresh, chilled or frozen
- 1806 Chocolate and other food preparations containing cocoa
2203 Beer made from malt
- 2206 Other alcoholic drinks (for example, cider, perry, mead), mixtures of alcoholic
beverages, nor elsewhere specified or included
- 2208 Undernaturated ethyl alcohol of an alcoholic strength by volume of less than 80% vol;
spirits, liqueurs and other spirituous beverages
- 2401 Not processed tobacco; tobacco refuse
- 2402 Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
- 2403 Other manufactured tobacco and manufactured tobacco substitutes; "homogenized" or
"reconstituted" tobacco; tobacco extracts and essences
- 2710 Petroleum oils or oils obtained from bituminous minerals, other than non-refined,
containing by weight 70% or more of petroleum oils or of oils obtained from bituminous
minerals
- 4011 New tires of rubber- 4203 Articles and apparel and clothing accessories, of leather or of composition leather
- 7113-7114 Articles of jewelry and parts thereof, of precious metal or of metal clad with
precious metal
- 8215  Spoons, forks, skimmers, cake-servers, cake tongs, etc.
- 8516  Electric instantaneous or storage water heat ers and immersion heaters; electric space
heating apparatus and soil heating apparatus; etc. ; other electric appliances of a kind used for
domestic purposes
- 8521 Video recording or reproducing apparatus, whether or not incorporating a video tuner
- 8523 Prepared unrecorded media for sound recording or similar recording, without records
- 8524 Prepared unrecorded media for sound recording or similar recording, with records- 8711 Motorcycles and cycles fitted with an auxiliary motor, with or wit hout sidecars
- 8716 Trailers and semi-trailers; other vehicles, not mechanically propelled
- 9303  Firearms and similar devices which operate  by the firing of an explosive charge
- 9304 Other arms ( air or gas guns and pistols)
For information:
1. The Program of Economic Policy of the Government for the period from 1 July 1998 to
30 June 2001 provides for reduction of the list of goods subject to excise taxes (will be tobacco goods,
alcoholic beverages, petroleum, cars and jewelry (paragraph 25 of the Memorandum).
2. Elimination of privilege as to imposing excise tax on color TV sets of Ukrainian production
(the Law of Ukraine of 20 November 1998, No. 276-XIV "On Making Changes to the Law of
Ukraine "On Rates of Excise Tax and Import Duty for Certain Goods (Produce)") is the condition to
obtain the first tranche of the EU loan.
3. In Ukraine, rates established by the Resolution of the Supreme Rada of Ukraine of
4 February 1994, No. 3951-XII "On the List of Goods (Produce) for which Excise Tax is Established,
and Rates of Such Excise Tax" with changes made by the Cabinet of Ministers of Ukraine of
5 August 1994, No. 526 "On Making Changes to the Li st of Goods (Produce) for which Excise Tax is
Established, and Rates of Such Excise Tax" were in force prior to the adoption of (beginning February
1996) the Laws of Ukraine that approved the list of goods subject to excise and established rates ofexcise tax.  The said resolutions approved differential rates of excise tax on domestic and imported
goods with the purpose of increase of buying capacity of domestic enterprises' produce.WT/ACC/UKR/59/Add.2
Page 18
Adoption of the following Ukrainian Laws:
- “On Rates of Excise Tax and Import Duty for Tobacco Goods” of 6 February 1996, No.
30/96-VR;
- “On Rates of Excise Tax and Import Duty for Ethyl Alcohol and Alcoholic Beverages” of
7 May 1996, No. 178/96-VR;
- “On Rates of Excise Tax and Import Duty for Certain Vehicles and Tires Thereto” of
24 May 1996, No. 216/96-VR; and,
- “On Rates of Excise Tax and Import Duty for Certain Types of Goods (Produce)” of
11 July 1996, No. 313/96-VR,
as well as a range of other legislative acts, making changes to the above laws, established the unified
rates of excise tax for domestic and imported goods except certain goods produced in Ukraine.
Reduction in the level of rates of excise tax for certain domestic goods is aimed at development and
support of their production.  Pursuant to the above Laws, the privileged level of excise will be in force
within the limited period of time.
Question 30.
Are "state duties" in any way related to the li censing of business activity? Are they related to
the right to import or to export? If so in eith er case, please describe the scope and nature of the
tax.
Reply:
State duties do not relate to licensing of business activity and to the right to import or to
export.
Question 31.
In what specific instances are "state duties" appl ied on an ad valorem basis? Why is there a tax
on documents substantiating industrial property rights? Please describe the scope and nature of
title "state duty" in this instance.
Reply:
State duty is charged pursuant to the Decree of  the Cabinet of Ministers of Ukraine “On State
Duty” of 21 January 1993.  State duty is a money fee imposed in judicial and arbitration bodies,bodies of public notary offices, the Ministry of Interior of Ukraine, the Ministry of Foreign Affairs of
Ukraine, municipal, village and city Councils of Peoples’ Deputies and in bodies, provided by
Ukrainian legislation, for effectuating certain actions and issuance of documents by them.
State duty is a simple and proportional one.  The simple state duty is charged in the fixed amount.
The proportional duty is  charged in per centage to the corresponding amount.  State duty is paid prior
to the filing an application or effectuating actions for which state duty is charged or upon issuance of
documents in the corresponding cases.
Decree of the Cabinet of Ministers of Ukraine “On State Duty” of 21 January 1993
establishes rates of state duty.WT/ACC/UKR/59/Add.2
Page 19
Minimum Import Values
Question 32Please confirm that Decree 502 of 26 May 1997 mandates the use of minimum import values for
the purposes of applying excises taxes.
Reply:
Pursuant to Decree No. 502 of the Cabinet of Ministers of Ukraine, dated 26 May 1997,
minimum import values are established for certain goods imported into the customs territory of
Ukraine and subject to excise tax with the purpose of ensuring completeness of payment of valueadded tax.
Please also note that changes were made to Resolution No. 502 of the Cabinet of Ministers of
Ukraine, dated 26 May 1997, (Resolution No. 628 of the Cabinet of Ministers of Ukraine, dated
7 May 1998) with the purpose of preventing establishment  of a minimum import value for goods with
mentioning a company name.
Question 33.
We understand that there is a draft Presidential Decree in development that would mandate
minimum import valuation of certain goods for purp oses of applying the VAT. What is the title
and status of that decree?
Reply:
We do not understand what Decree you mean.
But, as it was mentioned earlier, minimum import valuation is established for certain goods
imported into Ukraine and subject to excise duty with the purpose of preventing the lowering of their
import value and, as a result, ensuring completeness of payment of value added tax (pursuant to
Decree No. 502 of the Cabinet of Ministers of Ukraine, dated 26 May 1997).
Question 34.
Are there any other situations in which Ukrainia n law or practice provides for the use of fixed,
arbitrary, or artificial values for the purpose of valuing imports for taxation? If so, please list
the products, services, and taxes invo lved, and give the legal citation.
Question 35.Concerning the Ashkabad Agreement:
Ukraine has stated that it considers the tax exemptions granted trade under the Ashkabad
Agreement "a minor temporary' measure of support for Ukrainian enterprises until the process
of reform in the national economy is completed in the coming years."
When does Ukraine believe it can eliminate these exemptions?WT/ACC/UKR/59/Add.2
Page 20
Reply:
Question 36.
Regarding the response to question 25 of document WT/ACC/UKR/50, when is Ukraine going
to commit itself to meeting the transparency  and due process requirements of Article X (not
Article XI which covers quantitative restrictions) of the GATT 1994? Are there any
requirements of this Article that Ukraine is not at present capable of fulfilling?
Reply:
What concerns the response to question 25 of document WT/ACC/UKR/50 it emphasized that
Ukraine would commit itself to making seasonal duties  public 45 days prior to their entry into force.
Ukraine abides by provisions of Article X of the GATT 1994.
(о) Safeguard regime
Question 37 .
In WT/ACC/UKR/25 (May 1996), in response to question 42 Ukraine stated that a number of
draft laws were being developed "in order to curtail prejudicial imports of certain goods whichare causing or may potentially cause damage to industry or the agriculture of Ukraine or
restrain the introduction or expansion of production of certain goods, and in order to support
national or foreign investment in indu stry or agriculture...." These included:
- "On Protection from Imports which are Dumped by other Countries, Customs or
Economic Unions";
- "On Protection from Imports which are Subsidized by other Countries, Customs and
Economic Unions";
- "On the General Import Regime";
- "On the Ukrainian International Trade Tribunal";
- "On Changes and Amendments to Some Legislative Acts of Ukraine due to the adoption
of the law of Ukraine "On Protection from Imports which are Dumped by otherCountries, Customs and Economic Unions".
Subsequently, Decree of the President of Ukraine, Kyiv, 27 June 1996, No 478/96 was enacted,
"On the Application of Safeguard Measures Pursuant to the Principles and Disciplines of
GATT/WTO" was proclaimed, covering industrial goods, but not agriculture, textiles, ormeasures taken to protect the balance of pa yments. In 1997, the Law of Ukraine No, 468/97-
VR"On the State Regulation of import of Agri cultural Produce" was passed, providing, inter
alia, for safeguards in the area of agriculture.
What is the relationship between "Regulation on  the procedure for applying import restrictions
in conformity with the rules and disciplines of the GATT/WTO" and the Presidential Decree of
the same name? Is the "Regulation" currently in effect?
Reply:
Considering the fact that agriculture is one of the most important branches of Ukraine’s
economy, the President of Ukraine adopted the Decree “On Peculiarities of Applying Tariff
Restrictions to Import of Agricultural Produce pursuant to Rules and Principles of GATT/WTO
system” No.  412/97of 13 May 1997. In fact, the Decree’s mechanisms reinforced the President’sWT/ACC/UKR/59/Add.2
Page 21
Decree “On Approval of the Regulation on the Pr ocedure of Applying Restrictions on Import of
Goods pursuant to Rules and Principles of the GATT/WTO System” and laid the methodological
foundation for economic analysis of the agricultural produce market in Ukraine, determination of
economic expediency and necessity of taking additional tariff-related as well as non-tariff-related
measures.
However, pursuant to Item 3 of the Resolution No.  338/97-VR of 12 June 1997 of the
Supreme Rada of Ukraine the draft Law of Ukraine “On Peculiarities of Applying Tariff Restrictions
on Agricultural Produce Import pursuant to Rules and Principles of the GATT/WTO system”
submitted by the President of Ukraine was rejected.
Presidential Decree "On the Application of Sa feguard Measures pursuant to the Rules and
Principles of GATT/WTO" of No.  478/96 of 27 June 1996 and the Regulation approved by this
Decree were prepared on the basis of analysis of the procedures for protection of the domestic market
and national manufacturers against unfair import practices which are used in developed countries and
considering respective documents (agreements) of the GATT/WTO system.
However, pursuant to its Preamble, President’s Decree “On the Procedure of Applying Import
Restrictions on Import of Goods pursuant to Ru les and Principles of the GATT/WTO system” in
conformity with Item two of Article 25 of the Constitutional Agreement between the President of
Ukraine and the Supreme Rada of Ukraine “On the Basic Principles of Organization and Functioning
of Public Administration and Self-Government in Ukraine ” was effective for the period of time priorto the adoption of a new Constitution of Ukraine – 28 June 1997.
Question 38 .
The Law No. 468/97-VR deals with, among othe rs, measures to be taken for purposed of
protecting domestic agricultural producers against import.
Are there any additional regulations, resolutions or presidential decrees covering similar issues?
If so, may we have them?
Reply:
The changes and amendments have been made to the Law of Ukraine No.  468/97 “On the
State Regulation of Import of Agricultural Produce” by means of the Laws of Ukraine:
- No.  644/97-VR of 19 November 1997;
- No.  794-VR of 30 December 1997;- No.  32-VR of 16 January 1998;
- No. 198/98-VR of 5 March 1998;
- No.  439-XIV of 18 February 1999;
- No.  518- XIV of 18 March 1999;
- No.  597- XIV of 9 April 1999.
The system for regulating foreign trade in agricultural produce is described in “The Review of
Trade Policies: Agriculture” which has been passed on to the WTO Secretariat.WT/ACC/UKR/59/Add.2
Page 22
Question 39-48
President’s Decree No.  478/96Article 2.1 of the Safeguard Agreement provides for conditions under which safeguard
measures may be taken, and Article 5 of the Safeguards Agreement specifies existing
restrictions on the application of such measures. Article 5 also specifies that safeguard measures
may be applied "only to the extent necessary to prevent or remedy serious damage inflicted or
threatening to be inflicted and to facilitate the process of adjustment of Ukraine’s national
economy to the consequences of such damage.
How do two alternative tests mentioned in item 4 of the Regulation approved by the President’s
Decree No.  476/96; i. e. tests concerning increase in import as well as other similar measures
(presumably, those that are not relating to import  increase) that inflict or may inflict serious
damage relate with Article 5 of the Safeguards  Agreement in the part concerning conditions of
applying safeguards measures?
We also note that Item 4 does not contain the phrase "and to facilitate the process of adjustment
of Ukraine’s national economy to the consequences of such damage.”
Does the Presidential Decree provide for measur es to facilitate adjustment of the national
economy to consequences of such damage solely for purposes of coping with foreign competitionor it deals solely with protection?
Item 7 of the "Regulation" approved by the Presidential Decree No.  478/96 stipulates that "
circumstances under which the dynamics of imports supply of any product, irrespective of its
origin, lead to increased" volumes of import, or " lead to serious damage to domestic industry,"relevant ministry or branch of industry notifi es the Interdepartmental Commission on Imports
Regulation thereof. Article 3 of the Safeguards Agreement requires that an investigation be
conducted for the purpose of determining whether a safeguard measure should be taken.
What guarantees are provided for against applicatio n of provisions of Item 7 in case there is a
threat of increase in import that would restrict its application only if tangible evidence is
available?Item 13 of the "Regulation" is aimed at enforcement of provisions of Article 4.2(a) of the
Safeguards Agreement. At the same time we point out that there are some linguistic differences
which hopefully will be clarified:
In Ukrainian this provision is so worded that it  arises questions whether the language of item 13
reflects the standard provided for in the Safeguard Agreement, i.e. imports that "have caused
or are threatening to cause serious damage to the national economy "?
Is the concept of "available capacities utilizatio n" reflected in the Ukrainian version as one of
the factors to be evaluated during an investigation?
Please clarify the meaning of Item 17 of the aforementioned "Regulation." What exactly is
meant by “information” referred to in the text?
Article 3 of the Safeguards Agreement establishes that all interested parties shall be given an
opportunity to present their opinions and argu ments in the course of an investigation to
determine whether a safeguard measure should be taken.WT/ACC/UKR/59/Add.2
Page 23
Why does Item 18 of the Regulation " require th at parties prove they are "actually sensitive" to
the findings of an investigation? What does '-actually sensitive'" mean and how is it consistent
with the provisions of Article 3?
Item 22 of the "Regulation” specifies that pr ovisional safeguard measures may be used under
special circumstances when "delay may cause seri ous damage." However, on the other side, we
point out that Article 6 of the Safeguards Agreem ent specifies that provisional measures can be
taken only in case such a delay would cause serious damage.
Is this also the case in the Ukrainian text?
Article 3.2 of the Safeguards Agreement provides for confidentiality of information, public
summaries, and that confidential information may be used only if it is verified through an
independent source. Item 29 of the "Regulation" provides that confidential information may be
kept undisclosed if significant negative consequences would arise from its disclosure, but it does
not determine specific circumstances under which the Commission may use undisclosed
confidential information.
Is there any provision in any Ukrainian law or regulation restricting the use of undisclosed
confidential information by the Commission (a s required by Article 3.2 of the aforementioned
Agreement)? If yes, please identify and give a short account of it.
Item 35 of the "Regulation" envisages that the period of time during which a safeguard measure
is applied may be extended for a number of reasons among which are "evidence of a
deterioration of the economic situation." On the other side, Article 7.2 of the Safeguards
Agreement requires that there be "evidence that the industry is adjusting" and makes no
reference to deterioration of the economic situation.
In our opinion, Item 35 of the "Regulation" establishes somewhat different grounds for
extension of the aforementioned period of time and does not consider “national economy
adjustment” as one of them. Please explain how provisions of Item 35 correlate with Article 7.2.
Article 7.4 of the Safeguards Agreement provides that the provisional measures expected to be
in place for a period of time exceeding one ye ar shall be gradually liberalized "at regular
intervals over the period of their application." In  Item 37 of the Regulation the last phrase is
missing.
Why is the last phrase missing in Item 37?
Reply:
President of Ukraine’s Decree “On the Procedure of Applying Import Restrictions to Import
of Goods Pursuant to Rules and Principles of th e GATT/WTO system” in conformity with Item two
of Article 25 of the Constitutional Agreement between the President of Ukraine and the Supreme
Rada of Ukraine “On Basic Principles of Organiza tion and Functioning of Public Administration and
Self-Government in Ukraine ” was effective for the period of time prior to the adoption of a new
Constitution of Ukraine – 28 June 1997.
Issues concerning safeguard measures shall be governed by laws incorporated into the
Antimonopoly Code of Ukraine (see The Revi ew “Ukraine”: its way to the WTO).WT/ACC/UKR/59/Add.2
Page 24
3. Internal policies affecting foreign trade in goods
(а) Industrial policy, including subsidy policies
Question 49.Concerning "The State Program on the Aviati on Industry Development"; please outline
Ukraine's plans to support national ai rcraft and aircraft engine development.
Reply:
Ukraine’s plans on promoting development of national aviation are contained in the
President’s Order No.  15/94 “On Additional Measur es for Developing the National Aviation Industry
in Ukraine” approved in Kyiv on March 2, 1994 and in the Cabinet of Ministers of Ukraine’s
Resolution No. 249 “On Measures Aimed at Implementation of National Aircraft-Development
Programs” of 29 February 1996.
Specifically, the Order provided for the establishment of international leasing transport
aircraft company and an international consortium for serial production of the AN-70 aircraft. Pursuant
to the Resolution some aircraft-manufacturing enterprises were authorized to keep all foreign
currency funds earned for production and commercial operations for purposes of financing the
Aircraft Construction Development Program.
The Resolution of the Cabinet of Ministers of Ukraine “On Measures for Implementation of
National Aircraft Construction Programs” provided  for elaboration of a long- and medium-term
crediting of aircraft construction enterprises.
The Resolution also provides for establis hment of the Interdepartmental Board for
Coordinating Activities relating to implementation of national aircraft construction programs and the
mechanism of financing national aircraft construction programs.
Question 50.
In September 1997 Ukraine adopted a new law "On Incentives to Encourage Auto
Manufacturing" which contains provisions selectively exempting imports and domestic
production of car-manufacturing companies with a sufficiently large share of foreign
investment which use local inputs, from taxes and tariffs, imposed on other similar imports.
We request a detailed listing of the provisions  of this law that cover taxes, tariffs and
restrictions on competing imports, or any ot her measures intended to stimulate domestic
automobile production and Ukraine's evaluation of how they conform to the provisions of
GATT Articles and the WTO Agreements on Subsidies and Countervailing Measures and on
Trade Related Investment Measures.
Reply:
Pursuant to the Law of Ukraine “On Incentives to Develop Auto-Manufacturing Industry in
Ukraine” (No.  535/97-VR) adopted on 19 September 1997 by the Supreme Rada of Ukraine which came
into force on 23 October 1997 the following privileges shall be granted:
1. Import duty shall not be levied on parts and components used by enterprises for auto-making.
2. The VAT shall not be levied on parts and components used by enterprises for auto-making.WT/ACC/UKR/59/Add.2
Page 25
3. The land tax, profit tax and the amount of money to be paid to the State Innovation Fund shall
not be levied.
However, aforementioned privileges shall be granted to all enterprises that operate pursuant to
the conditions mentioned below and as long as they satisfy these conditions (up to 1 January 2008): i. e.they manufacture autos and spare parts, have domestic or foreign investment to the amount no less than
US$ 150 million in monetary form plus copyright to a car make and technology of their manufacturing,
reinvest profits, do not lay off workers and raise the level of localization of production in conformity with
the plan approved by the Cabinet of Ministers of Ukraine.
(b) Technical regulations and standards
Question 51.
Please identify specific measures and practica l changes which have been implemented over the
last year in the Ukrainian system of standards and technical regulations that brought the system
in line with future WTO TBT obligations.
Reply:
On 1 July 1998 State Standards EN 14 000 entered into force on a voluntarily basis, and on
11 March 1999 the Procedure for Introducing Module Approach to Conformity Evaluation entered intoforce taking into account requirements set forth in European Union’s directives on a voluntarily basis as
well.
We also would like to add that from 1998 the State Committee on Standards issues the quarterly
“Standardization, Certification, Quality” in which all draft laws and standards being prepared forconsideration are published for public discussion.
Question 52.
Please, outline basic principles of scheduled actions (action plan) and a separate schedule for
bringing the Ukrainian system in line with WTO TBT obligations.
Reply:
Circulated in WT/ACC/UKR/59/Add.1/Rev.1
Question 53.
When will appropriate Ukraine au thorities publish a fee schedule for certification? When will it
provide information on the average processing time for products and services requiring
conformity assessment?
Reply:
The "Regulations on Defining Costs of Works on Certification of Goods and Services," which
describe the labour norms followed by certification bodies while certifying specific goods are
reproduced in document WT/ACC/59/Add.3.WT/ACC/UKR/59/Add.2
Page 26
Question 54.
WT/ACC/UKR/50 indicates the National Council on Quality Issues has a broad mandate to
analyze and prepare proposals for improvements in technical and regulatory infrastructure,
Please explain in further detail the role of the National Council on Quality and outline its
accomplishments since its establishment more than  a year ago, as well as its future work plan.
Please provide further information on its relation to Derzhstandart.
Please provide a more detailed response to question 39 concerning the activities of the National
Council on Quality Issues and the National Council  on Accreditation. What progress have these
councils made on harmonizing Ukraine's laws with international standards?
Reply:
In accordance with the National Council on Quality. This body formulates the foundations of
state technical regulation policy, including the area of accreditation. Presidential Decree No. 375,enacted 24 May 1996, charges the State Standards Committee of Ukraine (Derzhstandart) with
oversight duties relating to accreditation policy. This entity is responsible for the accreditation of
certification bodies as well as testing laboratories in the state certification system UkrSEPRO.
The Cabinet of Ministers of Ukraine in 1998 adopted recommendations for drawing up a state
program for quality and services improvement, which had been drafted by the National Council on
Quality at its first plenary session.
The Council has sponsored, for the past two years, the European Week of Quality, which
involves a series of seminars, competitions and exhibitions accenting on high quality standards.
Question 55.
WT/ACC/UKR/50, Question 42:
Could we see a draft version of the Law "On the Responsibility of Producers and Distributors
for the Production and/or Distribution of Subst andard and Hazardous Products"? What is the
current status of the Law? And when do you expect it to be enacted?
Reply:
The text of the Draft Law of Ukraine "On Responsibilities of Suppliers for Manufacturing and
Selling Poor Quality and Hazardous Produce,” which is presently being examined by the SupremeRada of Ukraine is reproduced in document WT/ACC /UKR/59/Add.3.  It is impossible to say exactly
when this draft will become a law, insofar as the Supreme Rada and the Presidential Administration
must examine all draft laws.
Question 56.
Ukraine requirements for pre-market certification of electronic and electrical appliances are
more stringent than that required by other countries to ensure product safely,
Please describe what steps Ukraine is taking to evaluate its current certification requirements
with a view to removing unnecessary barriers to trade.
Please provide an explanation as to how Ukraine can justify its requirements for product model
and individual consignment approval for imports, combined with additional quality systemWT/ACC/UKR/59/Add.2
Page 27
certification, for products that typically are not subject to pre-market certification in other
countries,
Please provide information on specific actions Uk raine will take to move away from prescribing
mandatory third-party certification to allow for purchasers to rely upon compliance withstandards and certification on a voluntary basis,  with Government retaining the right to "spot
check" compliance with rele vant standards through post-market surveillance.
Reply:
The certification of imported goods that are potentially dangerous to the consumer, in
particular, low-voltage electric appliances and electronic goods, takes place according to therequirements of current Ukrainian standards. The ex isting discrepancies in technical requirements and
certification of goods do not contradict the provisions of Article 2.4. of the Agreement on Technical
Barriers to Trade and result from the state of Ukraine's power supply system and the necessity of
maintaining certain radio interference norms.
In accordance with UkrSEPRO certification guidelines, mass-produced goods are certified for
a period from one to three years. Where the certifying body receives a quality system and tests
samples of the goods in question, the resulting certificate is valid for three years.
Question 57.
Current Ukraine policy for accepting the resu lts of conformity assessment procedures
conducted by bodies in other countries appears to overemphasize the need for a bilateral
cooperation agreement, rather than the need to have confidence that the product conforms to
the necessary standard or technical regulation . Article 5 of the TBT Agreement emphasizes the
right of suppliers to have access to conformity assessment procedures on a non-discriminatory
basis, and Article 6,1 obliges Members to accept the results of conformity assessment
procedures conducted by bodies in other Members provided they result in an equivalent
assurance of conformity to the relevant standard  or technical regulation. Article 6.1 does not
require the conclusion of an agreement for this purpose. Article 6.4 encourages governments to
accredit or otherwise evaluate and recognize conformity assessment bodies located in the
territories of other Members on a non-discriminatory basis.
Does Ukraine recognize testing laboratories or product certifiers accredited by accreditation
bodies in other CIS countries?
Does Ukraine recognize product certificates issued by other CIS countries, under existing
regional or bilateral agreements? If yes, does this recognition apply only to products
manufactured in those countries or is this rec ognition also extended to imported products that
have been certified?
Will Ukraine authorities accept applications for accreditation from bodies located in other
countries? If not, are there plans to do so? If no t, why not? Please describe the actions Ukraine
is taking to ensure proper consideration of the ra nge of alternatives in establishing and revising
its conformity' assessment procedures
Please provide updated information on the propos ed legislation to move away from pre-market
certification requirements and which will allow supplier's to declare the conformity of their
product to relevant standards and technical regul ations ("On the Responsibility of Producers
and Distributors for the Production and/or Distribution of Substandard and Hazardous
Products"). For which sectors and/or for which products will mandatory' third-partyWT/ACC/UKR/59/Add.2
Page 28
certification continue to be required? On what basis will this determination are made? When is
the legislation anticipated?
Reply:
a/b) Ukraine recognises the results of testing laboratories and/or certifying bodies that are
accredited by national certification institutions, on the basis of bilateral intergovernmental agreements
providing for reciprocity in quality control, concluded with various CIS countries. These agreements
do not apply to goods produced by "third countries."
c) As far as non-CIS countries are concerned, Ukraine conducts mutual accreditation of testing
laboratories in accordance with bilateral intergovernmental agreements.
d) The decision as to which methods of conformity assesment of goods will be applied,
including the supplier's declaration that certain goods comply with legal requirements, will be made
on the basis of the Law of Ukraine " On Responsibilities of Suppliers for Manufacturing and Selling
Poor Quality and Hazardous Produce," the Law of Ukraine "On Standardization and Certification," on
legislative acts drafted in accordance with Cabinet of Ministers Resolution No. 244, dated
19 March 1997, " On Measures for Gradual Introduction in Ukraine of European Union Directives,
Sanitary, Ecological, Veterinary and Phytosanitary Rules, and International and European Standards"
and on the Procedure for the Introduction of Module Approach in the Conformity Assessment in
Accordance with Directives of the European Union.
(c) Sanitary and phytosanitary measures, including measures taken with respect to import
Question 58.
Could Ukraine identify the offices or agencies th at will operate as its notification point or
inquiry' point for information, as required in Annex B of the SPS Agreement?
Reply:
In 1998, the Notification Service and the National Inquiry Point under the framework of Eco-
hygiene and Toxicology Institute named after L.I.Medved under the Ministry of Health Protection ofUkraine were established to provide information to WTO member countries regarding approved
sanitary measures, national procedures on monitoring and control, risk assessment procedures, other
information in compliance with the SPS Agreement.
Question 59.
Please indicate actions Ukraine is taking to established procedures and the legislative authority
to publish notices of proposed SPS measures in advance and in a manner that allows WTO
members to become acquainted with such proposal s, as required in Annex B, paragraph 5 (a) of
the SPS Agreement.
Reply:
During the last year the Ministry of Health Protection of Ukraine became more active in
publishing Sanitary Norms and Rules, as well as other documents pertaining to the sanitarylegislation, in order to improve the principle of transparency regarding sanitary and phytosanitary
actions in Ukraine. As of now the most important documents pertaining to the sanitary legislation
have been changed the way that now they take in to account the needed provisions on harmonizationWT/ACC/UKR/59/Add.2
Page 29
with the European [EU] legislation, and are being published by the Ministry of Health Protection of
Ukraine in the form of selections of normative documents which can be provided to anyone.
Question 60.
Please provide a. detailed description of Ukraine's domestic conformity assessment procedures
and a comparison of these procedures with those applied to imports to demonstrate how they
are as rigorous as the requirements affecting imported products.
Reply:
After conducting the mandatory state sanitary and hygiene expertise for a new type of
products, imported to Ukraine for the first time, the conclusion of the state sanitary and hygiene
expertise is provided under the set form. The procedure takes 5 to 7 working days. The hygiene
conclusion on the product imported to Ukraine for the first time is granted for 1 year to 5 years with
the ability to further extend it. “The new” products are considered to be the products which are
imported to Ukraine for the first time (for which the conclusion of the state sanitary and hygieneexpertise has not been provided before), the products from the new manufacturer, new supplier, the
products with changed composition, or manufactured under the new technological  process.
Ukraine applies the same sanitary measures and requirements in regard to both domestically
manufactured goods and imported ones. Ukraine is ready to activate and promote bilateral works inthe arena of cooperation with expert bodies a nd organizations recognized throughout the world.
Question 61.
Please identify concisely what legislation, regulations and administrative procedures are
currently in force or being drafted that  implement SPS measures in Ukraine.
As appropriate, please discuss how they meet the requirements of the SPS Agreement, or how
their requirements are based on sound science and appropriate risk assessment.
Reply:
Sanitary measures are being implemented and applied in Ukraine in compliance with the Law
of Ukraine “On Insuring Sanitary and Epidemic Safety of the Population” at all stages of design,
implementation, production, import/ export, transportation, sales, use (application, consumption) of
produce, its processing, recycling, or destroying (if need be).
See Reply 65.
Question 62.
Since 1997, Ukraine has banned the import of anim al offal, mechanically de-boned meat, hot
dogs, franks, and sausages from a number of countries.  None of the animal diseases cited as
reasons for this ban occur in the member co untries. If Ukraine cannot produce scientific
evidence as to why the importation of these products must be banned, then Ukraine should be
prepared to rescind the ban in order to be in compliance with the Agreem ent on the Application
of Sanitary and Phytosanitary Measures.
We ask that the bail on member products be li fted. We would appreciate Ukraine's explanation
for the ban vis-a-vis member products.WT/ACC/UKR/59/Add.2
Page 30
Reply:
In accordance with the "Veterinary Requirements for the Import of Meat and Meat Products,"
meat may be imported into Ukraine in the form of carcasses, semicarcasses and quarters with clearly
visible stamps of the state veterinary inspection and the name and number of the enterprise that killedthe animal.
Question 63.
Ukraine's response to Question 55 in WT/ACC/UKR/50 States ''the revision of the rules dealing
with the procedures to recognize trading partne rs' conformity assessment procedures, sanitary
or phytosanitary certifications, or declarations of conformance is not completed."
How far along is the review process and when will it be completed?
Reply:
The activities on reconciling a great number of documents and sanitary legislation in general
with the WTO requirements on sanitary norms require a respective transition period; its duration can
be defined by the year 2001.
Question 64.
In response to Question 62 in WT/ACC/UKR/50 concerning treatment of "new  food products,"
Ukraine states that "the sanitary standards for imported goods are practically the same as those
applied to domestic products,"
What is meant by "practically the same"? We co ntinue to seek confirmation from Ukraine that
imported products will be subject to the same certification requirements as domestic products.
Reply:
We confirm that imported products are subject to the same sanitary requirements that
domestically produced items are subject to.WT/ACC/UKR/59/Add.2
Page 31
Question 65.
We request an update on the implementation of Cabinet of Ministers Resolution of
19 March 1997, No. 244 "On Measures for Gradual Introduction in Ukraine of European Union
Directives: Sanitary, Ecological, Veterinary a nd Phytosanitary Rules, and International and
European Standards" and on the development of the Program of Developing a Complex of
Sanitary, Sanitary-Chemical, Toxicolo-Hygienic, Phytosanitary and Veterinary Rules, as
detailed in Ukraine's response to Question 69 in WT/ACC/UKR/50.
Reply:
To implement Cabinet of Ministers Resolution No. 224 and in order to harmonize sanitary
and phytosanitary norms of Ukraine with the European legislation within the first 6 months of 1999,
the following measures have been taken: Cabine t of Ministers Resolution of 24 April 1999, No. 696
“Procedures for Sanitary Protection of Ukraine’s Territory” was approved; “State Sanitary Rules and
Norms of Application of Lacquer and Paint Materials on Vehicles”, “State Sanitary Rules and Norms
for Barber-Shops”, “State Sanitary Rules and Norms of Health Safety Regarding Games and Toys”were drafted and approved
“State Sanitary Rules and Norms of Health Safety for Cloths and Footwear”, “State Sanitary
Rules and Norms for Fish and Seafood Products’ Manufacturing Enterprises and Sea Vessels” were
prepared for approval.
The laws of Ukraine “On Protection of Population from Infectious Diseases”, as well as on
“State Sanitary Rules and Norms for Cemeteries”, “Main Sanitary Rules of Work with Ion Emanation
Sources in Ukraine” are being drafted.
Question 66.
We need further clarifications as to what th e following statement in Reply to Question 70 in
WT/ACC/UKR/50 means: "the buyer of meat preserves the right to involve his veterinary
experts into selective pre-slaughtering examination of the animals and veterinary and sanitary
expertise of the carcasses and intestin es at the exporters’s enterprises."
Does this imply that a Ukrainian vet ha s to be present in the slaughter plant?
How does this conform to the requirement of the SPS Agreement that importing countries be
prepared to accept exporting countries' in spection systems based on equivalency?
Reply:
The buyer reserves the right to conduct selective pre-killing inspections, as well as veterinary-
sanitary inspections of the meat carcasses and intern al organs utilising his own specialists, on location
at the exporter's plant. This does not mean, how ever, that every processing plant will undergo
inspection.
Ukraine does not object to recognising exporter countries' inspection systems on the basis of
equivalency, as the agreement on sanitary and phytosanitary measures permits.
Question 67.
Concerning the response to Question 71 in WT/ACC/UKR/50: Ukraine's prohibition on the
import of poultry meat that has received natural hormonal medicine and antibiotics duringWT/ACC/UKR/59/Add.2
Page 32
growing, feeding, or before slaughtering would not seem to be in conformity with the SPS
Agreement or recent WTO Panel decisions,
Does this regulation apply to any other kinds of meat?
We also request clarification as to what the requirements for tetracycline and grisein are.
The unit is listed as "unit per gram" and it is unclear what this means.
Reply:
In accordance with the Law of Ukraine "On Veterinary Medicine," the use of biological stimulators,
antibiotics and hormones to speed the growth process or increase the productivity of animals andpoultry is strictly forbidden.
As far as tetracycline and grisein are concerned, the maximum permissible concentration that
may be present in fresh, chilled or frozen poultry is indicated in units per gram of product or raw
material.
(e) State-trading practices
Question 68.
Ukraine has not to our knowledge, filled out th e questionnaire on state trading included in.
WT/ACC/1.
1. We would appreciate receiving comprehensi ve information on Ukraine's state trading
enterprises and on state owned enterprises that h ave a significant or special role in Ukraine's
international trade.
2. Please supply this information on an updat ed list of state trading enterprises (updated
from WT/ACC/UKR/1), including the additional information already supplied on the
agricultural enterprises.
Reply:
1. Since 1996, the proportion of state enterprises to the total number of manufacturer enterprises,
as well as their portion of total manufacturing has shown a clear diminishing tendency. If in 1996 the
portion of enterprises with a state form of owne rship amounted to 28.8 per cent of all manufacturing
enterprises, in 1997 - 24.3 per cent, in 1998 - 19.9 per cent, then for the first quarter of 1999 thisfigure stood at 16.6 per cent. In actuality the state-owned portion of all manufacturer enterprises was
40.6 per cent in 1996, 34.7 per cent in 1997, and in 1998 and the first quarter of 1999 it stood at
approximately one third.
Export enterprises with a state form of ownership comprised 1,500 (or seven per cent of all
exporters), in 1997 - 1,200 (7.4 per cent), in 1998 - 1,100 (7.3 per cent) and in the first quarter of this
year - 600 (8.1 per cent). The relative increase in the proportion of state-owned exporters and their
share of total exports is a result of the drastic reduction in the total number of enterprises exporting
goods. State-owned exporters' dole of the total volume of exports comprised 17 per cent in
1996/1997, 18.6 per cent in 1998, and 19 per cent in the first quarter of 1999. The increase in this isnot connected with an absolute increase in trade vo lume by state-owned enterprises, but rather with a
general decline in export volumes.WT/ACC/UKR/59/Add.2
Page 33
Import enterprises with a state form of ownership comprised some eight per cent over the past
three years, and in the first quarter of 1999 - 6.6 pe r cent of all import enterprises. The relative value
of goods imported by state-owned enterprises to the total value of all goods imported has decreased
from 20 per cent in 1996 to almost 10 per cent in 1997, 1998 and the first quarter of 1999.
Over the past three years and the first quarter of 1999 more than 99 per cent of all enterprises
participating in external trade in goods, conducte d operations whose value was no greater than three
per cent of the total volume of expert-import of goods. Since 1996, the Mariupol Metallurgical
Conglomerate named after Illyich, the Open JSC Azovstal Metallurgical Conglomerate, the Open JSC
Zaporizhia Metallurgical Conglomerate "Zaporizhstal", the Closed JSC "United Energy Systems of
Ukraine", the JSC Ukrgazprom (all with collective form of ownership), and the Kryvyi Rig State
Metallurgical Conglomerate "Kryvorizhstal" (state -owned), conducted external trade operations in
goods with a value of 3-10 per cent of general (all-Ukraine) indicators. National JSC Naftogaz
Ukrayiny joined these companies in the first quarter of 1999.
2. As of 1 April 1999, the Unified State Register of Enterprises and Organizations of Ukraine
contains 10,907 state-owned [public] enterprises, and 13,609 state municipal enterprises.
In compliance with the Ukraine’s legislation enterprises of any type of property ownership
can be involved in foreign economic and trade business activities.
The list of the largest state-owned enterprises will be submitted later.
Question 69.
We would also appreciate information on the following, either in response to the questionnaire
or separately:
The current status of all state agricultural tradin g enterprises (including those listed in Reply
255 of WT/ACC/UKR/l how these enterprises have been/will be privatized) the government
share in these enterprises, and the legislation th at specifically ended the rights and privileges
that these organizations traditionally received. Without this legislation, we have no way of
verifying that these agencies no longer maintain exclusive or preferential rights as a state
trader.
A report on the process by which purchases fo r State needs are made, including quantities,
value, average prices, recipients, government agencies/firms responsible for making (or
allocating) purchases, and how they are chosen.
A clear picture of how barter deals with CIS and other countries are implemented, the
volume/value of the transactions, and the government agencies/firms involved in implementing
these deals.
Reply:
1. It is worth mentioning here that the current legislation of Ukraine does not provide for
exclusive or specific rights or preferential treatment for enterprises, which are in the state ownership.
Information about state agricultural enterprises will be submitted later.
2. The process of procurement for state needs of agricultural products is governed by the
Cabinet of Ministers Resolution of December 19, 1997, No. 1417 “On Approving the Procedures forWT/ACC/UKR/59/Add.2
Page 34
Defining Volumes of Agricultural Goods and Food Products for State Needs and Their Sales from
State Resources through the Stock Commodity Market.”
In Ukraine there are no separate lists of enterprises to which norms and rules in the sphere of
state procurement are applied.
3. The procedures on conducting barter deals in the sphere of foreign trade are introduced by the
Law of Ukraine “On Governing Commodity Swap (Barte r) Operations in the Sphere of Foreign Trade
Activity” of 23 December 1998, No.  351-XIV.
In compliance with the Law all Ukraine’s subjec ts [operators] of foreign economic activities
can participate in conducting barter deals.
The regime set forth by the law on conducting barter operations between Ukraine’s subjects
of foreign economic activity and foreign business operators registered as such in a Commonwealth of
Independent States country member does not differ from the regime on conducting such deals with
business operators registered in other countries.
In compliance with Article 4 of the Law in orde r to increase in-flow of hard currency into
Ukraine, stabilize national money unit and rehabilitation of country’s financial and banking system in
general it may be prohibited to conduct commodity swap (barter) deals in the sphere of foreign
economic activities with goods (works, services) included into the list compiled by the Cabinet ofMinisters of Ukraine.
Such list was approved by the Cabinet of Ministers Resolution of 12 June 1998, No. 854 “On
List of Goods (Produce, Works, Services) Whos e Export is Prohibited Under Barter (Commodity
Swap) Operation.” In order to minimize hard currency expenditures related to the current instability ofnational money units of CIS member countries, and to increase balance level of trade turnover
volumes with those countries the validity of this Resolution was temporarily discontinued until the
adoption of a separate decision regarding the conducting of barter (commodity swap) deals with
business operators from CIS member countries.
(l) Government procurement
Question 70.
Ukraine has stated its intent to join the G overnment Procurement Agreement. We commend
Ukraine for that decision, and seek the followin g information on recent legislation designed to
bring its procurement laws into compliance with WTO disciplines:
We would like to clarify whether Resolution No.  694 as amended by Resolution No. 1058
represents the current procedures that must be  used by Ukrainian government entities when
conducting procurements. Is this the case?
Reply:
The said resolutions lay down the rules and procedures for conducting state purchases. In
reality no state institution can effect a purchase,  valued at 10,000 UAH or more without a document
that confirms that a tender has been conducted (the Cabinet of Ministers Resolution No 1048, dated24 September 1997).
Payment is made by the state treasury and authorized banks only in accordance with a
protocol or confirmation of tender. Point No.  4 of the above resolution regulates state purchases.WT/ACC/UKR/59/Add.2
Page 35
Question 71.
Are any other procurement laws or regulations also in effect? For example, in
WT/ACC/UK.R/25 (answer to Question 225) Ukraine makes reference to the "Provision onprocedure for organizing and holding international tender-bids in Ukraine" and in answer to
Question No. 227 makes reference to a "copy of  the latest version of the law on government
procurement."
Reply:
The Cabinet of Ministers Resolution No. 694, dated 28 June 1997, as amended by the Cabinet
of Ministers Resolution No. 1058, must be treated as a single document regulating the purchase of
goods and services with budgetary funds, regardless of the origin of the goods/services in questions.
In effect a singles standard applies to purchase of domestic and imported goods/services in this area.
Simultaneously we notify you of the Cabinet of Ministers Resolution No. 2087 (dated
28 December 1998) "On Amendments to Certain CMU Resolutions Governing State Purchases ofGoods and Services, and on the Specificity of Construction Tenders." This resolution does not
contradict the above-mentioned resolutions.
The ministerial normative act on purchase of medicines and medical equipment, developed by
the Ministry of Health, has been brought into accord with the resolutions.
Question 72.
Is a draft procurement law being developed? If s o, is Resolution No.  694 indicative of the
procedures that will be set forth in such a law?
Reply:
The newest draft Law of Ukraine "On Procurement of Goods, Works and Services for State
Needs"  was adopted by the Supreme Rada of Ukraine on 30 June 1999, in first reading.
Just as Resolution No. 694, the above law is based on the Model Law on Purchases (of
Works), Services (UNCITRAL) itself compos ed primarily of six methods of purchase.
The World Bank and TACIS experts have positively appraised the draft law. The experts'
comments concern several norms not in complete agreement with the Agreement on State Purchases
of GATT/WTO and normative acts of the European Union.
Question 73.
What is the relationship between Resolu tion No.  694 and Resolution No.  266 of
29 February 1996, which also sets forth some guidelines for use by state entities whenconducting procurements? Is Resolution No.  266 still in effect?
Reply:
The Cabinet of Ministers Resolution No.  266, dated 29 February 1996, is the normative act
implementing the requirement of the Law of Ukrain e "On the Delivery of Goods for State Needs,"
adopted by the Supreme Rada of Ukraine.  Resolution No.  266 sets the ground rules for state
purchasers and the Ministry of the Economy, Minist ry of Finance, and the State statistics Committee,
in forming and placing state orders, and ensuring their proper fulfilment.WT/ACC/UKR/59/Add.2
Page 36
Such orders account for 2-5 per cent of expenditures from the State Budget.
The Cabinet of Ministers Resolution No.  694, dated 28 June 1997, sets out the procedure for
conducting tenders as part of state purchases. Included here are purchases of goods, works andservices within the bounds of state orders.
Thus the said procedure applies to all purchases that are paid for with budgetary funds, this
being equal to 8-10 per cent of GDP.
We would also like to inform you of the possibility that Resolution No.  266 may be cancelled
or modified after the adoption by the Supreme Rada of the draft Law of Ukraine "On Procurement ofGoods, Works and Services for State Needs."
Additional questions regarding Resolution N o.  694 and the answers provided by Ukraine in
WT/ACC/UKR/50:
Question 74.
In response to Question 80 in WT/ACC/UKR/50, Ukraine states that it is aware that Resolution
No.  694 fails to stress the use of performance over design criteria as called for in the
Government Procurement Agreement, However. Uk raine gives no indication it plans to rectify
this shortcoming.
How does Ukraine plan to address the technical specification issue? Will it modify- Resolution
No.  694? If a new draft procurement law is being considered, does it require that performance
criteria be stressed over design criteria?
Reply:
In Paragraph No. 30 (sub-paragraph 4) of Resolution No. 694, dated 28 June 1997, it states
that tender documents for suppliers must include technical and quality characteristics of the good,
works or service to be provided, including appropri ate technical specifications, plans, drawings, drafts
etc.
 The said characteristics are based on technical instructions in line with the Ukrainian system
of standardization.
It is not always possible to rely on international standards, although this is permitted in
Paragraph 26 of Article VI of the GPA.
Therefore it is inaccurate to label Resolution No. 694 as incomplete. In addition to this, the
draft law foresees a separate article on "Qualification Requirements for Suppliers (Implementers)",
which includes the following demands:
Question 75.
Also in response to Question 80, with respect to  offsets, Ukraine states that the contracting
authority can use any of the criteria listed in ''Ar ticle 29 (4)" of Resolution No.  694 in the bid
evaluation and selection process. Article 29 of the version of Resolution No.  694 available to us
deals with requirements for supplying potential suppliers with tender documents, Our question
with regard to offsets, however, referred to Article 41 of Resolution 694, which allows tender
organizers to use criteria such as "volume of local resources use", "internal investment", andWT/ACC/UKR/59/Add.2
Page 37
"transfer of technology" as criteria for selectin g the winner of a tender. As noted in Question
80, such criteria may be considered prohibited offsets under Article XVI of the Government
Procurement Agreement.
Reply:
Resolution No. 694 does indeed permit the specified criteria as a way of supporting domestic
suppliers. At the same time, the new draft Law of Ukraine "On Procurement of Goods, Works and
Services for State Needs" (adopted by the Supreme Rada on 30 June 1999 in first reading) has
excluded the provision specifying that "certain goods, works and services [for state orders] be
provided by domestic providers only." In addition to this, the draft law does not set any mandatory
criteria for selecting suppliers, rather this is left at the discretion of those placing an order.
Question 76.
How does Ukraine plan to address the offsets issu e? Will it modify Resolution No.  694? If a new
draft procurement law is being considered, does it  make clear that such criteria may be used
only in limited circumstances to determine qualifications to participate in the procurement
process?
Reply:
See reply to Question 75.
Question 77.
We remain very concerned will the 15 per cent price preference for Ukrainian suppliers
permitted under Article 41 of Resolution No.  694, Ukraine's answer to Question 80 in
WT/ACC/UKR/50 states that procuring entities will be required to make clear in the tender
documents whether a price preference is included, and notes that all bidders will be provided
with relevant tender documents.
Notwithstanding that assurance, the price prefer ence contemplated appeals to violate the MFN
provisions of the Government Procurement Agreement and other WTO obligations. How wouldthis provision be addressed in the context of Ukraine's accession to the GPA?
Reply:
Notwithstanding the existence of the said st andard in Resolution No. 694, since 1997 there
have been no cases of price preferences being utilized to the benefit of local suppliers, in the first case
due to insufficient financing to cover the difference in price.
The new draft law (see the previous answer) reta ins the possibility of utilizing the 10 per cent
price preference, whoever only on condition that the expected value of the purchase shall be nogreater than the equivalent of:
- for goods - 200,000 Euro
- for services - 300,000 Euro
- for works - 4,000,000 Euro
Such subsidies are permitted by legislation governing state purchases in force in many
countries, including WTO member states.WT/ACC/UKR/59/Add.2
Page 38
Question 78.
The Government Procurement Agreement requires that a procurement review body "which is
not a court shall either be subject to judicial review" or ensure that anyone challenging a bid
has specific rights which are set forth in the Government Procurement Agreement.
Resolution No.  694 appears to allow tender organizers or the Ministry of Foreign Economic
Relations and Trade to hear complaints. Are the decisions of these bodies subject to judicial
review?
Reply:
In accordance with Article 71 of Cabinet of Ministers Resolution No. 694, dated 28 June
1999, the decision of the MFEAT or the entity placing an order, regarding a supplier's
(subcontractor's) complaint, is final, unless the entity placing an order or the supplier (subcontractor)
file a complaint in court or arbitration court.
Article 72 of the Resolution gives suppliers (subcontractors) who have made a complaint to
go to court (or arbitration court), if the MFEAT or the entity that ordered the tender to not resolve the
complaint within 15 calendar days of its submission.
Question 79.
The answer to Question 80 states that any suppli er may appeal the decision of the contracting
authority. Who hears the appeal?
Reply:
A court or arbitration court in accordance with legislation in force considers appeals.
Question 80.
Could Ukraine supply a list of the procuring entities operating at the central, subcentral, and
state enterprise level subject to Ukraine's government procurement rules and regulations?
Reply:
We are not quite certain what is meant by "preparatory enterprises." If one has in mind state
purchasers who are regulated by the law governin g state purchases, then the following would be
included: ministries, other central and local executive bodies, the Council of Ministers of the
Autonomous Republic of Crimea, enterprises and institutions of all forms of ownership, as well as
other subjects that purchase goods, works and services with budgetary resources or foreign credits
issued under Cabinet of Ministers guarantees.
At the same time any subject of enterprise of any state affiliation, that has confirmed its intent
to take part in a tender or issue a tender, can be considered a supplier.
There are no lists extant in Ukraine of enterprises subject to the standards and rules of state
purchases.
All enterprises that purchase goods, works or services with budgetary funds or foreign credits
guaranteed by the Cabinet of Ministers of Ukraine are subject to the rules governing state orders.WT/ACC/UKR/59/Add.2
Page 39
4. Policies affecting foreign trade in agricultural products:
Concerning the Law on State Regulation of Agricultural Imports:Question 81.WT/ACC/UKR/50, Question 96: In its reply to Question 96. Ukraine explains that seasonal
tariffs will not exceed the maximum 50 per cent ta riff contained in Ukraine's offer on market
access in goods.
We would prefer that Ukraine include these seasonal  rates in its schedule, so that the rates are
transparent and predictable.
Reply:
In accordance with Part 1, Article 2 of the Law of Ukraine "On State Regulation of Import of
Agricultural Produce" as amended on 16 January 1998 No. 32/98-VR, seasonal import duties at ratesdouble those of preferred import duties are applied to those goods that fall under the following Codes
of the Commodity Nomenclature of Foreign Economic Activity: 07.01 - 07.08, 08.06.10, 08.07.10,
08.08.10, 08.08.20, 08.09.10.000, 08.09.20, 10.01 - 10.05, 10.08, 12.06 - 12.08, 12.10, 12.12.91,
12.12.92, 12.13, 12.14 .
In accordance with Part 5, Article 2 of the Law, the above-denoted agricultural goods are
subject to seasonal import duty at preferred rates, if the preferred rate is equal to or greater than 30 per
cent in accordance with Article 6 of this Law.
The government is doing everything in its power to make the process of tariff regulation
maximally transparent and predictable. The Cabinet of Ministers Resolution No. 1213, dated
3 August 1998, "On the Procedure of Changing Customs Duty Rates" has instituted a new procedure
for making changes in import duties. In 1999 changes may be made not more often than once every
six months, while in 2000 - no more than once a year.
Question 82.
WT/ACC/UKR/50, Question 97; Ukraine's response to Q. 97 concerning the use of import
quotas is unclear.
Please provide a complete, concise explanation of  the Law on State Regulation of Agricultural
Imports, including amendments made to this Law on 17 February 1998. Does Ukraine intend toimplement the import quotas that are mandated in Article 3 of this Law?
We seek a commitment from Ukraine that it will not introduce import quotas for any products
and will amend the Law on State Regulation of Agricultural Imports to reflect this commitment.
Reply:
In accordance with the Law of Ukraine No. 468/97, the Cabinet of Ministers sets annual
quotas (quantity limits) on the import of goods that fall under the first and second groups in the
Commodity Nomenclature of Foreign Economic Activity (codes: 01.02, except for 01.02.10.000;01.03, except 01.03.10.000; 01.05, except 01.05.10.000; 01.06; 02.01; 02.02; 02.03; 02.04; 02.05;
02.06; 02.07, except 02.07.39.130, 02.07.39.230, 02.07.41.510, 02.08, 02.09.00, 02.10.WT/ACC/UKR/59/Add.2
Page 40
Since the law's enactment, import quotas have not been levied. Therefore, de-facto, importers'
interests have not been violated.
Question 83.
We have heard reports that the Cabinet of Ministers is considering an import quota on poultry
meat.
Will import quotas be introduced on poultry meat, and if so, when? Please provide a concise
outline of the provisions contained in the am endments to the Law on State Regulation of
Agricultural Imports from 17 February 1998. Are further amendments to this Law envisioned?
Reply:
In accordance with the Law of Ukraine No.  468/97, the Cabinet of Ministers sets annual
quotas (quantity limits) on the import of goods that fall under the first and second groups in the
Commodity Nomenclature of Foreign Economic Activity (codes: 01.02, except for 01.02.10.000;
01.03, except 01.03.10.000; 01.05, except 01.05.10.000; 01.06; 02.01; 02.02; 02.03; 02.04; 02.05;02.06; 02.07, except 02.07.39.130, 02.07.39.230, 02.07.41.510, 02.08, 02.09.00, 02.10.
Since the law's enactment, import quotas have not been levied. Therefore, de-facto, importers'
interests have not been violated.
There are no quotas to be levied on poultry. This issue is not under discussion.
The Law of Ukraine No.  32/98 -VR, dated 16 January 1998 "On Amendments to the Law of
"On State Regulation of Agricultural Imports"" amends:
1. Article 1 "Tariff Regulation of Import of Agricultural Products":
- Full import duty rates for goods in groups one and two of the Commodity Nomenclature of
Foreign Economic Activity (except for those subject to excise) will be set at double the
preferred rate of import duty;
- Full import duty rates for goods in groups three and four of Commodity Nomenclature of
Foreign Economic Activity as well as goods to which luxury tax applies, will be set at the
preferred rate of import duty.
2. Article 2 "Seasonal Import Duties"
- Seasonal import duties are set annually at a rate double the preferred import duty rate and
apply to goods, that fall under the following codes of the Commodity Nomenclature of
Foreign Economic Activity: 07.01 -07.08, 08.06.10, 08.07.10, 08.08.10, 08.08.20,
08.09.10000, 08.09.20, 10.01 - 10.05, 10.08, 12.06 - 12.08, 12.10, 12.12.91, 12.12.92, 12.13,
12.14 ;
- In accordance with Part 5, Article 2 of the Law, the above-noted agricultural production is
subject to seasonal import duty at a rate equivalent to the preferred rate, if the preferred rate is
equal to or greater than 30 per cent in accordance with Article 6 of this Law.
The following Laws of Ukraine have amended Law of Ukraine No. 468/On State Regulation
of Import of Agricultural Produce”:
No.  644/97 -VR (19 November 1997);WT/ACC/UKR/59/Add.2
Page 41
No.  794 -VR (30 December 1997);
No.  32 - VR (16 January 1998);
No.  198/98 -VR (5 March 1998);
No.  439-XIV (18 February 1999);
No.  518-XIV (18 March 1999);No.  597-XIV (9 April 1999).
Other Legislation
Question 84.Please provide an explanation of how the VAT on livestock and dairy products sold to
processors is administered. We have seen a copy of the Cabinet of Ministers' resolution from
16 February 1998 No. 145 on establishing the procedure for calculating and paying subsidies to
agricultural producers who sell milk and meat in live weight to processors.
Reply:
The Law of Ukraine No. 770 (n. 11.21), dated 29 December 1997, sets forth that VAT paid
into the budget by processing enterprises from the sale of milk and dairy products, meat and meat
products is refunded to the agricultural producer for the raw material sold by the processing
enterprise: milk and meat by live weight. At the same time these agricultural producers are partiallyfreed from paying VAT on the sale of raw material to processors, by having VAT levied at the 0 per
cent rate. (CMU Resolution No. 145, dated 26 February 1998).
The Cabinet of Ministers Resolution No. 1096, dated 15 July 1998 "On Amendments to the
CMU Resolution No. 145, dated 16 February 1998" introduced substantive changes to parts 4, 5, 6, 9and 16  of "The Order of Calculation and Payment of Subsidies to Agricultural Producers for Milk
and Meat Sold by Live Weight to Processing Enterprises confirmed by the Cabinet of Ministers. In
particular, it was stipulated that agricultural enterprises with full, closed processing cycles of grown
cattle, poultry and milk, are to transfer VAT, that should otherwise be paid into the budget according
to their sale of milk, dairy products and meat, into the development of their own cattle-breeding and
poultry business.
Question 85.
Please provide a concise summary of the provisions contained in Presidential Decree "On the
main directions of development of the agro-industrial complex in Ukraine," from 5 May 1998
(29 April 1998, No. 389/98). We would also like an English translation of this decree.
Reply:
Presidential Decree No. 398, dated 24 April 1998 laid down the basic guidelines for the
development of the Ukrainian agro-industrial complex. This decree set down priorities in thedevelopment of horticulture, cattle breeding, and food-processing. A separate section is set aside for
private sector development. Taking into account that 87 per cent of Ukraine's agro-industrial sector is
loss-making, the following priorities were set:
- restructuring of agro-industrial enterprises' debts before the state, their sanation, and the
creation of a special crediting fund (section 9, n.4);
- the introduction of mortgage crediting and the development of a legislative and normative
base for a State Joint Stock Village Mortgage Bank (Seliansky Bank) (section 3, n. 4);WT/ACC/UKR/59/Add.2
Page 42
- creation of a state support fund for prices and incomes in the agro-industrial complex,
strengthening of anti-monopoly control of prices for material-technical resources, energy (fuel),
provided to agricultural producers, strengthening of  price controls for services provided by natural
monopolies (section 4, n. 2, 3, 4);
- formation of a market infrastructure for agriculture, including adoption of an infrastructure
development program for 1998-2000. Formation of wholesale markets, trading houses (commodities
exchanges), entry into the CIS agricultural market and international manufacturing and trade
organizations (section 8, n. 1, 6);
. simplification of the tax system and lessening of the tax burden. A fixed tax was implemented
on 1 January 1999. The value of this tax (or the amount) is calculated depending on the location andother characteristics of the land in question (a standard unit of measurement), with additional
privileges for food processing enterprises. (Section 7, p.3).
In accordance with n. 4 of section 9 of the Presidential Decree, the Cabinet of Ministers
adopted Resolution No. 922, dated 16 June 1998 "On Details Concerning the Sanation of Agro-industrial Enterprises," which sets the 1998-2000 period as one of restructuring for the sector.
Interagency and regional commissions have been established to facilitate this reconstruction.
Question 86.
Please explain how Hie Presidential Decree No.  444/98 of 8 May 1998 "On the procedure of
import of various types of vegetable oils to Ukraine in 1998" will be implemented. How will
licenses or quotas be allocated to importers for these products?
Reply:
The Presidential Decree No. 444, dated 8 May 1998, “On the Procedure of Importing into
Ukraine Certain Types of Oil in 1998” set a 0 per cent customs duty for unrefined sunflower oil and
unrefined soybean oil, which were imported within a certain quota. In order to import the named
goods into Ukraine it was necessary to:
1. Obtain MFEAT permission;
2. Hold a license from MFEAT.
We must note that the Decree at issue was a temporary instrument and as of
1 September 1999, it will be null and void.
Question 87
Please provide information concerning Presidential Decree No.  443/98 of 8 May 1998 "On
measures for regulation of marketing of ethyl spirits and alcoholic beverages."
Reply:
Presidential Decree No. 443/98 of 8 May 1998 " On Measures Regulating the Sale of Ethyl
Alcohol and Alcoholic Beverages " was introduced in order to regulate levying of excise duty on ethyl
spirits sold for the purposes of producing goods subject to excise duties. The decree’s provisionsprovide for the following:WT/ACC/UKR/59/Add.2
Page 43
1. Producing enterprises shall ship ethyl spirits and alcoholic beverages for export only under
the condition that these goods will be protected and convoyed by customs service authorities,
or under the condition of paid cash collateral;
2. Producing enterprises shall sell ethyl spirits and alcoholic beverages to subjects of
entrepreneurial activities [trades and businesses] of all forms of property ownership for their
own consumption, commercial processing, manufacturing of goods subject to excise duties
under the condition that the excise duty is paid;
3. If domestic manufacturers use ethyl spirits for the purpose of producing medicines, pectin,
essences [extractions] and vinegar obtained from food, veterinary substances, and silicon and
organic compounds, and if they paid excise duty while purchasing ethyl spirits, they shall bereimbursed the amount of paid excise duty within one year after the date this amount was
transferred to the budget.
Question 88
Presidential Decree No.  87/98 of 5 February 1998 established the regulations for the Committee
on Food Industry, which has been tasked as th e central organ under the Ministry of Agro-
Industrial Complex to directly implement government policy in the areas of food and processing
industries and measures to guarantee food safety.
What role is envisioned for the recently created Committee on Food Industry
(Ukrpishcheprom)? How does this new Committee fit into the existing governmental structure?
Reply:
In compliance with the “Regulations on the Committee on Food Industry of Ukraine”
approved by Presidential Decree No. 87/98 of 5 February 1998, UkrKharchProm [Ukrpischcheprom
in Russian] is tasked with the functions of an Ag ency which has to directly insure implementation of
the government policy in the areas of food and processing industries, and control the process of
implementation of respective legislative acts pertaining the issues of agro-industrial complex. The
above mentioned functions of UkrKharchProm are carried out through Committee’s participation in
the process of drafting proposals on the main avenues of agrarian and industrial policy, conductinginnovation activities, developing and designing measures aimed at activization of foreign economic
activities, establishing equal conditions for development of all types of property ownership
andbusiness management, and others.
The Committee on Food Industry within the current framework of government structure will
play the role of an agency charged with coordinating the development of food and processing industry
within the scope of its authority.
Question 89
As we understand it, until 1 September, a 0 per cent tariff will be applied to specific quantities
of various types of unrefined vegetable oil. In  addition, there is a 30-day deferral on the
payment of VAT. The Cabinet of Ministers was given 10 days to establish a procedure and a
maximum customs value for these imports, as we ll as a mechanism to control their end-use. We
also understand that a minimum ("indicative") import price will be imposed for productsentering Ukraine under this regime.
Please confirm if this information is correct, and we note that the use of artificial import prices
for customs valuation is WTO-inconsistent.WT/ACC/UKR/59/Add.2
Page 44
Reply:
Presidential Decree of 8 May 1998, No.  444 “On the Procedure of Importing into Ukraine
Certain Types of Oil in 1998” stipulated that by 1 September 1998, a zero rate of customs duty onunrefined sunflower oil and unrefined soybean oil imported to Ukraine within the set quota shall be
introduced.
The decree was introduce in order to satisfy country’s domestic needs in vegetable oil, and
insure in-flow of additional revenue to the budget through increase of its supplies for further
processing and use at the food industry enterprises.
It is important to note, however, that the mentioned Presidential Decree was introduced on the
temporary basis, and it is no longer valid as of 1 September 1999.
In compliance with the Ukraine’s legislation indicative prices for goods imported to Ukraine
are not introduced.
Question 90.
Our understanding of the resolution is that domestic producers are exempt from paying the
VAT on milk and meat in live weight that is sold to processors.
This measure may violate GATT Article III if imported products are not treated equally.
Reply:
As for paying VAT on sold raw materials to processors, manufacturers of agricultural goods
are exempt through application of zero rate. (Cab inet of Ministers Resolution No.  145 of February
26, 1998).
The Cabinet of Ministers Resolution No.  109 6 of 15 July 1999, “On Introducing Changes
and Amendments to Cabinet of Ministers Resolution No.  145 of 26 February 1998” introduced
substantive changes to paragraphs 4, 5, 6, 9, and 16 of the “Procedures on Accruing and PayingSubsidies to Manufacturers of Agricultural Goods for Milk and Meat in Live Weight Sold by Them to
Processing Enterprises” approved by the Cabinet of Ministers Resolution. In particular, it was
stipulated that agricultural enterprises which carry out on their own production facilities processing of
grown live stock, paltry and milk shall transfer VAT [payments] subject to be paid to the budget for
selling milk products, meat and milk goods for the purposes of development of their live stock raisingand paltry raising capacities.
Question 91
The Cabinet of Ministers Resolution of 28 May 1998, No. 754 introduced seasonal tariffs for a
number of agricultural products, to go into effect 45 days after being published in the
newspaper "Uriadovyi Kurier."
Please provide a list of all products (including  specific HS codes) that axe affected by the
resolution, as well as the seasonal rates and the dates of their validity.WT/ACC/UKR/59/Add.2
Page 45
Reply:
TERMS
of application of the seasonal import duties in 1998
HS code Type of the agricultural
productsSeasonal import duty
rate (by percentage of
the customs value and
fixed amounts to the
unit of weight or
quantity)*Term of application ofseasonal import duty
07.01 Potatoes, fresh or chilled 100, but not less than
ECU 0,4 per 1 kg.From 15 August to 15
November
07.02. Tomatoes, fresh or chilled 60, but not less than
ECU 0,6 per 1 kg.From 15 July to 15
September
07.03 Onions, shallots, garlic, leeks
and other alliaceous
vegetables, fresh or chilled 60, but not less than
ECU 0,4 per 1 kg.From 15 July to 12
November
07.04 Cabbages, cauliflower,
kohlrabi, kale and similar
edible brassicas, fresh or
chilled60, but not less than
ECU 0,4 per 1 kg.From 1 August to 28
November
07.05.1107.05.19000Lettuce (Lactuca sativa) 60, but not less than
ECU 0,4 per 1 kg.From 15 August to 15
September
07.06 Carrots, turnips, salad
beetroot, salsify, celeriac,
radishes and similar edibleroots, fresh or chilled60, but not less than
ECU 0,4 per 1 kg.From 15 July to 25
October
07.07 00 Cucumbers and gherkins, fresh
or chilled60, but not less than
ECU 0,6 per 1 kg.From 15 July to 15
September
07.08 Leguminous vegetables,
shelled or unshelled, fresh or
chilled60, but not less than
ECU 0,6 per 1 kg.From 15 July to 15
September
08.06.10 Grapes, fresh 60, but not less than
ECU 0,6 per 1 kg.From 1 August to 28
November
08.07.10 Melons and watermelons 60, but not less than
ECU 0,6 per 1 kg.From 1 August to 1
November
08.08.10 Apples, fresh 60, but not less than
ECU 1 per 1 kg.From 1 August to 28
November
08.08.20 Pears and quinces, fresh 60, but not less than
ECU 1 per 1 kg.>From 1 August to 28
November
08.09.10 000 Apricots, fresh 60, but not less than
ECU 1 per 1 kg.From 15 July to 15
September
10.01(excluding
those for
sowing)Wheat and meslin 60, but not less than
ECU 80 per 1 ton.From 1 September to 1
December
                                                     
* Seasonal import duty rate is twice as high as the preferential import duty rate for agricultural
products, as provided by Articles 2, 6 of the Law of Ukraine "On the State Regulation of Import of Agricultural
Products".WT/ACC/UKR/59/Add.2
Page 46
HS code Type of the agricultural
productsSeasonal import duty
rate (by percentage of
the customs value and
fixed amounts to the
unit of weight orquantity)
*Term of application of
seasonal import duty
10.02 00000 Rye 60, but not less than
ECU 40 per 1 ton.From 1 September to 1
December
10.03.00 Barley 60, but not less than
ECU 40 per 1 ton.From 1 September to 1
December
10.04.00 Oats 60, but not less than
ECU 40 per 1 ton.From 1 September to 1
December
10.05(excluding
those for
sowing)Maize (corn) 60, but not less than
ECU 40 per 1 ton.From 1 September to 1
December
10.08 Buckwheat, canary seed and
other cereals60, but not less than
ECU 0.1 per 1 kg.From 1 September to 1
December
12.06 00 Sunflower seeds 100, but not less than
ECU 1 per 1 kg.From 1 September to 1
December
12.07 Other oil seeds and oleaginous
fruits60, but not less than
ECU 0.6 per 1 kg.From 1 September to 1
December
12.08 Flours and meals of oil seeds
or oleaginous fruits60, but not less than
ECU 0.6 per 1 kg.From 1 September to 1
December
12.10 Hop 100, but not less than
ECU 4 per 1 kg.From 15 August to 1
December
12.12. 91 Sugar beat, fresh, dried or
powdered60, but not less than
ECU 0.3 per 1 kg.From 1 September to
28 November
12.12.92 000 Sugar cane 100, but not less than
ECU 0.2 per 1 kg.From 1 September to
28 November
12.13 Cereal straw and husks 60, but not less than
ECU 0.06 per 1 kg.From 15 July to 10
November
12.14 Fodder 60, but not less than
ECU 0.02 per 1 kg.From 1 September to
28 November
Question 92
Information we have concerning these rates implies that seasonal tariffs will be set at 60 per
cent in addition to a minimum per unit tariff.
This appears to contradict Ukraine's reply to Q. 96 of WT/ACC/UKR/50 (p. 49), which states
that the maximum level of a seasonal rate may not exceed 50 per cent.
Can Ukraine clarify this situation? We are very concerned by the lack of a standstill on tariff
rates, since these rate increases make it diffic ult for us to conduct meaningful market access
negotiations with Ukraine.
Reply:
In compliance with Part 1 of Article 2 of the Law of Ukraine “On State Regulation of Import
of Agricultural Produce” with changes and ame ndments of 16 January 1998, No.  32/98-BP seasonalWT/ACC/UKR/59/Add.2
Page 47
[tariffs] of customs duty are approved on the annual basis in the amount which is twice the amount of
preferential rates of import duty applied to goods subject to the following codes of the Commodities
Nomenclature of Foreign Economic Activities: 07.01-07.08, 08.06.10, 08.08.10, 08.08.20,
08.09.10000, 08.09.20, 10.01-10.05, 10.08, 12.06-12.08, 12.10, 12.12.91, 12.12.92, 12.13, 12.14.
Meanwhile, in compliance with Part 5 of Article 2 of the Law the above mentioned
agricultural products shall be taxed with the seasonal import duty at the preferential rate if the
preferential rate equals or exceeds 30 per cent in accordance with Article 6 of this Law.
Thus, maximum level of seasonal tariff does not exceed 50 per cent.
However, taking into account the difficult situation of Ukraine’s agriculture in 1998 the
Cabinet of Ministers Resolution of 28 May 1998, No.  754 was approved which provides for seasonalduty to be levied in a double amount to the amount of preferential rates of import duty.
Question 93
The Cabinet of Ministers Order of 19 May 1998 established import quotas on cognac spirits for
1998-99.
Please provide details on this Order. We are al so interested in details concerning the provisions
of the Cabinet of Ministers Resolution of 24 February 1998 (25 February 1998, No. 208) that
established import quotas for wine inputs (vinomaterialy) used to produce champagne andcognac.
Reply:
The Cabinet of Ministers Order of 19 May 1998, No.  340 established import quotas on
purchases of cognac spirits for certain enterprises. The quotas are established for the period of 1998
and 1999 for 10 manufacturers of wine and cognac products at the level of $30 to $500,000. The total
amount of quota on import of cognac spirits for these enterprises equals $1,550,000.
The Cabinet of Ministers Resolution of 24 February 1998, No.  208 established volumes of
import for certain champagne and cognac wine inputs (vinomaterialy) for 1998 and 1999. Only wine
inputs under 22.04.30 code (other wine must) are subject  to quota; the quota is established at the level
of $18,600,000.
Question 94
Quantitative import restrictions are not consistent with WTO provisions. How does Ukraine
intend to address this?
Reply:
Ukraine considers establishment of quantitative restrictions as a temporary measure, taking
into account the difficult economic situation.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
Question 95Please provide an update on progress made since May 1997 to move Ukraine towards TRIPS
compliance in the areas identified, e.g., what new proposals, laws; and other measures to enact,WT/ACC/UKR/59/Add.2
Page 48
implement, and enforce TRIPS-quality protection of intellectual property rights in Ukraine
have been developed or enacted since that time?
Reply:
Memorandum on the issues of intellectual property was sent to the WTO Secretariat, where
we reviewed the mentioned information.
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
1. Bilateral or plurilateral agreements relating to foreign trade in goods and trade in
services
Question 96We seek Ukraine's commitment in its accession  documentation that it will accede to the
Agreement on Trade in Civil Aircraft at the time of its accession to the WTO, and will bind its
customs tariffs on aircraft and aircraft parts at "zero" in its WTO Schedule of Commitments
for Goods.
Reply:
Under the proposal of the Ministry of Policy (MinPolityky) the gradual transition to zero level
is taking place in Ukraine, in particular [phasing-out is as follows]:
Until 2006 - according to Customs Tariff Transformation Concept;
In 2006 - 10%;
From 2007 to 2009 - 5%;
2010 - 0%.
__________