RESTRICTED
WORLD TRADE WT/ACC/UKR/25/Add.1
2April 1997
ORGANIZATION(97-1314)
Original: English
ACCESSION OFUKRAINE
Additional Questions andReplies
Addendum
TheGovernmental Commission onUkraine 'sAccession totheWTO hasprovided thereplies
reproducedhereundertothequestionssubmittedbydelegationsconcerningdocumentWT/ACC/UKR/25
andWT/ACC/UKR/26.
_______________
TABLE OFCONTENTS
Section Question Page
II.ECONOMY AND FOREIGN TRADE
Pricing Policy 1 3
Privatization 2-4 4
State Support 5-6 5
International Accounts System 7 6
Competition Policy 8-9 6
III.FOREIGN TRADE REGIME
1.Import Regulation
Recent Legislative Developments 10-21 9
Tariff Exemptions andPreferences 22-23 13
Customs Tariff 24-26 14
Barter Trade 27 17
Anti-Dumping andSafeguard Measures 28-32 17
Non-Tariff Measures, Quotas andLicensing 33-36 18
Standards andCertification 37-47 21
Sanitary andPhytosanitary Measures 48-51 24
2.Export Regulation 52-53 26
Export Incentive Measures, including Subsidies 54 27
IV.OTHER POLICIES RELATED TOFOREIGN
TRADE
2.Agricultural Policies
Pricing Policy 55-59 29
Privatization 60-62 30WT/ACC/UKR/25/Add.1
Page2
Section Question Page
Future Reforms intheAgriculture Sector 63-67 31
Non-tariff Measures, Quotas andLicensing 68-70 33
Sanitary andPhytosanitary Measures inAgriculture 71 34
Export Restrictions inAgriculture 72 34
Export Stimulation Measures, including Subsidies 73-75 35
State Trading inAgriculture 76 36
Barter Trade inAgriculture 77-79 36
Statistics inAgriculture 80 37
5.Investment Policies 81-84 38
6.Government Procurement 85-87 46
9.TRIPS
General 88-89 47
Copyright andRelated Rights 90 47
Patents 91 48
Enforcement 92-101 48
V.TRADE AGREEMENTS
1.Bilateral Preferential Agreements 102 53
2.Regional Integration 103 53
WT/ACC/UKR/26
ListofLegislative Acts 104-106 54WT/ACC/UKR/25/Add.1
Page3
II. ECONOMY AND FOREIGN TRADE
Pricing Policy
Question 1
Weunderstand thatattheendof1995andinearly 1996, theUkrainian authorities tookanumber
ofmeasures tofurther liberalize theexport regime. Please clarify themeasures related tothe
export prices ofgoods. Where there areexceptions tothisrule,please further clarify thecategories
ofgoods affected byofficial indicative export prices.
Answer:
AccordingtotheRegulationontheMethodsofDeterminationandApplyingofIndicativePrices,
approved bytheOrder No.506 of8August 1996 oftheMinistry ofForeign Economic Relations and
Trade ofUkraine, thedeviation ofcontractual prices fromtheindicative price ispossible andcanbe
caused bythenature ofthecontract, terms ofpayment, deviation ofquality indexes ofcommodities
fromUkrainian standards, andother factors thathavesignificant influence ontheconditions required
tofulfil thecontract.
TheDecree ofthePresident ofUkraine No.124/96 of10February 1996 “OnMeasures
ConcerningtheImprovementofConjunctureandPricingPolicyinForeignEconomicActivity”provides
thattheMinistry ofForeign Economic Relations andTrade maydevelop indicative prices forthe
following goods:
- onexport ofwhich anti-dumping procedures havebeenapplied oranti-dumping investigations
oractions havebeenstarted inUkraine orabroad;
- towhich special import procedures havebeenapplied under Article 19oftheLawofUkraine
"OnForeign Economic Activities";
- export ofwhich requires quoting andlicensing;
- which areexported under thespecial regime;
- which areexported under Article 20oftheLawofUkraine “OnForeign Economic Activity ”;
- inother cases, inorder tomeetUkraine 'sinternational obligations.
Listofindicative prices oncertain products exported from Ukraine
i. Processed castiron
ii. Foundry castiron
iii. Armature indeliveries totheNear East
iv. Square barindeliveries toTurkey
v. Hot-rolled roll
vi. Hot-rolled plate
vii. Ferrosilicon-65
viii. Ferrosilicon manganese
ix. Non-processed zinc
x. Non-processed magnesium
xi. Titanic sponge
xii. Carbamide
xiii. Ammonia
xiv. Livebovine animals
xv. Livesheep andrams
xvi. Rawskins ofbovine animals, salted, non-contoured, ofmachine processing
xvii. Rawskins ofsheep, salted.
Butthelistgrows shorter constantly.WT/ACC/UKR/25/Add.1
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Privatisation
Question 2
Requestion 8(and 131foragriculture). Even though foreign investors aregranted national
treatment, theycan,inveryfewcases, acquire acontrolling stake inacompany because the
privatisation planofacompany asaruleleaves over50%ofshares inthehands ofmanagement,
workers andtheState. Atthisstage ofUkraine 'sdevelopment there isunlikely tobeanysignificant
interest from foreign investors inminority shareholdings. Only afewhundred companies "ofgreat
importance tothecountry" willbespecifically destined for"strategic" foreign investment, i.e.
their privatisation planwillforesee majority stakes forinvestors. Why arenotallcompanies
effectively opened toforeign investment? How is"great importance tothecountry" determined,
particularly since thelistofover6000 enterprises notsubject toprivatisation isalsomotivated
ongrounds of"national importance" (see Reply no.10 WT/ACC/UKR/25 and no.135
WT/ACC/UKR/25 foragriculture)?
Answer:
Itisnecessary tounderline thenonconformity ofsome terminology thatmayhavebeenaresult
ofaninadequate translation. "National importance" means special importance foreconomy andnational
security. TheCabinet ofMinisters ofUkraine approved aListofEnterprises Subject toPrivatisation
According totheIndividual Plans byitsResolution No.684of27June1996. Thislistcomprised
thestate-owned objects thathadaspecial importance foreconomy andnational security. TheCabinet
ofMinisters ofUkraine hasanexclusive authority interms ofdetermining thecriteria ofsuch"special
importance" andalsoinselecting enterprises under these criteria.
Thelistsofobjects which, duetotheirnational importance, arenotsubject toprivatisation
shallbereviewed andapproved bytheSupreme Rada ofUkraine upon submission oftheCabinet of
Ministers ofUkraine.
Ourprivatizationlegislation(Article8,Paragraph1oftheLaw"OnPrivatizationoftheProperty
ofStateEnterprises") provides fortheparticipation offoreign citizens andlegalentities ofothercountries
intheprivatizationprocesswithoutanyrestrictionsforforeigninvestors.Thepossibilitiesofparticipation
arefurther widened bytheResolutions oftheCabinet ofMinisters No.687 andNo.689 of27June
1996onapproval oftheProvision ontheprocedure forsalesofstock ofpublic companies limited by
sharesatnon-commercialtendersofinvestmentcommitments,andoftheanalogousProvisiononproperty
ofenterprises which areofgreat importance fortheeconomy andstatesecurity.
Thefollowingshouldalsobetakenintoconsideration.Theconditionoffixedassetsinagriculture
andtheirtechnological levelshow, thatthebranch needs significant investments. Forthisreason, the
legislationgivesbusinessestherighttoissueadditionalsharesthatcanbeusedtoreceivefunds,including
foreign investments.
Theagricultural sector hasanumber ofunfinished construction projects; (theMinistry of
Agriculture andFood ofUkraine hasabout 700ofthem). They canbebought without anyrestrictions,
including byforeign investors.
Astothe6000 enterprises notsubject toprivatization, onlyaninsignificant number ofthem
belong totheagricultural sector; (theMinistry ofAgriculture owns about 900). Proposals submitted
totheSupreme Rada suggest toexclude bread bakeries fromthisnumber, which areabout 500. The
following agricultural enterprises willtemporarily remain state-owned: educational institutions (higher
education establishments andvocational schools), scientific establishments, silk-producing enterprises,
veterinary andsanitary institutions, andanimal medicine enterprises.WT/ACC/UKR/25/Add.1
Page5
Question 3
ReQuestion 8.ThefirststepinthePresident 'sstrategy toimprove theenvironment forforeign
investment isdescribed astheexisting mechanism fortheparticipation offoreign investors in
privatisation. CanUkraine elaborate onhowthiswillbedone?
Answer:
Forimplementation ofdecisions oftheSupreme Rada ofUkraine (Resolution No.542
22November 1996) asimplification ofthemechanism forforeign investors participation inprivatisation
shallbeprovided based onthedevelopment andadoption ofUkraine 'slegislation onstrategic investors
andinvestment obligations.
Question 4
Weunderstand thattheUkrainian authorities have taken anumber ofmeasures toaccelerate
theauctions ofstateenterprises withtheaimofhaving privatized atleast70%ofshares inatotal
of5,000 medium andlarge enterprises bytheend-1996. Inthiscontext, cantheUkrainian
delegation please clarify whether foreign companies canparticipate insuchauctions andwhether
there isaminimum price setforthese sales.
Answer:
According tothelegislation onprivatisation, foreign legalandnatural persons mayequally,
withdomestic persons, takepartinprivatisation ofthestate-owned objects, except thecases providing
fortheapplication ofprivatisation papers (voucher privatisation). Depending onthegroup, towhich
aspecific object belongs, (classification isbased onthevalue ofcapital assets andother criteria),
privatisation may beconducted onthebasis ofabuy-out, auction, contest ,commercial or
non-commercial.
Theselling price oftheobject, usually anobject ofsmall privatisation, thatissubject toa
buy-out, shallbedetermined byanexpertise, orbythemeans thataccount forpotential profitability
according totheProperty Evaluation Methodology approved bytheCabinet ofMinisters ofUkraine.
Incaseofanauction ortender, theoriginal price oftheobject should beestablished. Saleof
thesmall privatisation objects attheauction shallbeprovided through atransfer oftheownership right
tothepurchaser thatoffers thehighest price during thetender.
Inthecaseofatender, review oftheselling priceoftheobject shallbeestablished bythetender
commission (created foraparticular tender), butthefinalpricecannot belessthan70%oftheoriginal
price.
State Support
Question 5
Does Ukraine apply anysupport measures intheshipbuilding industry?
Answer:
Ukraine doesnotapply suchmeasures ofsupport assubsidies intheshipbuilding industry.
Ukraine applies credit support onlytotheshipbuilding enterprises, which produce science
capacious andcompetitive products. Thesupport isapplied intheformofpermissions forthemortgage
ofproperty ofthese enterprises toensure commitments under thebank credit agreements. TheWT/ACC/UKR/25/Add.1
Page6
shipbuilding enterprises arealsoallowed totransfer money, subject tothecounting offtotheState
Fund forConversion Support andtotheoutofbudget fundforfinancing sectoral science-research
works andmeasures onnewtechnologies studies andmanufacturing ofthenewkinds ofproducts,
tothereplenishment oftheirownmoney turnover.
Question 6
(Question 25).Ukraine states “quotas andimport licensing canbeintroduced ”.Could Ukraine
please explain thisstatement? What ismeant by“quotas? ”Isthisanimport quota oratariff
quota? Ifitisanimport quota wewould consider thisaquantitative restriction andexpect it
toberemoved inaccordance withArticle 4oftheAgreement onAgriculture.
Answer:
Inaccordance withtheResolution oftheCabinet ofMinisters ofUkraine of31December 1996
No.1590 “OntheListofGoods, Import ofwhich isSubject toLicensing in1997”wenotify, that
import quoting isnotforeseen in1997 also.
International Accounts System
Question 7
Since theendof1994, Ukraine hassignificantly liberalized itsexchange system. Notwithstanding
moves towards liberalization, weunderstand thatUkraine continues tomaintain restrictions on
payments forcurrent international transactions withrespect toinvisibles, including payments
fortourist travel, business travel, expenses foreducation andmedical treatment abroad. We
alsounderstand thatresidents areonlypermitted topurchase foreign exchange ofuptoUSD 400
pertripforpurpose oftourist travel abroad. Inthiscontext, please clarify whether theauthorities
intend tocontinue withsuchrestrictions inthenearterm.
Answer:
Thecurrency system ofUkraine hasexperienced considerable changes inthedirection of
liberalization. Theexisting regulatory documents simplified considerably theregime ofcurrency
transportation through thecustoms boarder ofUkraine andtheamounts ofpayment through thecustoms
boarder ofUkraine alsoexperienced liberalization. Thecurrency regime isbeing regulated bytheDecree
oftheBoard ofDirectors oftheNational Bank ofUkraine No245dated 23September 1996.According
tothisDecree itispermitted toopen theaccounts forrepresentations offoreign companies and
internationalorganisationsofanyformwithoutlegalpersonstatus,throughwhichnon-residentofUkraine
fullyorpartially conducts hisentrepreneurial activity ontheterritory ofUkraine.
Competition Policy
Question 8
ReQuestion 33.TheAMC canintervene when companies charge “monopolistically loworhigh”
prices. Aresuchcases determined onlyonthebasis oftheprices, i.e.bycomparing them with
a“competitive price”list?Canacompany thatdoesnotholdamonopoly inthemarket befound
tocharge monopolistic prices?
Answer:
TheUkrainian anti-monopoly legislation defines thenotions ofdiscriminatory prices, monopoly
highprices andmonopoly lowprices (Article 4oftheLawofUkraine “OnLimitation ofMonopoliesWT/ACC/UKR/25/Add.1
Page7
andPrevention ofUnfair Competition inBusiness Activity ”).Italsodetermines business liability for
price fixing which isaviolation ofthislegislation.
Withthepurpose ofcontrolling adherence totheanti-monopoly legislation intheareaofpricing
theMethodological recommendations fordetermination ofmonopoly prices wasapproved bytheOrder
oftheChairmanoftheAnti-monopolyCommitteeNo.6/01of14February1996.Theserecommendations
arebeing approbated nowbytheAnti-monopoly Committee bodies andshallbeimproved andcompleted
onthebasisofobtained experience. Although various indicators ofthemonopoly high, monopoly low,
monopsonichigh,monopsoniclowpricesarespecifiedintheserecommendationsbutthefinalconclusion
astothepresence ofmonopoly ormonopsonic prices shallbemade onthebasis ofprices analysis
byapplication ofthebasic price method (comparison oftheprice anditscomponents withrespective
indices ofthiscompany inthebaseperiod) orthemethod ofanalogue (comparison oftheprice that
isexamined withthepriceoftheanalogous goods which canbeproduced byothercompanies, including
foreign ones).
Abusiness which doesn 'thaveamonopoly position onthemarket, canbedetermined asone
whofixes monopoly prices ifhetakes partinillegal transactions aimed atfixing (maintenance) of
monopoly prices thatisdetermined byparagraph 2article 5oftheLawofUkraine "OnLimitation
ofMonopolies andPrevention ofUnfair Competition inBusiness Activity"). Butinthiscase, itisnot
theprice levelthatissignificant, butafactthattheprice isfixed bycompetitors through restriction
orelimination ofcompetition between them.
Question 9
ReQuestion 33.Thepenalties levied bytheAMC in1995 work outtoanaverage $130 percase.
Aresuchfines theonlytypeofpenalties inanti-monopoly cases?
Answer:
Sanctions fortheviolation oftheanti-monopoly legislation aresetdown insection Vofthe
LawofUkraine “OnLimitation ofMonopolies andPrevention ofUnfair Competition inBusiness
Activity ”.ThisLawspecifies thefollowing sanctions: imposition ofpenalties byAnti-monopoly
committee onbusinessmen-legal entities intheamount upto5%ofthebusinessman ’sannual revenues
fortheyearpreceding theinfringement (Art.19); imposition ofpenalties through ajudicial procedure
fromofficers andcitizens whoundertake business activity without establishing alegalentity andbear
administrative responsibility fortheinfringement ofanti-monopoly legislation (Art.20); withdrawal
ofaprofit, gained illegally, tothestatebudget, through thejudicial procedure (Art.21); compensation
fordamages arising from abuse ofmonopoly andunfair competition through asuitofthepersons
concerned intheorder provided forbycivillegislation ofUkraine (Art.22).
ApplicationofsanctionsintheformofpenaltiesimposedbybodiesofAnti-monopolyCommittee
onthebusinessmen-legal persons fortheviolation ofanti-monopoly legislation hasbecome possible
inconnection withtheLawofUkraine of5July1995“OnIntroduction ofAmendments andAdditions
totheLawofUkraine ”“OnLimitation ofMonopolies andPrevention ofUnfair Competition inBusiness
Activity ”thatcame intoforce. Earlier thepenalties onthebusinessmen wereimposed onlyfordefault
ofthedecisions oftheCommittee andthefailure tosubmit (delayed submission) information. Asthe
decision ofbodies oftheCommittee werepractically executed induetimeandmajority oftheviolations
stopped atastage ofconsideration ofapplications, thepenal sanctions werealmost never applied. But
thentheviolation could repeat again. Besides, duetoinflationary processes thesizesofthepenalties,
established yetin1992, weresmall andtheirapplication didnotpromote prevention andtermination
oftheviolations oftheanti-monopoly legislation.WT/ACC/UKR/25/Add.1
Page8
Forfivemonths of1995, afterthespecified changes intheLawhavecome intoforce, the
sumoftheimposed penalties hasexceeded arespective parameter fortheprevious period ofayear
by329times. Asawhole, in1995 penalties totalling 5609,0 mln.kbv. were imposed onthe
businessmen-legal persons.
Theadoption oftheLawofUkraine of5April 1995 “OnIntroduction ofAmendments and
Additions totheCode ofUkraine onAdministrative Offenses ”bytheParliament ofUkraine hasenabled
theCommittee anditsterritorial branches tomore effectively influence thetermination ofviolations
oftheanti-monopoly legislation onthepartofofficials ofenterprises. Inthiscase,inaccordance with
Paragraph 5,Article 25oftheLaw ofUkraine “OnAnti-monopoly Committee ofUkraine ”
Anti-monopoly Committee ofUkraine andthestateauthorized representatives oftheCommittee send
theprotocols onadministrative violations tothecourt forimposing penalties onofficials inaccordance
withthecurrentlegislation.During1995theCommitteehasmadeandsent35protocolsonadministrative
offenses -violations ofanti-monopoly legislation forconsideration ofcourts. 31persons wereinvolved
intheresponsibility bycourts, andpenalties inasumof201.6 mln.kbv were imposed.
Astoothersanctions, inaccordance withParagraphs 3and4ofArticle 25oftheLawofUkraine
“OnAnti-monopoly Committee ofUkraine ”TheAnti-monopoly Committee ofUkraine andthestate
authorized representatives oftheCommittee submit applications (claims) tothecourt orarbitration
court about thedamage, caused byviolations oftheanti-monopoly legislation, orwithdraw theprofit,
illegally received bythebusiness entities asaresult ofviolation oftheanti-monopoly legislation.
Intotal, for1995business entities paid21449.6 mln.kbv ofillegally received profit totheState
Budget under thecourt'sdecision.
When determining anaverage sumofsanctions attherateofoneconsidered caseabout violation
ofanti-monopoly legislation, itisnecessary toemphasize, thatinthemajority ofcases theviolations
were stopped voluntarily anddidn'trequire imposition ofsignificant sanctions. Inaddition, notall
kinds ofsanctions arespecified forcertain kinds ofviolations under thelegislation. Forexample,
collection ofpenalties intheadministrative order isnotstipulated inrelation tocases about unfair
competition (9percentofcases considered in1995), anddeduction oftheillegally received profit
-incases concerning discrimination ofthebusinessmen bybodies ofauthority andmanagement
(15percent).
Though for10months of1996thenumber ofviolations oftheanti-monopoly legislation, that
havebeen stopped byAnti-monopoly Committee anditsbranches, isapproximately thesame, as
compared withtherespective period oftheprevious year(about 850), parameters oftheimposed
sanctions differ significantly. Forexample, thesumofpenalties, imposed onbusinessmen-legal entities,
thesumofillegally received profit collected uponthecourt decision ,aswellasthetotalsumoffunds
withdrawn totheStateBudget for10months of1996make 2,326.886 UAH (Ukrainian Hryvna), 44,377
and4,098.709 UAH respectively andexceed parameters oftheanalogous period of1995 by41.6;
3.4and14.9times.
Itshould alsobementioned thatapplication ofsanctions isnotanendinitself forthebodies
ofAnti-monopoly Committee andareaimed atthefulfilment ofthetasks regarding thesupport of
protection ofacompetition, prevention ofviolation oftheanti-monopoly legislation. Inthisconnection
itshould beborninmind thatit'snotthenumber ofrevealed andstopped violations thatdetermines
theresult ofwork oftheCommittee, butthedeveloped mechanism ofacompetition, theCommittee
gives greatattention tothepreventive measures. In1995, itallowed theprevention ofatleastthesame
number ofviolations thatwere revealed andstopped. Thistendency alsoproceeds in1996.WT/ACC/UKR/25/Add.1
Page9
III. FOREIGN TRADE REGIME
1. Import Regulation
Recent Legislative Developments
Question 10
Ukraine appears tooperate a“blacklist ”offoreign companies whohave outstanding debts to
Ukrainian companies andwhohavetoappear before alicensing committee before theyareallowed
todobusiness. What isthelegal basis forcreating thislist?
Answer:
Inaccordance withthesecond lineofParagraph 12in“Statute onMinistry ofForeign Economic
Relations ofUkraine ”approved bytheDecree ofthePresident ofUkraine dated 10January 1995,
No.29/95 theMinistry ofForeign Economic Relations andTrade ofUkraine keeps registration of
foreign companies which apply toUkraine limiting business practice orfulfils taken obligations unfairly.
There isaState Program onMutual Settlements between Ukrainian andforeign companies
when carrying outforeign economic operations. Along withthis,theMinistry ofForeign Economic
Relations andTrade isobliged tocoordinate thecooperation between customs, authorized banks and
taxation bodies.
During itswork theMinistry accumulates information onmutual settlements anddebts (debt
receivable, accounts payable) between Ukrainian andforeign banks. These dataaretheonlycriteria
fororganizing above indicated database.thus,wearespeaking notabout “black lists”,butabout control
offoreign economic agents iftheyobserve currency legislation ofUkraine.
Article 37oftheLawofUkraine “OnForeign Economic Activity ”provides application of
theadministrative sanctions onlytotheagents offoreign economic activity ofUkraine forviolating
currency legislation oftheCountry. Thisdecision ismade bythetaxation bodies anditisexecuted
bytheMinistry ofForeign Economic Relations andTrade ofUkraine andtheCustoms. Thefinal
settlement ofdisputes onmutual settlements between theforeign economic agents tothechamber of
Commerce ofUkraine. Thesimilar sanctions areattached totheinthecases when provisions ofthe
LawonAnti-monopoly measures, prohibition oftheunfair competition, prohibition ofdumping are
violated.
Question 11
Istheinclusion ofacompany onthelistbased onacourt injunction orisitanadministrative
decision? Ifitisanadministrative decision, whotakes it?
Answer:
SeeReply toQuestion No.10
Question 12
Please describe theprecise grounds forlisting acompany?
Answer:
SeeReply toQuestion No.10WT/ACC/UKR/25/Add.1
Page10
Question 13
How is“outstanding debts”defined?
Answer:
TheCivilCode ofUkraine (Chapter 18)provides responsibility forinfringement ofobligations.
Inparticular, Article 203determines debtor 'sobligation tocompensate damages. Forexample, adebtor
isobliged tocompensate acreditor fordamages incaseofnon-fulfilment orimproper fulfilment of
obligations bythedebtor.
Damages areunderstood asexpenses made bythecreditor, lossofhisproperty orinjury to
itandalsounreceived creditor 'sincomes which hecould receive ifthedebtor fulfilled hisobligations.
TheChapter regulates suchquestions asforfeit anddamages, reduction offorfeit, dutyofa
debtor, whopaidaforfeit orcompensated damages, fulfilment ofobligations innature, responsibility
fornon-fulfilment ofmoney obligations, etc.
TheCivilCodealsocomprisesaChapter,whichregulatesquestionsofconcessionofrequirement
andtransfer ofadebt.
Question 14
What aretheprocedures, including appeal procedures, procedures andcomposition ofthelicensing
committee, procedures fornotification oflisting andremoval from thelist,etc.?
Answer:
Inaccordancewith"RegulationontheLicensingChamberAffiliatedtotheMinistryofEconomy
ofUkraine" approved bytheResolution oftheCabinet ofMinisters ofUkraine dated 8August 1995,
No.618 theLicensing Chamber controls observance ofrequirements ofnormative actsonlicensing
issues bytheeconomic agents andconducts control overobservance oflicenses issue procedure by
thebodies oftheState executive power. TheLicensing Chamber conducts thisactivity according to
delegated tasks. Inaccordance withArticle 4oftheLawofUkraine “OnPesticides andAgrochemicals ”
pesticides andagrochemicals bothofdomestic andforeign production, imported foruseinUkraine
shallmeettherequirements provided forinthisArticle.
Import ofpesticides andagrochemicals tothecustoms territory ofUkraine, production, sale,
useandadvertising thereof areprohibited before theirstateregistration. According totheprocedure
provided forbytheCabinet ofMinisters ofUkraine Ukrderzhkhimkomisiya gives apermit forimports
anduseofnon-registered pesticides andagrochemicals ifthereareconditions andpurposes established
bythethirdpartofthesame Article.
Documentary confirmation ofpesticides 'useinthecountry oftheirproduction isanobligatory
condition toimport andusepesticides, non-registered inUkraine, forthese purposes.
TheseandothernormsofthisLawareincludedin“ProcedureforIssuingaLicenseforImporting
andUseofNon-registeredPesticidesandAgrochemicals”and“ProcedureforTesting,StateRegistration
andRe-registration, Issuing oftheListsofPesticides andAgrochemicals Allowed forUseinUkraine ”
approved byResolutions oftheCabinet ofMinisters ofUkraine dated 4March 1996No.288 andNo.295
respectively.
Ukraine hasintroduced mandatory ‘registration ’(certification) ofpesticides andagrochemicals,
including fertilizers. Thesecondary legislation which introduced thismandatory registration waspassedWT/ACC/UKR/25/Add.1
Page11
on4March 1996 (Decree oftheCabinet ofMinisters “OntheProcedure forIssuing aLicense for
Importing andUseofNon-registered Pesticides andAgrochemicals ”No.288 of4March 1996 and
“OntheRegime ofTesting, Registration, Re-registration andtheListofPesticides andAgrochemicals
theAllowedforUseinUkraine”No.295of4March1996).Weunderstandthatthissecondarylegislation
willtakeanimmediateorevenretroactiveeffectunderthebasicLaw“OnPesticidesandAgrochemicals”
of2March 1995. Domestic producers canreceive immediate registration bysubmitting GOST
documentation.
Question 15
Given thatthetesting cycle normally takes fiveyears, howcanforeign suppliers comply with
theregistration requirement without being barred from theUkrainian market forseveral years
eveniftheyhave been inthemarket before?
Answer:
Theregistration requirements aresimilar forforeign anddomestic suppliers.
Anecessary condition ofimport anduseofpesticides unregistered inUkraine forthesepurposes
isadocumentary confirmation oftheiruseinthecountry ofproduction.
SeealsoReply toQuestion No.14.
Aneffective banontheimport ofliftsexistasaresult ofthe“Instruction oftheCabinet of
Ministers ”No.358-r of16May1996.
Question 16
What isthepurpose ofthisban?
Answer:
TheInstruction oftheCabinet ofMinisters ofUkraine No.358-r of16May 1996, isof
recommendation character related touseofliftsmainly, (butnotexclusively) ofdomestic production.
Question 17
When willthemeasure belifted?
Answer:
SeeReply toQuestion No.16
Question 18
CanUkraine provide assurances thatsimilar measures willnotbetaken forother sectors?
Answer:
Inaccordance withArticle 1(thethirdpart)oftheUkrainian Law"OnIntroduction ofChanges
andSupplements totheLawofUkraine OnPatenting ofCertain Types ofEnterprise Activity" itdoes
notcover retail trade activity of:
- enterprises andorganizations ofUKOOPSPILKA system, tradeandproduction enterprises of
workers 'supply;WT/ACC/UKR/25/Add.1
Page12
- economic agents -natural persons whopaymarket charge (fee)fortheirplaces totrade by
products within themarket 'sterritory, paytaxtotrade according totheprocedure provided
forbythelegislation andwhosellproducts grown atprivate farms;
- economic agents created bypublic organizations ofinvalids whohavetaxincentives according
tothelegislation andconduct trade exclusively byfoodproducts ofdomestic production.
From 1July1996, a160ECU monthly taxcalled 'patent fee'hasbeenlevied onretail trade.
Thenetwork ofshops oftheUkrainian Consumers Association isexempted from patenting, and
foreign-owned shops arenot.Ukrainian brand shops areexempted, foreign onesnot(e.g.ADIDAS
shop). Reference: Law'onthepatenting ofcertain types ofenterprise activity 'no.98/96-VR of
23March 1996.
Question 19
CanUkraine provide assurances thatitwillreview thediscriminatory aspects ofthistax?
Answer:
TheLaw“OnPatenting Certain Types ofEnterprise Activity ”of3March 1996, No.98/96-SR
determines theorder ofpatenting enterprise activity conducted bytheeconomic agents inthesectors
ofretail trade, tradeinforeign currency andinthesector ofrendering services fortheplaying business.
Thesubject oflegalregulation according tothisLawistheactivity inthesector ofretail trade
ontheterritory ofUkraine, activity onexchange ofcashcurrency valuables (including transactions
withcash, inforeign currency andwithcredit cards), andactivity onrendering services inthesector
ofplaying business.
Thesubjects oflegalrelations regulated bythisLaware:legalpersons andeconomic agents
without astatus oflegalperson -residents andnon-residents, aswellasseparate sub-divisions (affiliates,
divisions,representations,etc.),whichconductbusinessactivitystipulatedbythefirstPartofthisArticle.
Theaction ofthislawdoesnotextend onretail trade activity onlyofthepublic organizations
andunions, suchastheUkrainian Consumers Association, unions created bypublic organizations of
invalids, whohavetaxincentives according tothecurrent legislation andconduct tradeinfoodproducts
exceptionally ofdomestic production.
Retail trade transactions conducted bytheeconomic agents orbytheirstructural (separate)
sub-divisions atthepoint ofretail saleofgoods shallbepatented.
Retail trade inthisLawmeans trade ingoods aswellasexecution ofaccompanying works
(rendering ofservices) forcashandother cashmeans ofpayments, including credit cards.
Points ofretail trade ofgoods inthisLawmeans:
- shops, which occupy separate lodgings orbuildings andhaveatrade hallforcustomers, the
areaofwhich doesnotexceed 20m2;
- kiosks, tentsandother architectural small forms, which occupy separate lodgings, butdonot
haveabuilt-in trade hallforcustomers;
- autoshops, carriers andother types ofmobile trade net;
- hawker 'strays, counters andother types oftrade points inplaces, designed forretail trade,
except those rented bytheeconomic agents -natural persons whoareontheterritory ofthe
market created under thedecision ofthelocalgovernment bodies;
- stationary,ofsmalldimensionsandmobilegasolinefillingstations,fillingpoints,whichconduct
retail trade oilproducts.WT/ACC/UKR/25/Add.1
Page13
Areas ofthestorage rooms, subsidiary andservice rooms arenotcounted while measuring
thewhole areaofthetrade hall.
Incasetheeconomicagenthasstructural(separate)sub-divisions,tradepatentisaddedseparately
foreachstructural (separate) sub-division (trade point).
So,discriminationand“Ukrainianbrandshopsexemptedfrompatenting”areoutofthequestion.
Ukraine continues todistinguish inanumber ofcases between imports bylegalandnatural
persons, granting privileges tonatural persons. Forexample, carsimported bynatural persons donot
require type-approval (certification) andinthecaseofcarsofCISorigin areexempted from VAT.
Question 20
When doesUkraine intend toremove these types ofdiscrimination ?
Answer:
SeeReply toQuestion No.19.
Question 21
CanUkraine confirm thattheSpecial Import Regime hasnowformally been abolished?
Answer:
Yes,weconfirm it.
Tariff Exemptions andPreferences
Question 22
Question 46(Import fees). Thereply refers toquestion no.54.Unfortunately, theresponse to
question no.54doesnotspecifically address thequestion posed inquestion no.46,thatbeing
whether imports delivered under state contracts ororders arealsoexempted from (a)customs
service fees, (b)theVAT tax(c)anyspecial orseasonal duties. Could theGovernment ofthe
Ukraine indicate whether suchimports arealsoexempted from (a)customs service fees,(b)the
VAT tax(c)anyspecial orseasonal duties?
Answer:
Imports under statecontracts andorders issubject totaxation ongeneral terms.
Question 23
Question 48(Customs Processing Fee). TheGovernment oftheUkraine indicates thatacustoms
processing feeof0.15percentisassessed upon theregistration oftheexported andimported
goods. GATT Article VIIIprovides that"allfeesimposed shall belimited totheapproximate
costofservices rendered andshall notrepresent anindirect protection todomestic products."
CantheGovernment oftheUkraine confirm thatthecustoms processing feeof0.15percentfairly
approximates thecostofproviding theservices rendered andifnotwhat steps areplanned to
bring thisfeeintoconformity withArticle VIII?WT/ACC/UKR/25/Add.1
Page14
Answer:
TheState Customs Committee ofUkraine prepared theDraft Resolution oftheCabinet of
Ministers ofUkraine "OnCustoms DutyRates" which wasauthorized bytheHead oftheStateCustoms
Committee ofUkraine andtheMinister ofForeign Economic Relations ofUkraine andsubmitted for
confirmation totheCabinet ofMinisters ofUkraine. Customs dutyratesaregiven inabsolute figures
anddonotexceed thevalue ofservices rendered bythecustoms.
Customs Tariff
Question 24
Could Ukraine provide detailed information ofalltaxes thatarelevied onthepurchase ofvehicles
andallvariations ofthese taxes according to:
- purchaser categories (natural persons andlegalentities ofUkrainian orforeign nationality,
joint ventures, Government authorities);
- theuseofthevehicle;
- theorigin (domestic orimported; ifthelatter, where from?);
- thewayitwasimporter (bynatural persons, bycompanies, byestablished dealers).
Answer:
Imports ofcarsissubject totaxation ongeneral terms andconditions regardless ofthepurchaser
category, theuseofthevehicle, thewayitwasimported. Taxes levied are:customs duty, excise, VAT.
Amount oftaxation isprovided forintheappropriate legislative actsofUkraine.
Wesubmit information concerning import dutyratesforcarsaccording totheGCFEA:
Position of
goodsDescription ofgoods
according totheState
StandardsDuty rates
Preferential Favourable Full
87.03 10100 0.4ECU/cm30.4ECU/cm3
87.03 10900 0.05ECU/cm30.05ECU/cm3
87.03 21100 0.05ECU/cm30.05ECU/cm3
87.03 22110 0.1ECU/cm30.1ECU/cm3
87.03 22190 0.1ECU/cm30.1ECU/cm3
87.03 22900 0.1ECU/cm3
0.4ECU/cm0.1ECU/cm3
87.03 23110
87.03 23190
87.03 21900-withthecubic capacity
oftheengine cylinders
more than1500cm3but
notmore than2200cm3,
newandthose which
hadbeenalready used0.1ECU/cm30.1ECU/cm3
-withthecubic capacity
oftheengine cylinders
more than2200 cm3.
butnotmore than3000
cm3.newandthose
which hadbeenalready
used0.4ECU/cmWT/ACC/UKR/25/Add.1
Page15
Position of
goodsDescription ofgoods
according totheState
StandardsDuty rates
Preferential Favourable Full
87.03 24100 0.8ECU/cm30.8ECU/cm3
87.03 24900 0.8ECU/cm30.8ECU/cm3
87.03 31100 0.1ECU/cm30.1ECU/cm3
87.03 31900 0.1ECU/cm30.1ECU/cm3
87.03 32110 0.15ECU/cm30.15ECU/cm3
87.03 32190 0.15ECU/cm30.15ECU/cm3
87.03 32900 0.15ECU/cm30.15ECU/cm3
87.03 33110 0.8ECU/cm30.8ECU/cm3
87.03 33190 0.8ECU/cm30.8ECU/cm3
87.03 33900 0.8ECU/cm30.8ECU/cm3
87.03 90100 300ECU/cm3300ECU/cm3
87.03 90900 300ECU/cm3300ECU/cm3
AndalsoinformationconcerningexcisedutyratesforcarsaccordingtothecodesoftheGCFEA:
Name ofgoods Code of
the
GCFEAExcise duty
rate
Means oftransportation withpiston engine of
internal-combustion withtheignition from thespark andwith
crank andconnecting-rod mechanism:
withthecubic capacity oftheengine cylinders notmore than
1000 cubic per1cub.cm.,newandthose which hadbeen
already used87.03 21 0.2ECU/cm3
withthecubic capacity oftheengine cylinders more than1000
cubic per1cub.cm.butnotmore than1500 cubic per1cub.
cm.,newandthose which hadbeenalready used87.03 22 0.2ECU/cm3
withthecubic capacity oftheengine cylinders more than1500
cubic per1cub.cm.butnotmore than3000 cubic per1cub.
cm.87.03 23
withthecubic capacity oftheengine cylinders more than1500
cubic per1cub.cm.butnotmore than2200 cubic per1cub.
cm.,newandthose which hadbeenalready used87.03 23 0.3ECU/cm3
withthecubic capacity oftheengine cylinders more than2200
cubic per1cub.cm.butnotmore than3000 cubic per1cub.
cm.,newandthose which hadbeenalready used87.03 23 0.6ECU/cm3
withthecubic capacity oftheengine cylinders more than3000
cubic per1cub.cm.,newandthose which hadbeenalready
used87.03 24 1.0ECU/cm3WT/ACC/UKR/25/Add.1
Page19
Question 29
ReQ.69 and72:CanUkraine please confirm thattheinjury testforimposing safeguard measures
under Ukraine 'sLaws istheonelaiddown intheWTO Safeguards Agreement ("serious injury")?
Question 30
ReQ.3and72:Please confirm thatthecondition ofa"substantial imbalance between domestically
produced goods andtheappropriate imported goods ontheUkrainian market" isnotmeant to
replace themultilaterally agreed requirements fortheadoption oftrade defense measures,
particularly safeguard measures.
Question 31
(Question 69(Anti-dumping andSafeguards). Aspertheprovision (Article 3)intheAgreement
onSafeguards, Ukraine willberequired toimplement asystem which provides foraninvestigation,
andanopportunity forallinterested parties, including exporters, topresent evidence andtheir
views. When willUkraine amend itslegislation tobring itinlinewiththeprovisions ofthe
Agreement?
Answers 29,30,31:
Thelegislation ofUkraine onapplication ofspecial measures willbebrought intocompliance
withtheprovisions ofArticle XIXGATT andAgreement onSafeguards Measures. Thenoted changes
andadditions willbeintroduced intotherelevant legislation actsinthenearest future.
Question 32
(Questions 42and70).Ukraine isdeveloping legislation foritsanti-dumping regime, which it
sayswillbebrought intoconformity withtheAgreements onAnti-dumping andSubsidies and
CountervailingMeasures.WhenwillUkraine'sdraftlegislationbefinalised?CouldUkraineprovide
details ofwhat thelegislation willcover?
Answer:
Thelegislation ofUkraine onissues, connected withtheapplication ofanti-dumping measures
willbebrought intocompliance withtheprinciples anddisciplines ofArticle VIGATT 1994.
Theappropriate legislative andnormative actswillbesubmitted totheWTO Secretariat after
theirapproval attheSupreme Rada ofUkraine.
Non-tariff Measures, Quotas andLicensing
Question 33
Re.question 82,please provide aresponse tothequestion. What werethehealth andsafely concerns
whichledtolicensingrestrictionsoncastironwastesandsteelandplasticproduction?DoesUkraine
anticipate thatthese concerns willdematerialize? CanUkraine confirm thatthere willbeno
licensing restrictions forthese materials inthefuture?
Answer:
There arenolicensing restrictions oncastironwastes, steelandplastic production.WT/ACC/UKR/25/Add.1
Page20
Question 34
(Question 80(Non-Tariff Measures, Quotas andLicensing). Please, provide adetailed listing by
individual tariff lines ofproducts subject toimport licensing requirements. What isthestatus
ofthedraft legislation covering non-tariff import regulations?
Answer:
Import licensing procedures were implemented inconformity withArticle 16oftheLawof
Ukraine “OnForeign Economic Activity ”.
Import licensing inUkraine isdefined asanadministrative procedure, which provides forfiling
ofapplications andotherdocuments totheappropriate administrative bodyasaprecondition fordelivery
tothecustoms territory ofimporter, which doesnotcontradict withArticle 1of“Agreement onImports
Licensing Procedures ”oftheUruguay Round.
Asystem ofimport licensing without quantitative restrictions isinforce inUkraine in1997.
Thelistofgoods subject toimport licensing isapproved bytheResolution oftheCabinet ofMinisters
ofUkraine of12December 1996 No.1590 “ListofGoods Subject toImports Licensing in1997”.
Listofgoods subject toimports licensing in1997
Products TNZED Code
Herbicides andPesticides* 38.08 (except forcertain shipments ofimported plant protection
products, imported freeofcharge exclusively forstatetesting
anddemonstrative research inscience andresearch institutions of
theAcademy ofSciences ofUkraine, Ministry ofhealth and
Ministry ofagriculture)
Pharmaceuticals** 30.01, 30.03-30.06 (except forveterinary medicines, dental and
seaming materials ofthecodes 30.06 40000, 30.06 10100, 30.06
10900)
Veterinary medicines*** 30.02 31000-30.02 90900 Cosmetic, hygiene products for
personal use**
33.02-34.02 (except foremulgator ofthecode34.02 11000)
Licenses areissued:
* upon theapproval oftheMinistry ofAgriculture andFood ofUkraine;
** upon theapproval oftheState Committee onMedical andBiological Industries;
*** upon theapproval oftheHead Department ofVeterinary, State Veterinary Inspection, the
Ministry ofAgriculture andFood ofUkraine.
Import licensing procedures areimplemented inorder toguarantee theconformity ofimported
goods withtechnical, pharmaceutical, sanitary, phytosanitary, veterinary andecological standards,
thatistoprotect health andlifeofpeople, animals andenvironment.
Theprocedure forlicenses registration isannually approved bytheResolutions oftheMFERT
ofUkraine registered intheMinistry ofJustice ofUkraine, which arepublished intheofficial press.
Intheinterim, until“Regulations onImport Licensing Procedure in1997”isissued, thevalidity of
MFERT Resolution of26June1996No.134-a “OntheApproval ofRegulations onExports Licensing
Procedures in1996 andRegulations onImports Licensing Procedures in1996”.
Allbusiness entities inUkraine, regardless oftheformofownership, haveequal rights toobtain
animport license. Goods canbeimported onthebasisofobtained license immediately aftercustoms
clearing ofthegoods.WT/ACC/UKR/25/Add.1
Page21
According tothevalid procedures theapplications areconsidered in15days. Importers ’
applications areconsidered without anyrestrictions upon theirarrival. Theprincipal criteria inthe
consideration ofapplications areconformity withtheinterests ofUkraine andfiling ofallnecessary
documents according totheprocedure.
Thevalidity termofthelicense isfixed according totheapplication andcanbeextended upon
theapplicants request, butnotlonger thantilltheendoftheyear.
Refusal toissue theimport license canbeappealed inthecourt.
Afeeforissuance oftheimport license (according totheResolution ofCMU of02August 1996
No.893) ispaidinamount of0.1% oftheoverall contract price, butnotmorethan15non-taxed minimal
personal income.
Question 35
(Question 172). Thequestionnaire onImport Licensing (included inWT/ACC/UKR/23) provides
apartial response. However, itdoesnotprovide information withrespect tothecosts ofimport
andexport licenses. Please provide more details ontherequirements andcosts.
Answer:
Theamount ofstatefeeforissuing export andimport licenses is:forexport licenses -according
totheResolution oftheCMU of5November 1991 No.312 “OnProcedures forExports ofGoods
(Works, Services) ”-0.1% ofcontract price (price ofthegoods mentioned inthelicense); forimport
licenses -according totheResolution oftheCMU of2August 1996No.893 “OntheAmount ofState
FeeforIssuing anImport Licenses ”-15non-taxed minimal personal income.
Regarding theinformation ontherequirements tolicense applications, thefiledmaterials shall
conform tothevalid procedures (administrative requirements) andUkrainian legislation (juridical
requirements), which doesnotcontradict totheParagraph 5(e)oftheArticle 5oftheAgreement on
Import Licensing Procedure oftheUruguay Round.
Import licensing isconducted according totheArticle 16oftheLawofUkraine “OnForeign
Economic Activity ”,andprocedures ofissuing alicenses areconducted according totheResolution
oftheMFERT of26February 1996No.134-a “OntheApproval oftheRegulations onExport Licensing
Procedure ofGoods in1996 andtheRegulations onImport Licensing Procedure ofGoods in1996”.
Question 36
(Question 78).Ukraine saysthatit“provides fortheapplication ofimport quotas asatemporary
measure toprotect national producers ”.Onwhat basis doesUkraine determine theintroduction
ofimport quotas? How aretheimport quotas administered? Could Ukraine, please, provide a
listofagricultural products currently subject totemporary import quotas?
Answer:
Regarding thelistofagricultural products currently subject totemporary import quotas, we
inform thatnoquantitative restrictions areapplied toimports ofgoods inUkraine.WT/ACC/UKR/25/Add.1
Page22
Standards andCertification
Question 37
Re.Question 92inUKR/25. Will thestandards thatarcdeveloped andenacted bybranch
ministries, rather thanbyDerzhstandart, besubject tothesame discipline ofprior information
toandcomment from foreign organizations through theInformation Center?
Answer:
Theprocedure ofpreliminary notification andobtaining ofcommentaries from foreign
organizations through theGATT/WTO Information Center onstandards developed andimplemented
bybranch ministries isenvisaged bytheRegulations ontheNational Information Center for
Standardization andCertification (GATT/WTO Information Center) adopted bytheGovernment of
Ukraine.
Incompliance withtheseRegulations, andinaccordance withArticle 3oftheWTO Agreement
onTechnical Barriers toTrade, thefunction oftheUkrainian GATT/WTO Information Center isto
interactwithallbranchministriesandotherauthoritiesempoweredtodevelopandapprovenewnormative
documents andamend them significantly, inorder to:
- obtain information regarding activities planned inthesphere ofstandardization, notifications
onnormative documents tobeimplemented orrevised, aswellasdraftstandards onallstages
ofdevelopment;
- notify inadvance allWTO members ontheintentions oftheUkrainian party toimplement
neworrevise existing standards;
- obtain, fromforeign organizations, commentaries ondraftstandards under development, and
communicate them todesigners forthepurpose ofusing infuture work.
Itistheplanning tocreate specialized subdivisions intheministries inorder toprovide for
contacts withtheNational GATT/WTO Information Center.
Question 38
ReQuestion 92inUKR/25. Weunderstand that60%ofthe1500newUkrainian standards (DSTU)
areharmonized withinternational standards. Ukraine additionally usesaround 20,000 COST
standards, many ofwhich arecompulsory. Arethese other standards compulsory alsoforimported
goods, which would significantly reduce theshare ofharmonized standards? Inthecaseof
harmonized standards, arethecorresponding foreign orinternational standards considered to
beequivalent andareforeign testing results accepted asabasis forcertification?
Answer:
Ofalmost 20000 standards oftheformer USSR (GOST), which wereeffective inUkraine as
of1January 1996, some contain requirements which provide forsafety ofproduce forindividuals '
lifeandhealth andenvironmental protection, aswellasrequirements andclauses providing forunity
andreliability ofmeasurements.
Since incompliance withtheeffective lawofUkraine suchrequirements arecompulsory.
Incases where relevant Ukrainian standards arenotavailable, thesaidGOSTs areusedforcompulsory
certification offoreign produce imported intothecustoms territory ofUkraine (relevant Ukrainian
produce isalsocertified incompliance withthese standards).WT/ACC/UKR/25/Add.1
Page23
Presently,ofthoseusedinUkraine,almost4000GOSTsareharmonized,orcompletelycoincide
withtheinternational standards (see.answer toquestion 25).
Results offoreign testsmaybevalidforcertification inthenational system incasewhen there
existbilateral agreements covering theprocedures ofrecognition withdueregard totherequirements
ofArticle 6oftheGATT/WTO Agreement onTechnical Barriers toTrade.
Question 39
Question 96inWT/ACC/UKR/25. UN-ECE 1958Agreement: What preparatory legislative work
isbeing done toallow Ukraine toaccede totheGeneva Agreement of1958 bytheendof1996?
Answer:
Atpresent, theResolution oftheGovernment ofUkraine onUkraine 'sAccession totheGeneva
Agreement isbeing drafted.
With regard toautomobiles please provide information onthefollowing:
Question 40
Does Ukraine accept asequivalent testresults carried outinother countries?
Answer:
Forthepurpose ofreducing unnecessary obstacles oftechnical nature intrade between the
EUcountries andUkraine, fortheperiod required foraccession totheGeneva Agreement of1958,
protocols oftestsforcompliance withUN-ECE Regulations arerecognized, provided theycontain
requirements notlower thantherequirements effective inUkraine.
Question 41
Itisourunderstanding thatcertification oforiginal spare parts issubject toanunspecified
"simplifiedprocedure".Whatdoesthissimplifiedproceduremean,whoistheresponsibleauthority,
andhowcould aforeign company obtain information on
this?
Answer:
Thesimplified procedure forspare partscovers original spare partssupplied byamanufacturer
ofroadvehicles, orproduced incompliance withroadvehicles manufacturer 'sdocumentation, provided
suchparts areusedforassembly ofvehicles. Certificates forsuchspare parts areissued through a
simplified procedure, which requires thefollowing documents:
- application forspecific product oragroup ofhomogeneous spare parts;
- copyofthecompliance certificate "approving thetypeofroadvehicle", obtained according
totheUkrCEPRO system regulations;
- manufacturer 'sdeclaration, confirming thatanattested quality control system isusedfor
production ofproduce tobecertified.
Forthefirsttime,thesecertificates areissued fortheperiod ofvalidity ofcompliance certificates
"approving ofthetypeofroadvehicle" andtheycover other models ofroadvehicles, production of
which hasbeendiscontinued.WT/ACC/UKR/25/Add.1
Page24
Question 42
Could Ukraine comment onhowtheretroactive imposition ofnewregulations onproducts that
havealready undergone certification, thelimited period ofvalidity ofcertification andthedivergent
treatment ofcarsaccording tothewaytheyareimported correspond totheTBT Agreement 's
principles oftransparency andproportionality.
Answer:
Road vehicles certification isconducted according totherequirements oftheWTO Agreement
onTechnical Barriers toTrade. Regulations, which areinforce inUkraine, donothavearetroactive
effect ontheresults ofcertification.
Asfarastherestriction oftheperiod ofvalidity ofcertificate isconcerned, itisconditioned
bythesmaller listofrequirements tovehicles. Provided allcompulsory requirements ofthenormative
basearesatisfied, thecertificate isissued withthevalidity termofuptothree years.
TheUkrCEPRO system provides fortheconditions ofmaking amendments tothecertification
procedure. These changes maytakeeffect notearlier than6months afternotification oforganizations
concerned.
Question 43
Could Ukraine explain theunderlying intentions forthedivergent treatment ofnewandsecond
hand cars?
Answer:
Newandsecondhand carsaresubject toequal duties.
Question 44
Ithasbeenreported thatUkraine willsoonpassadraft lawonnewcertification procedures. How
farhasthelegislation work progressed andwhat willbethecontent andtiming ofthisnewlaw
oncertification?
Answer:
TheDecree oftheCabinet ofMinisters ofUkraine "OnStandardization andCertification" is
inforce inUkraine, andinaccordance withitthenational system ofcertification, UkrCEPRO, has
beenestablished. Elaboration ofaDraft Lawonnewcertification procedures isnotforeseen.
Question 45
(Question 91(Standards andCertification) Could Ukraine make available totheWorking Party
acopy oftheNational Certification system UkrCEPRO?
Answer:
Tobesubmitted.
Question 46
(Question 94(Technical Barriers toTrade). Wewould liketoclarify whether Ukraine plans to
adopt theCode ofGood Practice contained intheWTO TBT Appendix 3instead of"Good
Manufacturing Practices" asindicated inUkraine 'sresponse.WT/ACC/UKR/25/Add.1
Page25
Answer:
These aredrawbacks intranslation. Answer toquestion 94WT/ACC/UKR/25 describes the
situation andplans ofUkraine asregards theadoption andimplementation oftheCode ofGood Practice
forPreparation, Adoption andApplication ofStandards (Annex 3oftheTBTAgreement), including:
- participation ofUkraine, asISOandIECmember since 1993,
- inthedevelopment ofinternational standards;
- participation ofUkrainian national technical committees forstandardization (TC)inthework
ofinternational TCs, andinsecretariats ofinternational TCs;
- membership oftheStateCommittee onStandardization ofUkraine, inthecapacity ofanational
standardization authority, inISONET;
- creation bytheGovernment ofUkraine, ofanISONET Information Center forStandardization
andCertification under theNational Standards Fund, which willoperate according tothe
requirements oftheWTO Agreement onTechnical Barriers toTrade.
Adoption andimplementation oftheCode ofGood Practice inUkraine isplanned for1997.
InNovember 1994, theState Committee forStandardization ofUkraine, incompliance with
Article 6oftheWTO Agreement onTechnical Barriers inTrade, proposed torelevant Canadian
authorities tosignanagreement onmutual recognition ofcertification results. However, unfortunately
thenational certification authority ofCanada (Standards Council ofCanada) rejected thiscooperation.
Question 47
(Question 94).CanUkraine confirm thatitsrelevant agencies willfully adopt andimplement
theCode ofGood Practice under theAgreement onTechnical Barriers toTrade (TBT).
Answer:
TheStateCommitteeonStandardization,astheonlynationalgovernmentalauthorityinUkraine,
responsible forpolicies inthesphere ofstandardization andcompliance assessment, willfullyrecognize
andapply theprovisions oftheCode ofGood Practice, contained intheAgreement onTechnical Barriers
toTrade in1997.
Sanitary andPhytosanitary Measures
Question 48
Ukraine 'salignment withtheWTO Agreement onSPSmeasures anditsannexes willrequire new
legislation. CanUkraine provide theWorking Party withdrafts ofsuchlegislation asandwhen
theyareavailable ?When doesUkraine intend toalign itself withWTO SPSrules?
Answer:
Withagoaltoaccede toGATT andjoinWTO, alargeamount ofwork isbeing doneinUkraine
onthedevelopment ofSanitary legislation inthedirection ofitsalignment withWTO onSPSrules.
Theregulatory documents oftheformer USSR arebeing reviewed, themainregulations oftheEuropean
andinternational legislation oncertain kinds ofgoods, transportation andstorage ofcargoes andothers
arebeing adapted tothelocalconditions. Newsanitary rules, regulations andrequirements arebeing
developed according totheinternational rules andconditions
During thisperiod oftransformation Ukraine willendeavour nottoimpede theconduct oftrade
operations asfarasPhytosanitary Measures areconcerned, provided suchmeasures willbeofnoreal
threat tothesanitary-epidemical well-being ofUkrainian residents.WT/ACC/UKR/25/Add.1
Page26
Question 49
Ukraine 'sstandards onthemaximum acceptable levelofradionuclides infoodareconsiderably
lower thanthose oftheFAO (Reply no.100UKR/25). DoesUkraine intend toeventually harmonize
them withrecognized international standards and,ifso,overwhat timeperiod ?
Answer:
Asitwasmentioned inprevious answers (Ukr. Answer 97),theMHU (Ministry ofHealth
ofUkraine) hassetupalevelofpermissible content ofradionuclides infoodaccording tothegeneral
permissible norms forpeople whoreside inareas contaminated afterChernobyl 'saccident.
Thesetofnorms arescientifically grounded andconform totherequirements ofthecurrent
situation inUkraine. Specialists willstudy thepossibility ofbringing them intocompliance withthe
international standards, especially withtheaimofcreation ofanunhampered commodity circulation
between countries. Later on,overthenext3-5years, theinternational andUkrainian legislation will
come toamutual accord intheseissues, thatdoesnotexclude evenreduction oftheexisting international
norms. Allthenecessary information ongrounding thenational norms onthecontent ofradionuclides,
caesium andstrontium infoodcanbeprovided byUkraine tothespecialists ofMember-states.
Question 50
ReQuestion 102. Which particular Ukrainian SPSrequirements arehigher thaninternational
standard 's?Intheinterest oftransparency, canUkraine provide theWorking Party withscientific
justification forthem andwiththeelements ofriskassessment upon which theyarebased?
Answer:
Itwasstated before (Answer 99),thatincaseofnecessity, according totheagreements of
theUruguay Round negotiations, Ukraine shallintroduce itsownSanitary standards inthefieldof
protection ofpeoples 'health, animals andplants. Itpertains, forexample, tothenorms ofpermissible
content ofremnants ofpesticides intherawmaterials andfood, migration ofpolymeric components
andother synthetic materials intosurrounding andmodel environments, safety requirements tothe
products forcertain groups ofpopulation (children, oldpeople, pregnant women andwet-nurses.)
These increased requirements (norms), are,asarule,scientifically grounded bytheappropriate
science institutions oftheMHU andcanbesubmitted foranyenquiry onthatorother product. This
concrete inquiry shallbeprovided totheMHU totheState Sanitary Doctor ofUkraine.
Question 51
(Question 105(Sanitary andPhytosanitary Measures). Thereply tothisquestion seems toimply
thataSPSexport certificate isrequired forallagricultural\fisheries imports. Furthermore, it
seems toindicate thattheUkrainian SPSimport certificate isgranted onlyafter imported goods
areexamined byUkrainian officials. These twopractices donotappear tomeet thetestofbeing
leasttrade restrictive.
Ourexporters havehaddifficulties understanding theimport requirements ofUkraine forproducts
thatrequire aSPScertificate ofimport. Weinspect andcertify exports ontherequest ofthe
importing country andonlyiftheimporting country requires anSPSexport certificate. Ukraine
willneed todetermine alistofquarantinable pests anddiseases andprovide itonrequest to
exporting countries. Furthermore, itwould bemore efficient ifUkraine would publish the
conditions forimporting goods affected bySPSprovisions sothatimporters would beaware of
theregulations prior toshipment ofgoods toUkraine.WT/ACC/UKR/25/Add.1
Page27
Answer:
Actually, eachkindofproduct, imported intoUkraine forthefirsttime, isgiven anational
document -ahygienic resolution (after anobligatory Statesanitary-hygienic examination andchecking
ofsafety indices ofthesanitary certificates given byforeign services.)
Ifrequested bytheMember-states, Ukraine could provide main requirements andconditions
fortheimports ofgoods covered bytheRegulations onSanitary andPhytosanitary Norms. However,
thepreparation ofthisgeneralizing document requires some time, because thisissue liesinthe
competence ofseveral offices (MHU, StateStandard, theMinistry ofAgriculture andFood ofUkraine,
Inspection ofVeterinary Medicine, Customs Committee, etc.).
2. Export Regulation
Question 52
ReQuestions 86-88: Please indicate whatconditions, ifany,Ukraine applies totheexport offerrous
andnon-ferrous metal scrap (including details ofbans, quantitative restrictions, export taxes,
andexport licensing requirements fordifferent kinds ofscrap), aswellasitsintentions withregard
totheelimination ofanysuchmeasures
Answer:
Inaccordance withthecurrent procedure onexport ofnon-ferrous metals, there areno
quantitative restrictions orexport duty. Atthesame time, inaccordance withthejointOrder ofthe
Ministry ofInternational Economic Relations andTrade ofUkraine dated 8July1996, No.368/127
"OntheProcedure ofAgreements (Contacts) onExport ofFerrous andNon-ferrous Metals Wastes
Registration" forexport oftheabove mentioned products, registration oftheabove contracts isrequired
toprovide expertise ofthecontracts inorder toavoid non-effective export, toprotect enterprises 'and
State interests.
During thefirstninemonths ofthecurrent year, export offerrous metals wastes increased
2.3times, ascompared tothecorresponding period in1995, andamounted to50.8mln.USD. This
isaconsiderable increase ofexported amounts inwastes ofnon-ferrous metals.
Inthefuture, theGovernment shallsticktoareasonable policy ontheexport offerrous and
non-ferrous metals byeconomic agents, notapplying theunjustified export restricting measures.
TheLawofUkraine "OnExport Duty onCattle andLeather RawMaterials" of7May1996,
No.180/96 andDecree ofthePresident ofUkraine "OnExport DutyonWaste Materials andScrap-iron
ofFerrous andNon-ferrous Metals" of31May1996, No.393, which determine export dutyratesfor
certain types ofproducts andrawmaterials were adopted withthepurpose ofbalancing export and
import operations, providing Ukrainian goods producers withthejob,utilizing production capacities
andfurther improvement oftheexport structure.
According totherequirements oftheWorld Bank andIMFonfulfilling provisions ofthe
Memorandum ontheEconomic Policy ofUkrainian Government andLiberalization oftheForeign
Economic Activity, theMinistry ofEconomy together withtherespective ministries conducted analysis
oftheeconomic effect from theintroduction oftheexport duties oncattle andleather rawmaterials
andalsoonwaste materials andscrap-iron offerrous andnon-ferrous metals. Results oftheanalysis
andreasons forabolishing export duties aresubmitted totheCabinet ofMinisters ofUkraine with
theletter of22October 1996, No.38-29/3006-10.WT/ACC/UKR/25/Add.1
Page28
ThePresidential Decree "OnRecognizing theDecree ofthePresident of31May1996, No.393
notValid" of18November 1996, No.1095/96 abrogated theabove indicated Decree ofthePresident
ofUkraine.
Documents onAbrogating theLawofUkraine "OnExport Duty onCattle andLeather Raw
Materials" arebeing considered bytheCommission onFinance andBanking oftheSupreme Rada
ofUkraine.
Aspecial export regime covers non-ferrous metals, rawmaterials fortheirproduction, rare
andground-rare metals including secondary, theiralloys, powders, semi-finished products, rolled
non-ferrous metals, waste materials andscrap-iron ofnon-ferrous metals.
TheResolution oftheSupreme Rada ofUkraine of31October 1996, No.450/96-SR "Onthe
Draft LawofUkraine onRecognizing some Decrees oftheCabinet ofMinisters ofUkraine notValid"
assigns theCabinet ofMinisters ofUkraine toprepare andsubmit forconsideration inJanuary 1997
totheSupreme Rada ofUkraine theDraft LawOnIntroducing special export regime forcertain types
ofproducts.
Question 53
ReQuestion 106.Ukraine hascommitted itself totheinternational financial organizations and
bilateraldonorsnottoapplycontractregistrationorotherexportcontrolswiththeaimofpreventing
anti-dumping measures, butonlyincases where ananti-dumping investigation isunder wayor
hasbeen completed withtheimposition ofanti-dumping measures. CanUkraine confirm that
itdoesnotoperate export controls motivated bytheneed toprevent anti-dumping measures?
Answer:
AsofJanuary 1997 theLawof7May1996 No.180/96-SR regarding export duties forlive
animals andrawleather isinforce inUkraine. Ananalysis oftheeffectiveness oftheLawofUkraine
of7May1996 No.180/96-SR onexport duties forliveanimals andrawleather wasconducted and
acorrespondingreportwassubmittedtotheSupremeRadaofUkraine.TheDraftLawonthecancellation
oftheLawonexport duties forliveanimals andrawleather waspassed totheSupreme RadaofUkraine.
Itistobeconsidered on21February 1997.
TheOrder ofthePresident ofUkraine of18November 1996No.1095/96 cancelled theOrder
ofthePresident ofUkraine of31May1996 No.393/96 onexport duties forferrous andnon-ferrous
metal wastes.
Thus, theGovernment implemented allnecessary steps tofulfil itsobligations andnowthe
problem oftheelimination ofexport duties forliveanimals andrawleather isincompetence ofthe
Supreme Rada ofUkraine.
SeealsoReply toQuestion No.52.
Export Incentive Measures, including Subsidies
Question 54
(Question 110(Subsidies/Export Incentive Measures). Could Ukraine provide adetailed listof
products which benefit from theelimination ofexport tariffs andVAT refunds? Also, please
provide thetypeofmeasure usedforeach.WT/ACC/UKR/25/Add.1
Page29
Answer:
Export dutyandVAT arenotimposed forexported products since thebeginning of1994. The
above measures were applied withthepurpose ofstimulation ofexports ofnational products.
Atthesame timetherestraining factor fortrade development wasthesystem ofexport quotas
andlicensing which wasinforce atthattimeandcovered upto70%ofexport potential ofUkraine.
Inthesecond partof1994, thesphere offoreign trade wasliberalised, firstofallthrough
elimination ofnon-tariff restrictions intheform ofquotas andlicensing regime.
Measures ontrade liberalisation, absent ofexport dutyandVAT forexported products, had
apositive influence onthedevelopment offoreign trade turnover, bothingeneral andonallgroups
ofcommodities oftraditional Ukrainian export.
Export amounts ofproducts andservices in1995increased incomparison with1994by18.5%
andamounted to15.3bln.USD. Import amounts increased by16.9% andamounted to16.5bln.USD.
Thepositive tendency inthedevelopment offoreign tradeturnover tookplace, inparticular inincreasing
therateofexport growth (118.5%) incomparison withimport growth (116.9%) thatstabilised the
general balance oftrade.
Export ofproducts increased by22.2% in1995andamounted to12.6bln.USD. Ahighrate
ofexport increase wasregistered onproducts ofnon-organic chemistry -by100%, mineral fertilisers
-by69.7%, rubber andgumproducts -70%, non-ferrous metals -11.1%, products fromnon-ferrous
metals -24.8etc.
Inthecurrent year, thedevelopment offoreign trade isalsointensive.
Foreign trade turnover inJanuary -September amounted to28.1bln.USD, thatis19%
(4.5bln.USD) more thaninthesame period oflastyear. Thetotalforeign tradevolume for9months
ofthecurrent yearexceeded theamount oftrade in1994 bymore than1bln.USD. Forthisperiod
export ofproducts fromnon-ferrous metals increased by36.5%, fertilisers by23.4%, meatandmeat
products by26%, grain crops -by350%, flour-grinding products -by200%, oilseeds andfruits -
by500%, mineral products -by30%etc.(information onexport ofproducts forJanuary -September
1996 attached).
Atpresent export dutyshallbepaidonlyforexport oflivecattle andrawleather. Onapplication
oftheCabinet ofMinisters, theSupreme Rada ofUkraine inDecember 1996 considered inthefirst
reading theDraft oftheLawofUkraine onelimination ofimport dutyforabove products.
TheexportofproductsfromUkraineisbeingconductedunderthegeneralregime.Theeconomic
agent irrespective oftheform ofownership enjoy thesame rights forexport.
Themeasures onimproving themechanism ofreimbursing theVAT forenterprises-exporters
from theaccount oftheState budget areforeseen in1997.WT/ACC/UKR/25/Add.1
Page30
IV. OTHER POLICIES RELATED TOFOREIGN TRADE
2. Agricultural Policies
Pricing Policy
Question 55
ReQuestion 124. Among agricultural products, doindicative export prices existonlyfor'cattle '
and'cowhides'asmentioned inreply no.2, WT/ACC/UKR/25? Aretheypurely informative or
dothecustoms authorities orother agencies stopexports atprices other thantheindicative price?
Are'cattle 'and'cowhides'subject toanti-dumping investigations ormeasures ortoVERs in
oneofUkraine 'strade partners? Ifnot,sinceUkraine hascommitted itselftointernational financial
institutions andother donors tolimit diequotation ofsuch prices toproducts subject lo
anti-dumping measures orVERs, when willtheybeabolished?
Answer:
TheDecree ofthePresident ofUkraine "OnMeasures ofImprovement ofConjuncture and
Price Policy inForeign Economic Activity" provides thattheMinistry ofForeign Economic Relations
andTrade ofUkraine mayintroduce indicative prices forgoods aspreventive measures against
anti-dumping processes.
SeealsoReply toQuestion No.1.
Question 56
Replies 121and122ofWT/ACC/UKR/25 say'there isatpresent nointervention buying agency '
whereas Reply no.156ofWT/ACC/UKR/25 says'intervention buying willbeallowed '.Doesthis
mean there willanintervention agency inthefuture and, ifso,when? How would such an
intervention agency befinanced given thedifficult budgetary situation inUkraine? How would
intervention affect international trade :assuming theintervention price isabove world prices,
1)howwould inverts beprevented from being soldunder theintervention price and2)howwould
export besustained intheabsence ofexport subsidies asdeclared inReply no.186
WT/ACC/UKR/25?
Answer:
SeeReply toQuestion 67
Question 57
(Question 121(Pricing Policy). Werequire some further clarification regarding theprocurement
tableprovided. Thetitlesays"procurement", while heading forcolumns 2-4refer to"production".
Also, whatismeant by"oilcultures", "grain cultures" and"agriculture cultures" intheparagraphs
following thetable? How cannumbers inthetextbereconciled withnumbers inthetable?
Answer:
Oilcropsincludesunflowerforseeds,soy-bean,winter-cornandspringrape,linseeds,castor-oil
plant, mustard plant andfalseflax.Grain crops include wheat, rye,barley, millet, buckwheat, rice,
maize, oats,sorgho, andleguminous plants. Theterms "agricultural crops" isusedasageneralizing
name forallkinds ofvegetation products.WT/ACC/UKR/25/Add.1
Page31
Question 58
(Question 124). Could Ukraine specify what itmeans by"orientating purchasing prices"?
Answer:
Theorientating purchasing prices foragricultural produce purchased fortheState resources
havenotbeenapplied since 1995. In1996, grain forState resources waspurchased onthebasis of
theaverage commodity exchange prices.
Question 59
(Question 126). Thereply refers toresponses to2and156,which donotexplain price parity nor
dotheydescribe howitisdetermined. Would Ukraine please provide further details.
Answer:
Theprice parity inUkraine isdefined bywayofcomparison ofgrowth ratesofprices for
industrial produce andservices, consumed bytheagriculture, withthegrowth rates ofprices for
agricultural produce. Forinstance, according tothestatistical datafortheperiod of1991-1995, prices
onmaterial-technical resources ofindustry havegrown at110thousand times, andpurchase prices
onagricultural produce -at18.6thousand times only, prices oncattle-breeding produce -at15.1
thousand times. Thisshows aconsiderable disparity intrade between different branches. Ittakes time
torenew theprice parity.
Privatization
Question 60
Given their current dominant position inthemarket, willUkrtekhagroservis, Ukragrokhim,
Ukrplodovoshprom andUkrprodresursyrovyna bebroken upintosmaller entities during
privatization orwilltheyremain oneentity? What special import conditions aretheygranted,
e.g.exemption ofVAT orcustoms duties, andunder what conditions ?Ifthere arefears that
theprivate sector could notfulfils their functions duetolackofprofits '(seeReply no.136
WT/ACC/UKR/25), arethese companies atpresent profitable oraretheybeing subsidized?
Answer:
According totheResolution oftheCabinet ofMinisters ofUkraine of31December No.1590 A
OntheListofGoods Subject toImport Licensing in1997weinform thatnoimport quotas areforeseen
in1997.
Ukragrotechservice,UkragrokhimandUkrplodoovochpromarenotcompanies,butassociations
ofenterprises thatexecute powers trusted inthem byfounding enterprises thataremajor objects of
economic activities.
Forexample, theUkragrotechservice system includes over1000 enterprises, Ukragrokhim
-over500,Ukrplodoovochprom -over350.Themanagement personnel ispaid from contributions
ofprofits offounding enterprises. Forthisreason, itisnotrational toraisetheissueoftheirprofitability.
Asfarasthespecial import conditions fortheseenterprises areconcerned, theyarenotgranted
anyspecial allowances.
Thetaxsystem inUkraine doesnotprovide fortaxation ofseparate economic agents. There
isnodependence onvolume ofproduction, services etc.WT/ACC/UKR/25/Add.1
Page32
Income from sales ofproduce, services andworks performed isthebasis fortaxation. So,
theabove enterprises arenotsubsidized.
Question 61
Reply no.139ofWT/ACC/UKR/25 states thattheMinistry (ofAgriculture?) 'finances works
onthesubstantial improvement ofland'.What doesthisinvolve inpractice andwhich forms can
benefit from suchintervention?
Answer:
Expenses fortheimprovement oflands, suchasgypsuming andchalking oflands, arecovered
from thestatebudget forbothpublic sector enterprises andfarmers.
Question 62
Reply no.142ofWT/ACC/UKR/25 saysthat‘thefarmer isfreeto(...)sellorlease thisland
athisowndiscretion ’,butalsothat‘theState retains ultimate ownership ofalllandinUkraine ’,
How canafarmer selllandwhich hedoesnotown?
Answer:
According toArticle 6oftheLand Code ofUkraine, thecitizens ofUkraine areentitled to
ownership oflandplots, inparticular forfarming. Thetransfer oflandplotsintotheproperty ofthe
citizens isperformed bylocal Radas ofpeople 'sdeputies forpayment orfree.Freelandplots not
exceeding theaverage sizearegiven tocitizens forfarming orother purposes stipulated intheCode.
Thecitizens maybuylandplotsthesizeofwhich exceeds theaverage sizeofland. Inaccordance with
theLand Code, thefarmer whohasbeengiven alandplotforprivate ownership mayin6years sell
orgiveitwithout changing thepurpose ofitsutilization.
Future Reforms intheAgriculture Sector
Question 63
(Question 156(Basic agricultural commodities). Thereply states inpartthat"One formofdomestic
support tobeimplemented willbetheintervention buying ofsome basic agricultural commodities".
Pleasedefine"basiccommodities"?IsUkrainereferringto"essential"commodities?Pleaseprovide
acomprehensive listofagricultural commodities falling into thecategory ofessential
commodities(HS basis)?
Answer:
Weweretalking about thecreation ofanIntervention fundtobuyinintostrategic commodities
(cereals, milkandmeatproducts andothers). Suchfundwillbeestablished infuture, provided there
arecostsintheBudget. Thecreation ofStateIntervention Provision fundisbeing planned. Decisions
willbetaken onmarginal ratesofprices andbalance ofsupply anddemand onagricultural produce.
But,fortoday, connected withtheeconomic situation inthecountry, creation ofsuchafundduring
thetransition period isbeing postponed tilltheeconomy isstabilised. There arenoprocurements to
thegiven fundforthecurrent moment, that'swhyitisimpossible todefine "basic" or"essential"
commodities, which willbebought in,and,moreover, togivenowa"comprehensive listofagricultural
commodities falling intothecategory ofessential commodities".WT/ACC/UKR/25/Add.1
Page33
Question 64
Question 157(Intervention Agency). Thereply states inpartthat"Itisenvisioned thattheMinistry
ofAgriculture andFood willestablish anIntervention Agency tobuyproducts atanannounced
minimum support price". Would Ukraine please provide more details onthisAgency: which
products willbeeligible/affected, what willitsoperating budget beandwhat willthelevel of
minimum support prices berelative toworld prices anddomestic prices?
Answer:
SeeReply toQuestion 67.
Question 65
(Question 157). Ukraine states that"some tariff protection willbeafforded toUkraine agriculture
from competing imported products". What levels ofdutyrates doesUkraine envisage toprotect
itsdomestic agricultural producers? Which agricultural products would besubject tohigh
protective tariffs?
Answer:
Most ratesareenvisaged as15to30percentofthecustom value. Theimport dutyratesof
5to10percentapply tomany products. Asmall number ofproducts hashigher protection tariffs,
forinstance sugar caneandsugar.
Question 66
(Question 159). Ukraine states that"because ofpurchasing power bydomestic consumers,
agricultural products arebeing exported inlarge volumes. This leaves thedomestic market
under-supplied. Noexport expansion efforts bytheState areexpected untilthedomestic market
returns toamore normal supply". Does Ukraine therefore haveexport controls orrestrictions?
How will"normal supply" bedetermined?
Answer:
Atpresent there arerestrictions onlyinexport ofcattle, sheep andleather. Normal supply
istheprovision ofUkrainian population withscientifically based norms offoodstuffs.
Question 67
(Question 162). Ukraine states thatthere iscurrently nointervention buying agency tosupport
agricultural prices. However, inreply toquestion 157,Ukraine states thatitintends toestablish
anintervention agency tobuyproducts andcommodities atanannounced minimum support price.
How doesUkraine seethisasproviding anopen andliberalised trading regime foragricultural
products? What agricultural products willbepurchased atthese minimum support prices?
Answer:
Suchagency willbecreated inthefuture provided thebudget hassufficient funds. Itisplanned
toestablish theNational Intervention Foodstuffs Fund, decisions willbetaken onmarginal prices and
equilibrium supply anddemand onagricultural products.WT/ACC/UKR/25/Add.1
Page34
Non-tariff Measures, Quotas andLicensing
Question 68
(Question 168(Non-Tariff Measures, Quotas andLicensing). Thereply states inpartthat“The
increase oftheduties forseveral especially sensitive agricultural commodities willbemade by
wayoftariffication oftheeliminated non-tariff measures ”.IsUkraine 'sofficial offer for
negotiations (i.e.attachment totheConcept Paper) areflection ofthisstatement? Could Ukraine
provide more details onthecurrent non-tariff measures inplace foragricultural products?
Answer:
Thecurrent Ukrainian legislation doesnotprovide fornon-tariff measures forimport of
agricultural products. Atthesametime, theintroduction ofsuchrestrictions isenvisaged intheDecree
ofthePresidentofUkraine"OnProcedureforApplicationofImportRestrictions".TheJointCommission
onImport Regulation willinform theWorld Trade Organization ofthefollowing:
- investigations started toestablish thepresence ofcausal relationship between theincrease in
import andtheserious damage caused tothedomestic branch ofindustry orthedanger ofsuch
damage;
- thepresence ofcausal-consecutive relationship between theincrease inimport andtheserious
damage caused tothedomestic branch ofindustry orthreat ofsuchdamage;
- resolutions onimport orextension oftheperiod ofimport ofgoods;
- changes inUkrainian legislation onimposing restrictions onimport ofgoods incompliance
withprinciples anddisciplines oftheGATT\WTO system.
Ukraine willeliminate itsquantitative restrictions according totheAgreement onAgriculture
andwillreplace them withtheprotection oftariff atthelevels, which allow trade totakeplace.
Question 69
(Question 169). Could Ukraine clarify what ismeant by"plant protection means", andgivesome
examples?
Answer:
Thetermplantprotection formulations applies tothefollowing notions ormeanings: pesticides
(herbicides, fungicides, insecticides), chemical formulas andplant growth regulators, biological
stimulators etc.
Question 70
(Question 168). Ukraine hasindicated thattheincrease oftheduties forseveral especially sensitive
agricultural commodities willbemade bywayoftariffication oftheeliminated non-tariff measures.
Wewould note thattariffication wasatechnique agreed andused intheUruguay Round
negotiations andithasnoautomatic application toaccession negotiations. Weexpect Ukraine
toremove itsquantitative restrictions inconformity withtheAgreement onAgriculture andreplace
them withtariff onlyprotection atlevels which allow trade toflow.
Werefer toUkraine 'sproposal totariffy non-tariff measures onseveral especially sensitive
agricultural commodities. Could Ukraine please provide details of:
- theagricultural products atsix-digit levelHS96 which itseesasaffected bytheproposed
tariffication ofnon-tariff measures ;
- therates ofimport dutywhich presently apply toeachofthese products ;
- thenon-tariff measures which presently apply toeachofthese products ;
- action taken todatetotariffy anynon-tariff measures which itmayhave removed.WT/ACC/UKR/25/Add.1
Page35
Answer:
Atpresent Ukraine hasnoquantitative restrictions onimported agricultural products. According
totheDecree ofthePresident ofUkraine “OnProcedure forApplication ofImport Restrictions ”
non-tariff measures maybetaken. Other questions aretheissue ofnegotiations.
Sanitary andPhytosanitary Measures inAgriculture
Question 71
Ukraine didnotreply toquestion no.174ofWT/ACC/UKR/25. What aretheprecise procedures
bywhich Ukraine determines thatimported products meet agricultural standards (ifnecessary,
provide legislation)? Forexample, inaletter no.15-2/197 of14May1996tocustoms andborder
veterinary inspectors, aswellastoother agencies including theSecurity Service ofUkraine, the
Chief Veterinary Inspector gaveinstructions tocarry outtheimport ofagricultural products only
withtheassent oftheMain Directorate ofVeterinary Medicine ofUkraine 'andto'increase control
overimportsofanimalproductsandrawmaterialsintoUkraine'.Whatdoesthistypeofinstruction
mean inpractice? What aretheprocedures toapply andenforce thesame standards inrespect
ofdomestic products?
Answer:
Under theLawofUkraine “OnVeterinary Medicine ”(Section 3,Article 13)andtheProvision
ontheHeadveterinaryadministrationwiththestateveterinaryinspectorateoftheMinistryofAgriculture
andFoodstuffs ofUkraine approved bytheresolution oftheCabinet ofMinisters ofUkraine of
20November 1992, No.629thebodies ofthestateveterinary medicine aregiven therighttoprotect
theterritory ofUkraine fromsome animal contagious diseases fromother countries during export or
import ofanimals, rawmaterials, animal products andfeed. Onthebasisofofficial information from
theInternational Epizootic Bureau (Paris) onthespread ofespecially dangerous diseases inforeign
countries theHead Administration forVeterinary medicine takesurgent decisions onrestricting import
ofanimals, animal products andrawmaterials fromthosecountries. Toprevent bringing animal diseases
fromabroad andinlinewithrecommendations oftheInternational Epizootic Bureau, on30May1996
theCabinetofMinistersofUkrainepassedresolutionNo.584“OnMeasuresonPreventionofDangerous
Animal Diseases ”.Thisgovernmental resolution envisages thatimport ofanimals, products andraw
materials ofanimal origin andtheirtransit viatheterritory ofUkraine isallowed withregard tothe
epizootic conditions intheexporting countries.
Export Restrictions inAgriculture
Question 72
What isUkraine 'saverage/nominal levelofprotection? Inthiscontext, weunderstand thattariffs
onsome agricultural products have been raised early thisyear. Please provide some specific
examples ofthese products. Please alsoclarify what arethemeasures stillapplying totheexport
ofgrain. Forexample, arelicenses andquotas stillapplicable totheexport ofsuchcommodities?
Answer:
Forsome products thatdonotsellwellinUkraine highimport duties were temporarily set.
Forinstance, thepreferential dutyforpotatoes is50percentandthefulloneis70percent,formilk
andcondensed milk-70and20percentrespectively. TheUkrainian Government hascancelled
quantitative restrictions onimport ofgrain starting from January 1996.WT/ACC/UKR/25/Add.1
Page36
Export Stimulation Measures, including Subsidies.
Question 73
(Questions 185,186,187,191(Export Stimulation Measures, including subsidies) Inanswer 185,
Ukraine indicates thatbeginning with1995, export subsidies nolonger exist. However, thereply
toquestion 186satesthat“Ukraine iscurrently developing legislation which willeliminate subsidies
toexport ”.Hasthelegislation beenprepared? Ifso,please provide acopy. Could Ukraine explain
itsanswer toquestion 187,which states thattheGovernment isdeveloping aDecree which could
stipulate export subsidies, inwhich caseMembers would beinformed? What doesthismean?
Does Ukraine nowhaveexport subsidies inplace foragricultural products (HSChapters 1-24)?
Hasithadanyinthelastthree years? Please provide afullanswer, using forguidance WTO
Secretariat 'sdocument WT/ACC/4.
Answer:
Theinformation onhome support andexport subsidies willbeprovided totheWTO
member-states ontheapproval oftheStateBudget for1997 bytheSupreme Rada ofUkraine andthe
approval ofExport Potential Development Program. ThedraftStateBudget envisages thesupport of
cattle-farming, itdoesnotprovide forexport subsidies.
Intheprevious reply thedevelopment oflegislation based ontheprovisions oftheAgreement
onSubsidies andCountervailing Duties oftheUruguay Round wasmeant.
Question 74
(Questions 185and190). Ukraine states thatitnolonger maintains export subsidies foragricultural
products. Wewould expect toseethisreflected asazerocommitment onexport subsidies in
Ukraine 'sschedule ofcommitments.
Answer:
Since theGovernment ofUkraine isstillworking onsuchnormative actastheExport Potential
Development Program, thefinalanswer tothisquestion willbegiven tothedelegations ofmember-states
aftertheabove document isconsidered andadopted bytheSupreme Rada.
Question 75
(Questions 187and188). WenotethatUkraine isseeking scope tointroduce export subsidies
inthefuture. Intheanswer toquestion 187Ukraine saysthattheGovernment isdeveloping
thedecree ofthePresident ofUkraine OnSupport toExports. Ifthisdecree stipulates export
subsidies, WTO members willbeinformed beforehand through theSecretariat. Ukraine says
intheanswer toquestion 188thebase period forcommitments onexport subsidies willbe
determined during consultations withWTO members. However, there isanexpectations (aspart
ofthestandstill concept ofaccession negotiations) thatexport subsidies willnotbeintroduced
between nowandtheendoftheaccession process. Itisourexpectation thattheschedules of
commitmentsonexportsubsidiesanddomesticsupportwillbeexaminedandagreedintheWorking
Party rather thanbilaterally.
Answer:
Ukraine completed andsubmitted document intheform ofACC/4 totheWTO Secretariat.WT/ACC/UKR/25/Add.1
Page37
State Trading inAgriculture
Question 76
(Question 206(Special Accession Program). Weseekfurther clarification. What doesUkraine
mean by"special accession programme"? Please provide anexample of"special".
Answer:
Thisissue istobenegotiated.
Barter Trade inAgriculture
Question 77
Reply No.114 UKR/25 provides dataonbarter inagriculture. What istheshare ofthestate in
these figures?
Answer:
Statistical information onStatebarter operations isnotcollected inUkraine. So,theshare of
barter trade isnotdefined.
Question 78
Thereferences made inReplies no.203ofWT/ACC/UKR/25 orno.210ofWT/ACC/UKR/25
provide noresponse tothequestion whether exemptions ofimport duties stillexistinagricultural
barter operations. Please reply tothisparticular question.
Answer:
Import dutyisnotcollected inbarter operations.
Question 79
(Question 114(Barter trade). Theanswer provided doesnotappear tobeconsistent withthe
response toquestion 67.Please provide, for1994and1995, information onagricultural products
exported through barter operations (products onanHSbasis, volumes andvalues)? Please provide
thesame information forimports.
Answer:
Barter operations arecharacterized withthefollowing parameters (millions ofdollars):
Product Code ofthe
GCFEA1994 1995
Total Barter Percentage Total Barter Percentage
1 2 3 4 5 6 7 8
EXPORTS
Total
including:1754.63 1038.85 59.20 2803.31 1117.59 39.90
LiveAnimals 01 24.98 23.69 94.8 88.62 54.70 62.0
Meat and
Meat products02 204.52 107.17 51.4 242.79 117.66 48.0WT/ACC/UKR/25/Add.1
Page38
Product Code ofthe
GCFEA1994 1995
Total Barter Percentage Total Barter Percentage
1 2 3 4 5 6 7 8
Dairy
Products04 162.64 120.74 74.20 273.25 125.99 46.0
Grain 10 25.31 16.01 63.30 117.03 45.86 39.0
Flour and
Groats11 30.95 13.62 44.0 118.42 54.71 46.0
OilPlanSeeds 12 77.37 57.15 73.90 36.22 16.64 46.0
Oil 15 121.59 92.19 75.80 164.29 88.78
Sausage,
preserved
foods16 87.65 68.68 78.40 77.43 31.47 41.0
Sugar 17 429.40 253.26 59.0 871.97 418.93 48.0
Preserved
Vegetables20 73.26 59.70 81.50 50.50 23.68 47.0
Liquors 22 203.16 68.58 33.70 363.89 25.03 7.0
IMPORTS
Total
including:588.91 173.22 29.40 1159.15 109.90 9.40
LiveAnimals 01 17.33 14.96 86.30 5.62 1.16 21.0
Meat and
Meat products02 10.75 5.97 55.50 51.51 1.64 3.0
Grain 10 36.40 19.65 54.0 57.72 29.23 51.0
Oilplant
seeds12 35.97 9.15 25.40 54.68 13.77 25.0
Oil 15 20.76 12.47 60.10 27.49 6.05 22.0
Sausage,
preserved
foods16 21.01 7.29 34.70 21.46 2.14 10.0
Preserved
vegetables20 19.97 7.52 37.70 17.01 3.21 19.0
Statistics inAgriculture
Question 80
(Questions 214&215(Production andConsumption data).Please provide further breakdown of
thefigures, using H.S. codes?
Answer:
Theproduction ofmajor agricultural products inpublic sector in1994 and1995 (thousand
tons).WT/ACC/UKR/25/Add.1
Page39
Product Code oftheGCFEA 1994 1995
Cereals 1001-08 32549.90 30674.70
Sugar-beet 0706 27421.60 28231.80
Sunflower 1202 1428.10 2648.10
Flax(fibre) 5301 49.10 48.0
Potatoes 0701 1231.40 602.70
Vegetables 0702-13 1787.5 1579.7
Fruit andberries 0801-13 346.20 310.70
Grapes 0806 291.70 335.70
Meat (cattle-growing) 0201-10 1756.30 1415.30
Milk 0401-05 10900.30 9401.50
Eggs (millions) 0406-07 4681.80 4160.90
Wool (tons) 5105-5105 14277.0 9665.0
5. Investment Policies
Question 81
ReQuestion 11.Thenewlaw“Ontheforeign investment regime ”grants foreign investors national
treatment ‘subject toUkrainian legislation ’.Doesthismean thatanyexisting orfuture legislation
cansupersede thenational treatment clause ofthislaw,andthusinvalid it?
Answer:
Thelaw“OnForeign Investment Regime ”,Part2“Government Guarantees fortheProtection
ofForeign Investment ”provides foreign investors withthefollowing guarantees: “Intheevent that
subsequent special legislation ofUkraine concerning foreign investment shallchange theterms and
conditions ofguarantees fortheprotection offoreign investments specified inPart2ofthisLaw, upon
request oftheforeign investor, government guarantees fortheprotection offoreign investment as
provided forinthisLawshallapply foraperiod oftenyears fromthedaywhen thelegislation came
intoforce”.
Oneoftheparagraphs ofPart2oftheLaw, which provides forguarantees ofstability, isas
follows: “Foreign investors ontheterritory ofUkraine shallreceive national treatment forinvestment
andother economic activity withtheexceptions provided forbyUkrainian legislation andinternational
agreements towhich Ukraine isaparty”.
Question 82
Please, giveusanexplanation asforregimes thatinfluence foreign investments inUkraine?
Answer:
Weprovide youwiththeinformation onregimes, which influence direct foreign investments
inUkraine.
Property Rights
Oneofthemostimportantlegislativeacts,thatinfluencestherestructuringofUkrainianeconomy
establishes aproperty right. TheLawofUkraine "OnProperty" No.697 of7February 1991determinesWT/ACC/UKR/25/Add.1
Page40
private property andensures theproperty rights inUkraine forUkrainian residents, foreign natural
persons andforeign legalpersons. Moreover, theLaw"OnProperty" allows theowners, including
foreign investors andjointventures, usetheirproperty forcommercial purposes, leasing andderiving
income, profit andproducts.
Land UseandLand Ownership
Problems withproperty andtherights touseandownlandareregulated bytheLand Code
ofUkraine adopted in1992. Formally, theLand Code recognises threeforms oflandownership: state,
collective andprivate, andensures theirequal legislative power andforce. Ontheother hand, theLand
Code alsostipulates thatalllandofUkraine isastateproperty, except thelandgranted tocollective
orprivate owners, andfurther establishes indetail aframework within which thelocalpeoples deputies '
bodies shallgrant therighttouselandtojointventures, foreign enterprises withfullownership, foreign
legalandnatural persons.
According totheLandCode, therightofprivate property tolandshallbegranted onlytonatural
persons, citizens ofUkraine, andmainly forthespecified purposes, suchasconstruction ofprivate
buildings andforagricultural purposes. TheLandCode shallprohibit landownership forforeign citizens
butensure therighttouselandunder conditions granted toUkrainian citizens.
Asdetermined, legal persons, resident companies ofUkraine orforeign legal persons shall
nothavetherighttolandownership inUkraine. According totheLand Code theymayownlandon
leasing terms orhavetherighttouseland.
Adoption ofUkrainian Constitution on28June1996 isconsidered tobethelaststepinthe
process offorming thelegislative structure basis. According tothevaluation provided byWestern
experts, anewconstitution isoneofthemostdemocratic intheworld. Itensures allfundamental rights
andfreedoms, including therighttokeeplandinprivate property.
Legislation Observance Mechanism
According totheexisting rules, theLawofUkraine "OnForeign Economic Activity" allows
theparties toadispute chose aplace foradispute settlement. Aguaranteed righttohavethesupport
ofcivilcourts issupplemented bythepossibility toapply "adhoc"tothetemporal orarbitration courts,
astheyarethebodies entitled topassing afinalsettlement. Arbitration maytakeplace bothinUkraine
andabroad.
In20April 1994theParliament approved theLawofUkraine "OnInternational Commercial
Arbitration" (ICA). ICAestablishes some clauses thatwerenotmentioned intheprevious law.These
clauses grant foreign businessmen more opportunities thanbefore insolving commercial disputes that
mayariseinrelation totheiractivity inUkraine.
Thus, ICAshalldetermine aprinciple ofexclusive arbitration jurisdiction developed bythe
partiesincaseofacommercialdispute.Inaddition,ICAshallallowUkrainianCivilCourt,thatconsiders
adispute, incaseitisprovided forbytherelevant arbitration agreement between theparties, atdiscretion
ofeachparty, discontinue theprocedure andreferadispute tothebody specified inthearbitration
agreement. ICAshallalsoensure thattherelevant arbitration decision isadmitted inUkraine regardless
ofwhere, inwhatcountry, thearbitration procedure tookplace.
TheCivil Code ofPractice shalldetermine aprocedure fortheimplementation ofdecisions
made bythecivilandarbitration courts ofUkraine. Infact,theCivil Code ofPractice establishes thatWT/ACC/UKR/25/Add.1
Page41
theprocedure fortheimplementation ofadecision byforeign court shallbecarried outaccording to
theinternational agreements.
Foreign Investment Treatment
AnewLaw"OnForeign Investments Regime" (LFI) wasofficially published on25April 1996
aftertheParliament ofUkraine hasadopted andthePresident ofUkraine hassigned itinMarch
1996...LFI replaced theDecree No.55-93 oftheCabinet ofMinisters ofUkraine "OnForeign
Investments Regime" (Decree), which hadbeeninforce since June1993.
According toitsclauses, theDecree granted thefive-year taxholiday onprofits ofenterprises
withqualification foreign investment. TheLaw"OnTaxation ofEnterprises Profits" (Corporate Tax
Law) abolished thefive-year taxholiday, granted earlier bytheDecree toenterprises withqualification
foreign investment. Butenterprises withqualification foreign investment registered before 1January
1995 maystillenjoy theprivileges granted bytheDecree. Inaddition, some privileges areemployed
byforeign investors registered after1January 1995.
LFIhasnotsignificantly modified therights andobligations provided earlier bytheDecree
toforeign investors.
LFIensures theforms offoreign investment useinUkraine, including:
(i) establishment ofanewcompany withUkrainian partner orthepurchase ofshares ofalready
existing Ukrainian companies;
(ii) opening ofprivate divisions, subsidiary offices orotherindependent structural unitsofaforeign
legalperson, orthepurchase ofexisting Ukrainian companies;
(iii) direct purchase ofalltypes ofrealestate orother property, ifitisdoesnotcontradict thecurrent
Ukrainian law,orthepurchase ofshares, bonds and/or other securities;
(iv) thepurchase ofrights touselandorconcessions forthedevelopment ofnatural resources
(independently, ortogether withaUkrainian partner);
(v) thepurchase ofother property rights; and
(vi) other forms, thatarenotdirectly prohibited bythecurrent Ukrainian legislation, including
investments inthemutual agreements onjointactivity withUkrainian partners.
Other important clauses ofLFIcanbeconcisely described (inbrief) asfollows:
enterprise withforeign investment (EFI) isdetermined asanenterprise ofanyorganisational
status founded according totheUkrainian law,withforeign investment constituting notless
than10percent ofitsstatute fund.
According toFITthefollowing types ofinvestment shallbeallowed:
(i) foreign currency;
(ii) reinvested Ukrainian currency;
(iii) alltypes ofmovable property andrealestate, andproperty rights related toit;
(iv) shares, bonds, other securities andcorporate rights;
(v) monetary, contractual earnings secured bythefirst-class banks;
(vi) intellectual property rights; and
(vii) therights tocarry outeconomic activity, including therights todevelop natural resources.
With aview toevaluate theforeign investment, theexchange rateofUkrainian currency is
established according totherateoftheNational Bank ofUkraine. TheDecree allowed theParties EFI
toagree ontheexchange rate,oncondition thattheexchange rateofUkrainian currency doesnotexceed
theNBU rate.WT/ACC/UKR/25/Add.1
Page42
Foreign investor shallhaveaguaranteed rightofprotection within 10yearperiod intheevent
ofanychanges intheUkrainian lawoninvestment inthepartofthestateguarantees forforeign
investments protection.
Foreign investments inUkraine arenotliable tonationalisation. Foreign investor shall be
guaranteed therighttotransfer theobtained proceeds andtherighttowithdraw theinvestments from
Ukraine within sixmonths from thedateoftermination ofinvestment activity.
Foreign investor mayimport property intoUkraine forintroducing itintothestatute fundEFI
without paying theimport duty.
When bringing inforeign investments intheformofproperty tobeintroduced inthestatute
fund, theenterprise mayissue apromissory noteintheamount oftheoutstanding import dutyand
redeem itwithin 30days. Such apromissory noteshallberepaid iftheproperty hasbeenplaced on
theenterprise 'sbalance andthelocaltaxagency, towhich enterprise belongs byitsaddress, hasput
itsownmark onthepromissory note.
EFIshallpaytaxes onimport infull,ifaforeign investment willbewithdrawn priortoathree
years lapse.
EFIshallpayalltaxes according totheLegislation ofUkraine.
Foreign investors mayobtain therights forthedevelopment ofnatural resources andconduct
economic activity withstateenterprises based onconcession agreements. Concession agreements may
beconcluded between aforeign investor andtheCabinet ofMinisters ofUkraine orother statebody
having relevant terms ofreference according tothecurrent legislation. Concession agreements shall
notexceed 99years. TheSupreme Rada shallapprove anyconcession agreement iftheyspecify the
clauses notprovided forbythelawsofUkraine.
Enterprises
Legal persons maybeestablished according tothetwoparallel laws: theLawofUkraine "On
Enterprises" andtheLawofUkraine "OnEntrepreneurial Activity". Themost reasonable forms of
entrepreneurial activity andthose thathavethepriority among foreign investors include jointstock
companiesandcompanieswithlimitedliabilitythathaveacommonconceptofinvestor'slimitedliability.
FullOwnership
Inorder tomake private business, anatural person shallregister himself asaprivate business
agent inthelocalgovernment body. Thisisauniform business activity system inUkraine thatislevied
aoneleveltax.There isnorequirement astothestatute fundofaprivate enterprise. Official feefor
theregistration oftheprivate enterprise isnothighdepending onthetypeofbusiness activity.
Corporations
Ukrainian LawonAssociations ofEnterprises (theLaw"OnEnterprises") provides forfive
corporate forms oflegal persons: jointstock companies (open andclosed) (JSC), limited liability
companies(Ltd.),companieswithadditionalliability,KPVandKDV.Majorityofenterprises,inpractice,
havebeenestablished inUkraine asJSCandLtd.WT/ACC/UKR/25/Add.1
Page43
Joint Stock Company
There aretwotypes ofJSC:openandclosed. Open JSCshallbeestablished through anopen
subscription tostocks; closed JSC,-through aprivate allocation between thefounders-shareholders.
Asaminimum twoshareholders shallbeneeded toestablish ajointstock company.
Limited Liability Company
Ltd.isinthemiddle ofAmerican corporation andpartnership. Itissimilar tocorporation since
itisalimited liability company anditsshareholders areresponsible inproportion totheirinterest in
thecompany. Atthesame timeLtd.issimilar topartnership since theirinterest isfixed incontractual
agreements based onthefounding documents. Therefore, thetransfer ofproperty rights shall be
performed through theassignment ofcontractual rights.
There aretwolevels oftaxation: Ltd.shallbepayaprofit tax,stock dividends shallbesubject
totaxation aftertheirdistribution. Toestablish anLtd.atleasttwofounders shallbeneeded.
Representations
Foreign legal persons shall beallowed toopen their representations inUkraine. The
representations shallbeallowed toperform marketing, facilitation andotherauxiliary functions infavour
offoreign legalpersons. Theregistration feeintheamount of$2.500 shallbepaidfortheregistration
oftherepresentation.
Subsidiaries
LFIalsoallows foreign companies toopentheirsubsidiary offices thatshallberegistered in
Ukraine.
Joint Ventures; Agreements onJoint Activities
Asarule,jointventures inUkraine areestablished intheform ofjointstock companies or
limited liability companies. TheUkrainian lawalsoallows foreign investors toinvest inUkraine without
alegalentity being established, onthebasisofagreements onjointproduction orjointactivities signed
withaUkrainian legalentity.
Taxation
On1January 1995, anewcorporate theLaw"OnTaxation ofProfits ofEnterprises" (TPE)
regulating thetaxation ofenterprises inUkraine came intoforce. TheTPEprovides forthenewtax
ratesapplied toUkrainian enterprises, andimproves theenterprise taxation forthepurpose ofbringing
theUkrainian taxsystem intocompliance withWestern standards. Veryimportant forforeign investors
isthattheTPEcancelled taxincentives formerly granted fortheperiod offiveyears toUkrainian
enterprises withqualification foreign investment bytheDecree oftheCabinet ofMinister ofUkraine
"OnForeign Investment Regime" No.55-93 of5June1993. However, enterprises withqualification
foreign investment, which wereregistered before 1January 1995 continue toenjoy thefive-year tax
holiday, asitwassetforth bytheDecree.
TheTPEcancelled theconcept ofincome taxation, where income wasdefined asthedifference
between thevalue ofgoods sold(works delivered, services rendered) andthecostofproduction thereof
(without wages andinterest paidoninputs). Starting from 1January 1995, theconcept ofincome
taxation wassubstituted withtheprofit tax.WT/ACC/UKR/25/Add.1
Page44
TheTPEfixed thebasic corporate taxrateonthelevelof30%. However, theprofit taxrate
isfixed onthelevelof45%incaseofintermediary activities orauction trade (except forsecurities
auctions, auctions forshares inenterprises, hardcurrency values orother financial instruments). Profit
obtained from lotteries, casinos andother playing business isliable totaxation onthelevelof60%.
Insome cases, favourable taxratesapplied toenterprises operating inagriculture, orengaged inrural
construction maybereduced.
Foreign Currency Regulation
InMarch 1993, theCabinet ofMinisters ofUkraine promulgated thefollowing threeDecrees
pertaining toforeign currency regulation inUkraine:
(i) Decree “OntheSystem ofForeign Currency Regulation andControl ”No.15-93;
(ii) Decree "The Provisional Procedure ofUseofForeign Currency Proceeds" No.16-93; and
(iii) Decree "OntheProcedure ofForeign Currency Payments"
Theabovedecreeswillhereinafterbecollectivelyreferredtoasthe"ForeignCurrencyDecrees".
InNovember 1994, Decree No.17-93 wassubstituted bytheLawofUkraine "OntheProcedure for
Foreign Currency Payments".
TheForeign Currency Decrees arebased onthemain principle thattheUkrainian currency
istheonlylegalmeans ofpayment ontheterritory ofUkraine, andthatitshould without anyrestrictions
beusedforrepayment ofdebts andother liabilities. Accordingly, Article 5(4)(e) oftheDecree provides
thatitisnecessary toreceive anindividual license fromtheNational Bank ofUkraine inorder touse
foreign currency ontheterritory ofUkraine asthemeans ofpayment.
TheForeignCurrencyDecreesstipulatethattheNationalBankofUkraineshouldissueindividual
licenses, interalia,forconducting thefollowing transactions:
- transactions infreely convertible currency ontheterritory ofUkraine between residents;
- useoffreely convertible currency ontheterritory ofUkraine intheform ofsecurities;
- opening ofbanking accounts byresidents abroad;
- placement ofinvestments abroad byresidents, or,except forcases ofsuccession, purchase
ofshares orholding ofapartofcapital byresidents inaforeign company;
- purchase orguaranteeing ofcredits infreely convertible currency byresidents, inamounts
exceeding those fixed bytheNational Bank ofUkraine;
- transfer offreely convertible currency fromUkraine (except forcases listed inthefollowing
paragraph).
Individual licenses arenotrequired, interalia,forthefollowing transactions:
- payments infreely convertible currency abroad byresidents forrepayment ofliabilities
(expressedinthiscurrency)beforenon-residentsinconnectionwithpaymentforgoods,services,
works, intellectual property andother property rights;
- payments infreely convertible currency abroad intheformofloaninterest andprofits offoreign
investors;
- transfers offreely convertible currency from Ukraine incaseoftermination ofinvestment
activities, ifthisforeign currency waspreviously brought intoUkraine bytheforeign investor.
Incompliance withtheResolution oftheBoard oftheNational Bank of16May1995, the
useoffreelyconvertiblecurrencyincashontheterritoryofUkrainewasprohibitedsince1August1995.
Ifotherwise notprovided byanindividual license, theobtaining oftheindividual license for
foreign currency transactions byofoneoftheparties gives thesame rights totheother party tothe
transaction.WT/ACC/UKR/25/Add.1
Page45
Another mainprinciple oftheForeign Currency Decrees inthatallresident legalentities should
sell100% offoreign currency proceeds fortheUkrainian currency tocommercial banks attheauction
interbank exchange rate.TheForeign Currency Decrees provide that(i)enterprises withforeign
investments (forexample, jointventures orenterprises fullyowned byforeign persons) mayretain
100% ofhardcurrency received fromexports of"self-manufactured" goods andservices, and(ii)that
allother Ukrainian legalentities mustsell50%offoreign currency proceeds forUkrainian currency
toUkrainian commercial banks.
Conversion andRepatriation ofProfits
Trade inforeign currencies isexercised atauctions heldbytheUkrainian Interbank Currency
Exchange. Before that,foreign currency maybesoldontheinformal interbank foreign currency market.
Ukrainian legal persons mayconvert local currency intoforeign currency onthebasis of
international contracts, orforotherreasons. (Repatriation offoreign currency dividends orofinvestment
itselftotheinvestor mayserve asthesufficient reason forpurchase offoreign currency). Anenterprise
should exercise conversion through acommercial bank: thecommercial bankreceives aconversion
instruction from theclient, examines thereasons onthebasis ofwhich theenterprise orders foreign
currency, andtakes partintheauction attheUkrainian Interbank Currency Exchange forthepurpose
ofpurchasing foreign currency fortheclient.
Foreign investors havetheguarantees ofrepatriation oftheirprofits andother foreign currency
funds deriving frominvestments. Aforeign investor mayconvert localcurrency intoforeign currency
through theUkrainian Interbank Currency Exchange. Inthiscase, aforeign investor instructs a
commercial banktotakepartintheauction forthepurpose ofconverting thelocalcurrency intoforeign
currency. Foreign investors mayconvert localcurrency forthepurpose ofrepatriating abroad legally
received profit ortheinvestment itself.
Banks andBanking Institutions
Ukrainian banking system isunder development. Itcomprises twolevels, theNational Bank
ofUkraine, andabout 250commercial banks, ofwhich fiveareformer specialized statebanks. One
ofthemistheSavings Bank (Oshchadbank), other threespecialize incredits (investments inindustry,
agriculture andsocial development), andthelastoneistheExport-Import Bank ofUkraine.
Oneforeign bank, Credit Lyonnais, hasopened aprivate commercial branch. Société Générale
hasalsopurchased acommercial banking license from theNational Bank ofUkraine, andopened a
multi-purpose branch inKyiv. Other foreign banks arealsotrying topurchase banking licenses.
Aconsiderable number ofcommercial banks hasjoined theSociety forWorld-wide Interbank
Financial Telecommunications (SWIFT).
Export-Import Regime
InOctober 1994, theCabinet ofMinisters, incompliance withtheAgreement between Ukraine
andtheInternational Monetary Fund declared thepolicy ofradical trade liberalization andliquidation
ofpractically allquoting andlicensing requirements.
Atpresent, imports ofalimited number ofproduce aresubject tolicensing withtheMinistry
ofForeign Economic Relations andTrade.WT/ACC/UKR/25/Add.1
Page46
Noexport duties orfeesweresetforthin1994 and1995. Itisnotplanned tointroduce them
in1997 aswell. There existthree levels ofimport dutyrates, which arecontingent onthecountry
oforigin ofproduce imported.
Antitrust LawandProtection from Unfair Competition
Fortheperiod from 1992 to1994, theParliament, theCabinet ofMinisters ofUkraine and
theAnti-Monopoly Committee (AMC) adopted aseries oflaws, decrees andnormative actsconstituting
theantitrust law,which includes:
(i) theLawofUkraine"OntheProhibitionofMonopolismandProtectionfromUnfairCompetition
inBusiness Activities", valid from 15March 1992 (theLaw);
(ii) "Methodological Recommendations forDetermination ofMonopoly Behaviour ofEnterprises
ontheMarket", approved byOrder No.1-roftheAMC of10March 1994 (the
Recommendations);
(iii) Decree oftheCabinet ofMinisters ofUkraine No.765“OnIntroduction oftheMechanism
forProhibition ofMonopolism onCommodity Markets ”,approved on11December 1994(the
Antitrust Decree).
Incompliance withtheAntitrust Decree, itisnecessary toreceive theAMC 'sapproval for
theestablishment, merger orpurchase ofenterprises, which mayresult inthecreation ofanew
monopolistic enterprise; and,toacertain extent, forthepurchase ofassets orownshares ofenterprises.
AMC 'sApproval fortheEstablishment ofEnterprises
Alegalentity maybeestablished inUkraine onlyafterAMC 'sapproval, iftheenterprise is
tobeestablished bytwoormore founders operating onaspecific commodity market, provided the
totalshare ofthese founders onthiscommodity market exceeds orisexpected toexceed 35%.
AMC 'sApproval forCreation orPurchase ofEnterprises
TheAntitrust Decree stipulates thatcreation ofenterprises, orpurchase byoneenterprise of
another enterprise must beapproved bytheAMC, if:
anyofmembering enterprises holds amonopolistic position onthiscommodity market; orthe
value offixed assets orsalesofallmembers inUkrainian currency isequal toUSD1million,
orifsalesofatleasttwomembers inlocalcurrency exceed USD 100thousand (even despite
noneofthemembers holds amonopolistic position onthiscommodity market).
Protection ofIntellectual Property Rights
Ukraine isamember ofParis andMadrid Agreements. Itisalsoamember oftheAgreement
onPatent Cooperation andtheConvention onProtection ofCopyrights. On31May1995, theParliament
adopted thelaw,which provides forUkraine 'sjoining theBernConvention onProtection ofPieces
ofLiterature andArt(Paris textof24July1991 assupplement). Joining theBernConvention isthe
nextpositive stepinthesphere ofprotection ofintellectual property rights. Membership intheBern
Convention islimited, therefore pieces ofliterature andartwhich havenotyetbeendeclared "the
property ofthenation", arenotprotected. Incompliance withtheLawofUkraine "OnInternational
Agreements ofUkraine", allinternational agreements which Ukraine hasjoined, arethepartofthe
Ukrainian domestic law.Accordingly, articles oftheabove conventions arethepartofUkrainian
intellectual property rights regime.WT/ACC/UKR/25/Add.1
Page47
InUkrainian law,thetermofunfair competition hasarather widemeaning, andincludes illegal
useofpatents, trademarks, names, illegal copying ofproducts, forms, tradestyle, imitation, counterfeit,
breach oftrade secrets anddisclosure ofsecret information, public slander etc.
Question 83
(Question 223(TRIMS). HasUkraine reviewed theillustrative listofTRIMS intheannex tothe
TRIMS Agreement? CantheUkrainian authorities confirm thatUkraine doesnotmaintain any
trade-related investment measures asdefined intheannex totheTRIMS agreement?
Answer:
Ukraine revised theillustrative listTRIM totheTRIM Agreement andnotifies:
AccordingtotheLawofUkraine“OnForeignInvestmentRegime”foreigninvestors,aregranted
thenational treatment ofinvestment activity. Enterprises withforeign investments arenotgiven
theinvestment privileges separately, asitisnoted intheannex totheillustrative list.
Question 84
(Question 224). Werequire further clarification regarding different levels oftaxation depending
onthelevelofprocessing, toencourage domestic processing ofrawmaterials.
Answer:
SeeResponse toQuestion 82insection "Taxation". There areno“different levels oftaxation
depending onthelevelofprocessing ”inUkraine.
6. Government Procurement
Question 85
Ukraine haspreviously indicated thatitwillapply tojointheGovernment Procurement Agreement.
When canaformal application beexpected? When cananinitial entity listbeexpected?
Answer:
Ukraine doesnotaccede totheGovernment Procurement Agreement yet.After itjoinsWTO
andstabilizes itseconomy thisissue maybeconsidered.
Question 86
(Questions 225-244 (Government Procurement)). Wewould appreciate more detailed statistical
information onthesizeandstructure ofUkraine 'spublic sector market, andentity listings
(including state enterprises).
Answer:
Nostatistical information isbeing gathered inUkraine onthesizeandstructure ofUkraine 's
public sector andentity listings.
Question 87
(Question 241(Government Procurement)) Canada would liketoobtain apreliminary draft of
thenewUkrainian lawonprocurement when itismade available on1July1996.WT/ACC/UKR/25/Add.1
Page48
Answer:
ThenewDraft LawonState Procurement isbeing intheprocess ofdevelopment.
9. TRIPS
General
Question 88
Could theGovernment ofUkraine clarify whether therelevant laws andregulations forthe
protection ofIPRs, notably those listed inWT/ACC/UKR/18, areavailable intheWTO Secretariat
inoneoftheworking languages (preferably inEnglish)? Ifnot,could theUkrainian Government
provide these laws(inEnglish)?
Answer:
Ukraine isready tosendtotheWTO Secretariat theUkrainian Laws “OnProtection ofRights
onInventions andUtility Models", "OnProtection ofRights inIndustrial Designs ”and“Protection
ofRights inMarks forGoods andServices ”translated intoEnglish.
Question 89
Could theGovernment ofUkraine explain which privileges aregranted toCISMember States
onthebasis ofbilateral agreements '(answer toquestion No260)?
Answer:
According tothebilateral agreements onmutual representation ofinterests, signed bytheState
Agency ofUkraine onCopyrights andRelated Rights withCopyright-Legal Organizations ofsome
other CIScountries nopreferences orincentives aregranted totheauthors fromtheseorother countries
incomparison withthelevelofprotection oftherights ofauthors fromothercountries, whoareprotected
according totheinternational agreements ofUkraine.
Asanadditional explanation totheanswer onquestion number 260(WT\ACC\UKR\25) we
inform thatthe“Agreement between theUkrainian Government andtheGovernment oftheRussian
Federation onCooperation intheField ofIndustrial Ownership Protection ”andtheanalogical
“Agreement between theUkrainian Government andtheGovernment oftheByelorussian Republic
onCooperation intheField ofIndustrial Ownership Protection ”areinforce now.
Inaccordance withprovisions ofthese agreements onthebasis ofmutuality principle:
- applicants ofbothsides aregranted therighttosubmit applications tothepatent agencies on
issue ofprotective documents andconduct correspondence onthem inRussian;
- applicants andpatent attorney ofbothparties canconduct activity directly withpatent agencies
ofparties;
- feesforactions related toprotection ofrights onindustrial ownership objects andalsocharges
forofferingservicesarepaidinthenationalcurrencyattherateestablishedbyparties'authorized
bodies.
Copyright andrelated rights
Question 90
Could theGovernment ofUkraine explain howitslegislation deals withcomputer programs (in
thecontext ofUkraine 'sanswer toquestion No259concerning Articles 11and14(4) oftheTRlPs
Agreement ).WT/ACC/UKR/25/Add.1
Page49
Answer:
According totheDirective oftheCouncil oftheEConlegalprotection ofcomputer software
of14May1991 andaccording tothesub-paragraph 1,Paragraph 1,Article 5oftheLawofUkraine
"OnCopyrights andRelated Rights" computer software isgranted thesame protection astheworks
ofscience, literature andarts.
Patents
Question 91
Initsanswer toquestion No.262theGovernment ofUkraine mentions thatthedrafting ofa
newlawontheprotection ofinventions andutility models isforeseen. What isthetimeframe
forthisnewlaw?
Answer:
Activity related tointroduction ofchanges andsupplements tocurrent legislation onprotection
ofrights onindustrial ownership objects withtaking intoaccount provisions oftheAgreement on
Trade-Related Aspects ofIntellectual Property Rights isbeing conducted now.TheStatePatent Agency
ofUkraine plans tofinish thisactivity in1997.
Enforcement
Question 92
Could theGovernment ofUkraine summarize themain elements ofitsjudicial system including
theinvolved bodies?
Answer:
Legal system ofintellectual property rights protection inUkraine canbeconducted intwoways,
andindetail:
- through administrative procedure;
- through judicial procedure.
TheState Patent Agency ofUkraine (hereinafter referred toasDerzhpatent ofUkraine), the
StateAgencyofUkraineonCopyrightsandRelatedRights(hereinafterreferredtoasDAASPofUkraine)
andtheAnti-monopoly Committee ofUkraine conduct intellectual property rights protection through
administrative procedures.
According toUkrainian legislation anydecision oftheDerzhpatent ofUkraine related toan
application onindustrial property objects oronacknowledgment invalid ofprotective document for
industrial property objects canbeappealed totheAppellate Council oftheDerzhpatent ofUkraine.
Protection ofindividual andproperty rights ofpersons whohavecopyrights andrelated rights
isconducted through aprocedure established byadministrative, civilandcriminal legislation ofUkraine.
TheAnti-monopoly Committee ofUkraine considers applications onillegal useofindustrial
property objects, rational suggestions, firm'sname orgoods marking, andalsoillegal copying ofform,
package, outside decoration; andimitation, copying, direct reproduction ofother entrepreneur 'sgoods
andunauthorized useofhisname.
Judicial procedure ofrights 'protection consists inthefollowing: individuals orlegalentities
havetherighttoappeal directly tothecourt ontheirintellectual property rights protection escapingWT/ACC/UKR/25/Add.1
Page50
administrative bodies. Concerning industrial property objects disputes onauthorship, co-authorship,
ascertainment ofprotective document owner, violation ofproperty rights ofaprotective document
owner, conclusion andfulfilment oflicensing agreements; andtherightofpreliminary use,reward
toauthors ofindustrial property objects, compensations andother disputes areconsidered through the
judicial procedure.
742public courts ofthefirstinstance, Court oftheCrimean Autonomous Republic, 24oblast 's
courts and2municipal (Kyiv andSevastopol which havestatus ofoblast 'courts), theSupreme Court
ofUkraine, theHigh Arbitration Court ofUkraine, theArbitration Court oftheCrimean Republic,
24oblast 'sarbitration courts and2municipal arbitration courts (Kyiv andSevastopol which havestatus
ofoblast 'sarbitration courts) conduct protection ofrights through judicial procedure.
According totheConstitution ofUkraine, allpowers inUkraine areimplemented onthebasis
ofitsdivision onlegislative, executive andjudicial powers. Existing international agreements arepart
ofnational legislation.
Justice inUkraine isadministered exclusively bythecourts andtheirjurisdiction covers all
types oflegal connections emerging inthecountry. Decisions ofthecourts areobligatory allover
Ukraine. Thesystem ofthecourts ofoverall jurisdiction inUkraine isoperating ontheprinciples of
territory andspecialization.
Thehighest bodyinthesystem ofcourts ofoverall jurisdiction istheSupreme Court ofUkraine.
According tolegislation, therearealsocourts ofappeal andlocalcourts. Independence andinviolability
ofthejudges inUkraine isguaranteed bythelawsandtheConstitution ofUkraine, anytypeofinfluence
onjudges isprohibited, ajudge cannot beapprehended tillheisaccused bythesentence ofatrial.
Judges occupy theirposts forunlimited period oftime, excluding judges oftheConstitutional Court
andjudges, appointed tothepostforthefirsttime. Firstappointment tothepostofprofessional judge
forthefiveyeartermisbythePresident. Allother judges areelected bytheSupreme Rada under
theprocedures provided forinthelegislation fortheunlimited period oftime.
Trials areconducted before judge solely, byaboard ofjudges orbyajury.
State provides appropriate conditions andfinancing fortheoperation ofcourts andactivities
ofjudges.
Another important element ofthejudicial system istheProsecutor 'soffice, which hasthe
functions ofprosecution onbehalf ofthestateatthetrial, representation ofinterests ofacitizen or
thestateatthetrial, supervision oftheabiding bylawsbythebodies, conducting prompt search
activities, gathering ofwitness testimonies, preliminary investigation, supervision oftheabiding by
lawsinimplementation ofthedecisions ofthecourt oncriminal cases, andalsoinimplementation
ofother compulsory steps inrespect oflimitation ofindividual freedom ofacitizen.
TheMinistry ofJustice ofUkraine, according toitsauthorities, provides judicial bodies with
consultative andinformation support, coordinates activities ofthebodies ofstatenotaries.
TheMinistryofInternalAffairsofUkrainesupervisesmilitiabodies,whichimplementprotection
oflegalorder.
Supervision ofenforcement ofbythelegislation inprotection ofintellectual property rights
isalsodone bytheState Committee ofUkraine onCopyrights andApplicable Rights, State Patent
Committee ofUkraine, StateCustoms Committee, bodies ofStateTaxAdministration, Anti-monopoly
Committee andothers.WT/ACC/UKR/25/Add.1
Page51
Question 93
Initsanswer toquestions No257,258 onenforcement (Part inoftheTRIPs Agreement) the
Ukrainian Government states several timers thatitbelieves thatitslaws“meet ingeneral the
requirements... ”“fulfils toacertain extent... ”or“donotcompletely meet... ”.Could theUkrainian
Government explain inmore detail (beyond what isalready mentioned inWT/ACC/UKR/25)
where theshortcomings are?
Answer:
Themain drawback liesinthenon-conformity ofthecurrent legislation ofUkraine withthe
requirements ofArticles 50-60 oftheTRIPs Agreement.
Question 94
Initsanswer toquestion No257theUkrainian Government mentions amendments toitsCriminal
Code. When arctheyexpected tobeinforce? What istherelationship between (these amendments
andthedraft Criminal Code mentioned inanswer toquestion No262?When isthisdraft expected
tobeinforce? Could theUkrainian Government provide acopy?
Answer:
Ukraine iscurrently conducting aconsiderable work onbringing itslegislation inallfields
ofactivity inaccord withGATT Provisions aswasmentioned inanswer tothequestion number 262.
Italsoconcerns totheCriminal Code. Interested ministries andorganizations havesubmitted proposals
onchanges andsupplements totheabove-mentioned legalact.Unfortunately, there isnopossibility
nowtosendacopy andtoinform thedatewhen therenewed Criminal Code ofUkraine willcome
intoforce.
TheDraft LawofUkraine "OnAmendments andModifications totheCriminal Code ofUkraine
andAdministrative Code ofUkraine" involve thestrengthening ofcriminal andadministrative
responsibility fortheviolation ofexisting legislation inprotection ofintellectual property rights and
applicable rights isimplied, isapproved bytheMinistries andagencies concerned andtilltheendof
1996 itwillbehanded totheCabinet ofMinisters ofUkraine.
Question 95
Arethere provisions intheUkrainian patent lawconcerning issuance ofcompulsory licences,
and,ifso,what aretheconditions onwhich suchlicenses areissued?
Answer:
Yes,thereare.Articles 24and26oftheUkrainian Law"OnProtection ofRights forInventions
andUtility Models" include conditions toissue compulsory licenses.
Article 24.Compulsory Alienation ofRights.
Proceeding frompublic interests andinterests ofthenational security theCabinet ofMinisters
ofUkraine hastheright toallow usage ofinvention (utility model) without patent 'sowner consent
butpaying himappropriate compensation.
Disputes onconditions oflicense issue andpayment ofcompensation anditssizearesettled
through theCourt.WT/ACC/UKR/25/Add.1
Page52
Article 26.Obligations under thepatent.
Owner ofthepatent should usehonestly anexclusive rightunder thepatent.
Ifaninvention (effective model) isnotusedorusedinsufficiently inUkraine during threeyears
starting fromthedateofinformation publication onpatent 'sissueorfromthedatewhen useofinvention
(effective model) wasstopped, thenanyperson whohasadesire orshows readiness touseinvention
(effective model) inacaseofpatent 'sowner refusal toconclude alicensing agreement canappeal to
theCourt (theArbitration Court) onissue oflicense tousetheinvention (effective model).
Ifpatent 'sowner cannotprove non-use oftheinvention (effective model) iscaused byreliable
reasons, theCourt (theArbitration Court) canmake adecision toissuealicense toaninterested person
tousetheinvention (effective model) withdefining volume ofitsusage, license ’svalidity period, size
andprocedure forpaying royalties tothepatent owner.
Apatent owner isrequired togivepermission (toissuealicense) totheowner ofalaterissued
patent forusing theinvention (effective model) ifinvention (effective model) ofthelatter isdesigned
forachievement ofanother aimorhassignificant technical andeconomical advantages andcannot
beusedwithout breach ofthefirstowner 'srights. Issue ofsuchalicense cannotbestipulated by
appropriate license oftheowner withalaterissued patent whoisobliged toissue thelicense ifhis
invention (effective model) improves theinvention (effective model) oftheowner withanearlier issued
patent orisdesigned forachievement ofthesame aim.Alicense isissued asitisrequired tousean
invention (effective model) byapatent owner whoordered suchlicense.
Disputes related tolicenses aresettled through theCourt.
Question 96
Does Ukrainian lawensure patent protection inthepharmaceutical, chemical, agricultural/food
sectors?
Answer:
Yes.TheUkrainian Law“OnProtection ofRights forInventions andUtility Models ”provides
legalprotection ofinventions intheabove-mentioned fields.
Question 97
Arethewell-known trade marks protected, incompliance withArt.16(3)oftheTRIPS Agreement,
against unauthorized use?
Answer:
Yes.Inaccordance withtheUkrainian Law“OnProtection ofRights onMarks forGoods
andServices ”(paragraph 3ofthe5thArticle):
“Marks which areidentical oraresimilar tosuchanextent thattheywould bemixed with
marks ofother persons ifthese marks areprotected without registration onthebasis of
international agreement where Ukraine isaParty cannotberegistered asmarks ofdesignation. ”
Question 98
Arethere provisions inUkrainian lawconcerning protection ofgeographical indications forwines
andalcoholic beverages?WT/ACC/UKR/25/Add.1
Page53
Answer:
Thecurrent legislation ofUkraine doesnotprovide protection ofgeographical origin indicators
forgoods including wines andstrong drinks. However, in1996 theState Patent Agency ofUkraine
developed andsubmitted totheSupreme Rada ofUkraine theDraft LawofUkraine “OnProtection
ofRights onGeographical Origin Indicators forGoods (services) ”including protection ofrights on
geographical origin indicators forwines andstrong drinks.
Question 99
What kindofsystem, national orinternational, oftheexhaustion ofintellectual property rights
isUkraine using?
Answer:
Certain standards ofinternational conventions onprotection oftheintellectual property rights
areimplemented inUkraine together withnational legislation. Inparticular, Ukraine approved its
participation intheWorld (Geneva) Convention onCopyrights of1952, joined theBernConvention
onProtection ofLiterature andArtWorks. TheMinistry ofForeign Affairs ofUkraine isworking
onthedocuments forUkraine 'saccession totheConvention onProtection ofAudio Records
Manufacturers from Illegal Utilization ofsuchAudio Records.
Question 100
IsUkraine anticipating toaccede totheInternational Convention onProtection ofArtists,
Performers, Producers andRadio %TVBroadcasters of26October 1961 (Rome Convention)?
Answer:
Ukraine'saccessiontotheInternationalConventiononProtectionofPerformers,AudioRecords
Manufacturers andBroadcasters of26October 1961 isplanned forthefirsthalfof1997.
Question 101
Arethere Provisions inUkrainian LawonCopyright andRelated Rights thatprovide protection
standards corresponding tothose provided intheRome Convention?
Answer:
ChapterIII“RelatedRights”oftheLawofUkraine“OnCopyrightsandRelatedRights”provides
forprotection oftherights ofperformers, audio records manufacturers andbroadcasters, criteria for
granting ofsuchprotection andterms forprotection ofthese rights. Standards oftheLawofUkraine
“OnCopyrights andRelated Rights ”dully conform totherequirements oftheRome Convention and
provide fortheappropriate level ofprotection ofinterests ofaudio records manufacturers and
broadcasters.WT/ACC/UKR/25/Add.1
Page54
V. TRADE AGREEMENTS
1. Bilateral Preferential Agreements
Question 102
Weunderstand thatUkraine hasbilateral trade agreements withBulgaria, Hungary, andthe
Czech andSlovak republics. Please clarify whether these agreements accord preferential access
toUkrainian market forservices, including financial services. Ifaccepted asamember ofthe
WTO, willUkraine extend suchaccess toother members onanMFN basis?
Answer:
Theactive bilateral Agreements onTrade-Economic Cooperation withEuropean countries in
market access ofgoods andservices inUkraine provide theMost Favoured Nation Regime.
When Ukraine accedes totheWTO, theMost Favoured Nation Regime willspread toother
WTO Member States provided bytheProtocol onAccession.
2. Regional Integration
Question 103
Reply 272slates thatVAT andother taxexemptions arenotprovided forintrade agreements
withtheother CIS.Nevertheless, itwould seem thatUkraine doesexempt imports from theCIS
from VAT onthegrounds thatVAT islevied bytheCISontheir exports, isthisstillthecase?
Does thisoccur foranyother types ofinternal taxation aswell?
Answer:
Inaccordance witharticle 3ofthemultilateral Agreement onCreation oftheFreeTrade Zone
signed bytheCISMember states, relevant provisions oftheintergovernmental bilateral agreements
onfreetrade between theabove mentioned states, Parties shallnotapply duties andtaxes andfees
ofthesame effect, aswellasquantitative restrictions onimport and/or export ofgoods originating
from customs territory ofoneParty anddesigned forcustoms territory ofother Parties.
Thewrong conclusion concerning theexemption from VAT (thatisainternal indirect taxof
astate), including import ofgoods byUkraine, forwhich VAT isapplied when exported fromaCIS
Member state, canbemade based onart.8ofthemultilateral Agreement andrelevant articles ofbilateral
agreements onfreetraderegarding application ofinternal taxesandother revenue duties. Inaccordance
withtheabove article, Parties shallnotimpose internal taxes onimport andexport ofgoods inthe
amount exceeding thelevelestablished fordomestic goods. Thus, application ofVAT, forinstance
byRussia, forexport ofgoods intoUkraine doesnoteffect Ukraine 'scollection ofVATfromitsimport,
since domestic taxes ofthesovereign states areconcerned.
Even inrelationship between thestates which concluded anagreement onevasion ofdouble
taxation, double application ofVATinforeign tradecannotbeprevented sincetheprocedure ofapplying
direct taxes isthesubject ofthisagreement. Theprocedure ofVAT application isnotspecified in
itsprovisions.WT/ACC/UKR/25/Add.1
Page55
WT/ACC/UKR/26- ListofLegislative Acts
Question 104
Please provide theWorking Party withacopyoftheOrder oftheMinistry ofForeign Economic
Relations andTrade ofUkraine of26February 1996NE134-a, "Ontheapproval oftheRegulation
onExport Licensing Procedures forGoods in1996aRegulation ofImport Licensing Procedures
forGoods in1996".
Answer:
TheResolution oftheMinistry ofForeign Economic Relations andTrade ofUkraine of26
February 1996 No.134-a “OntheApproval oftheRegulations onExports Licensing Procedures of
Goods in1996, aRegulation onImports Licensing Procedures forGoods in1996”isnomore valid
butitsprovisions arecomprehensively described intheQuestionnaire onImport Licensing andinreplies
toadditional questions toACC/UKR/25 insection "Non-tariff Measures, Quotas andLicenses".
Question 105
Please provide theWorking Party withacopy ofthedraft Decree ofthePresident ofUkraine
"OnProcedure 'sforApplication ofSafeguard Measures Pursuant tothePrinciples andDisciplines
oftheGATT/WTO" referred tointheresponses toquestions 23,72and73ofWT/ACC/UKR/25.
Thisdocument isnotyetavailable from theWTO Secretariat.
Answer:
AcopyofthePresidential Decree "OntheProcedure forApplication ofSafeguard Measures
Pursuant tothePrinciples andDisciplines oftheGATT/WTO" issenttotheWTO Secretariat.
Question 106
When providing statistical data, please alsoinclude thefigures fortheEC15.
Answer:
Seethegeneral statistical data.