RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/UKR/65
23 July 1999
(99-3113)
Working Party on the
Accession of UkraineOriginal:  English
ACCESSION OF UKRAINE
Memorandum on Trade Relations of Ukraine with CIS Countries
The following information concerning the trade relations of Ukraine with CIS countries has
been received from the Governmental Commission on Ukraine's Accession to WTO.
_______________
1. Conditions which influence the process of regional integration within the Newly Independent
States
The economic integration of the former Soviet Union Republics (or the Newly Independent
States - NIS) is influenced by considerable production and commercial ties which still exist within the
framework of the former single market.
During the first five years, the volume of Ukraine's trade with the former Soviet Union
Republics in energy, ferrous and non-ferrous metals, chemicals, and semi-finished goods necessary
for the production of final products designed for world markets, have remained unchanged.
Free trade and production cooperation between the NIS is developing in the context of an
overall world-wide regionalization and globaliza tion process which brought about the creation of
MERCOSUR, NAFTA, CEFTA, EU and its expansion.  Ukraine takes part in the process of regional
economic integration with the former Soviet Union Republics at bilateral and multilateral levels.
Negotiations on accession to the WTO, which are being conducted by nearly all the NIS, including
Ukraine, require harmonization of provisions of agr eements on regional economic integration with the
requirements of the world trade system.  In a ddition, the Agreement on Partnership and Cooperation
(APC) entered into between the EU and Ukraine, a nd some other NIS, contains provisions aimed at
the elimination of trade preferences granted in breach of WTO principles.
2. Key WTO provisions on regional trade arrangements
Trade in goods and services with some countries may be conducted on conditions which are
more liberal than with other countries due to MFN exemptions, which are provided for regionaleconomic unions by GATT Article XXIV and GATS Ar ticle 5.  Analysis of the international legal
regime existing within the WTO framework, makes it possible to define the following elements of the
international trade agreements which are subject to exemptions from the most favoured nation (MFN)
treatment:
- Free Trade Agreements (FTA) and Customs Unions (CU) or temporary arrangements
designed to reach Regional Economic Integration (REI).  Agreements on production
cooperation may be considered as part of the development of provisions on free trade
of the respective FTA or CU.
- FTA and CU should cover practically all trade in goods (GATT Article XXIV.8) or a
"substantial number of service sectors" (GATS Article 5) between its members.WT/ACC/UKR/65
Page 2
WTO provisions do not provide specifically what criteria should be used to determine
whether the normative requirements are complied with quantitative or qualitative.  At
the same time, however, the international practice of implementation of this norm
shows that free trade agreements are, as a rule, exceptions, with the exception of all
agricultural products and a part of industrial commodities.
- Moderate - not more than 10 years - the term for the application of temporary
agreements designed to create a Free Trade Zone (FTZ) or CU.  The understanding of
the interpretation of GATT Article XXIV provides that such temporary agreements
shall contain a specific schedule of gradual elimination of obstacles for trade between
partners.
- Agreements can be concluded between WTO members (GATT Article XXIV:10).
The practice of applying this criteria shows that exclusions from MFN treatment andfor agreements between members and non-members of the international trade system
were granted by WTO members pursuant to GATT. When Ukraine accedes to the
WTO, preferential agreements between Ukraine and the former Soviet Union
Republics, shall be approved by two thirds of WTO members.  In the process of
Ukraine's accession to the WTO and following this accession, the said agreementsshall be considered by the Working Party on accession. and the Committee on Trade
in Regional Agreements.
3. APC provisions between Ukraine and the EU re garding preferential trade and transit to NIS
Article 10:1 of the APC permits the non-application of MFN treatment with respect to
preferences granted for the purpose of creating a customs union or a free trade zone, or to advantagesarising as a result of this creation.
Under Article 11:2 of APC, Ukraine is obliged to ensure a most favorable regime for the
transit of goods originating in or designed for the EU customs territory with regard to duties,
regulations, and transit procedures.
Article 12 of APC, however, provides for a tr ansitional period for the application of MFN
exemptions and a principle of free transit of goods.  Until 31 December 1998 Ukraine could grant
preferences to Armenia, Belarus, Estonia, Georgia, Kazakhstan, Lithuania, Moldova, and
Turkmenistan with regard to:
- exemption from import duty;
- exemption from import duty of deliveries made under intergovernmental agreements;
- non-application of VAT on import and export goods;
- non-application of excise duty on export.
And to all Newly Independent States with regard to:
- export quotas for delivery of goods under intergovernmental agreements;
- special conditions of transit;
- special customs procedures.WT/ACC/UKR/65
Page 3
The above preference (exemptions from duty or unification of principles on collection of
indirect taxes) are absorbed by free trade agreements, and Ukraine will be able to continue to apply
them.
4. Multilateral agreements on economic integration in CIS
The process of regional economic integration within the CIS advances at different speeds.
For the time being, Ukraine has not acceded to economic or customs unions, as well as to agreements
on their gradual implementation.
(a) Economic Union
The gradual process of economic integration in the CIS is based on the Agreement on
Establishing an Economic Union, signed on 24 September 1993 by the following countries:
Azerbaijan, Belarus, Kazakhstan, Moldova, Russia, Tajikistan and Uzbekistan.  The Agreement
provides for gradual liberalization in the movement of goods, services, capital and individuals.Ukraine and Turkmenistan joined the Economic Union as associated members.  The status of Ukraine
in this Union is to be determined by a separate agreement.
(b) CIS Free Trade Zone
Free Trade Zone (FTZ) is the first step towards an economic union.  On 15 April 1995
Ukraine, together with other CIS members signed an agreement on its creation and temporarilyapplied it, until the adoption of the Constitution in 1996, which established that international
agreements become effective upon their ratification by the Parliament.  For the time being, the FTZ
agreement has been ratified by Moldova, Kazakhstan, Uzbekistan, Kyrgyzstan, Azerbaijan and
Tajikistan.
The agreement is designed to remove the obstacles to the free movement of goods and
services, coordinate economic policy, promote inter-sectoral and intra-sectoral cooperation and
scientific and technical development, and promote harmonization of the legislation of FTZ members.
The agreement also envisions the adoption of a list of exemptions from the free trade regime, as well
as methods and schedules for their step-by step removal during the transition period.  It also provides
for:
- Gradual harmonization of the rules for technical regulation of trade;
- Unification of customs procedures;
- Ensuring national treatment in domestic taxation;
- Regulation of customs duties and other payments;
- Compliance with the principle of free transit;
- Prevention of non-sanctioned re-export of goods;
- Promotion of production cooperation and scientific and technical cooperation on the
intergovernmental (sectoral and regional) levels;
- Gradual creation of the terms for the free rendering of services;
- Exchange of information concerning internal legal regulations.WT/ACC/UKR/65
Page 4
(c) Common Agricultural Market of the CTS
One of the steps towards a FTZ and a customs union in CIS was the signing on 6 March 1998
of the Agreement on Single Agricultural Market (SAM).  This agreement promotes liberalization of
trade in agricultural products and food products, but to scientific and technical products, technologies,
and production means and-services for the Agro-Industrial Complex (AIC).  The parties agreed tocoordinate their pricing policies and harmonize the SPS implementation system, create a single
information system, remove unfair competition and formulate a Regulation on the Terms of SAM's
Creation and Operation, and an Action Plan for 1998-2000.
(d) Ukraine's Trade in CIS within the Framew ork of Production Cooperation Agreement (PCA)
Agreement on the general terms and mechanisms to promote production cooperation between
the companies and industries of the CIS members and a Protocol on the Implementation Mechanism
of 15 April 1994 effective for Belarus, Kazakhstan, Uzbekistan, Russia, Ukraine, Moldova andKyrgyzstan from 10 May 1995.  Laws and regulations on implementation of the Agreement were
signed by all CIS member states.
The agreement provides for the cooperation between companies of all ownership forms,
sectoral and inter-sectoral complexes based on direct production ties, as well as within the framework
of financial and industrial groups, transnational production unions, and joint ventures.  Pursuant toArticle 5, the PCA member states shall not apply import and export duties, quantitative restrictions,
value added tax, and excise duty on goods (except finished goods) supplied under the production
cooperation agreements.
Payment of taxes on turnover of goods and services to be supplied under production
cooperation is postponed.  If a final product is eventually sold in Ukraine, it is subject to value-addedtax and excise duty.
1
5. Bilateral Preferential Trade Agreements concluded by Ukraine
(a) Bilateral Free Trade Agreements
Bilateral free trade agreements (FTA) are to be applied until the multilateral agreement on
free trade zones in CIS becomes effective, and on the issues which are not regulated by thisagreement.  As of 1 January 1999 bilateral free trade agreements are concluded and in force between
Ukraine and almost all CIS states, except Tajikistan.
(i) Basic provisions of bilateral FTA
All of these mentioned agreements contain the following basic provisions:
- Non-application of import duty to goods produced by the exporting country, with
some exceptions.
- Application of value added tax and excise duty at the rates not exceeding the rates
established for similar goods produced domestically by the importing country.
                                                     
1 Procedures for application of taxes on turnover when supplying goods under production cooperation
agreements determined by the "Provision on Application of VAT and Excise on Supplies of Goods and Services underProduction Cooperation Agreements when Making Settlements between Business Entities of the CIS Members" hasbeen adopted by the Council of the CIS members.WT/ACC/UKR/65
Page 5
- Quantitative restrictions on certain imports are to be applied, where necessary, during
a limited period provided that the grounds are presented and bilateral consultations
are held.
Bilateral FTA with Azerbaijan, Armenia, Kyrgyzstan, Moldova and Georgia provide for the
possibility of introducing exemptions for certain commodity groups according to an agreed schedule.
(ii) Free trade regime with exemptions
A free trade regime with exemptions is to be applied in Ukraine's trade with Russia,
Uzbekistan, Latvia, Lithuani a, Belarus and Kazakhstan.
The Protocol to FTA with the Russian Federation (RF) determines the general trend of direct
exemptions from the free trade regime for exports from RF to Ukraine, which are subject to export
duty, as well as to quotas and licensing.  In addition, tariff quotas on imports into the RF of white
sugar originating in Ukraine are' subject to exemptions from the free trade regime.
The number of exemptions from free trade with Uzbekistan is constantly decreasing.
According to the Protocol, Uzbekistan applies quantitative restrictions on the export of non-ferrous
and precious metals, diamonds, amber, crude oil, cotton fibers, and a quantitative restriction on the
import of medical products.
Ukraine applies quantitative restrictions on the export of livestock and sheep, hides thereof,
ores, and scrap of precious and non-ferrous metals, scrap of ferrous metals.  Items of 1-24 group of
Commodity Nomenclature of Foreign Economic Activity (CN FEA) are excluded from the free trade
regime with Latvia.  Certain items from 1-24 group of Commodity Nomenclature of Foreign
Economic Activity (CN FEA) are excluded from the free trade regime with Lithuania.  Ukraine and
Belarus extend exemptions from the free trade regime for goods which are not covered by the Law ofUkraine on export duty for livestock and hides thereof, and on white sugar.
When exporting from Ukraine to Kazakhstan, livestock and raw hides are subject to
exemption from the free trade regime, and when importing - alcoholic beverages, tobacco and its
industrial substitutes.
Exemptions apply to less than 10 per cent of the total volume of the bilateral trade and mostly
offset trade in agricultural products which should be acceptable to the WTO members.
(iii) Collection of indirect taxes
The value added tax in Ukraine (except on goods originating in and imported from the
Russian Federation and Belarus), excise duty and customs duties, when importing goods originating
in the countries with which free trade agreements are concluded, are collected according to general
procedures.
According to the free trade agreements, Ukraine does not apply export duty to goods
originating in Ukraine which are exported and designed for countries with the above free trade
agreements (except export of items of 1-24 group of CN FEA to Latvia).WT/ACC/UKR/65
Page 6
(iv) Non-tariff restrictions of trade
Quotas and licensing of exports to Ukraine is  in practice applied by Azerbaijan, Armenia,
Georgia, Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan.  Quota and licensing of imports
from Ukraine are applied in breach of the respective FTAs by all CIS member states except Belarus
and Moldova.  The majority of existing quotas and licensing should be eliminated and brought inconformity with the free trade requirements.
(v) Free trade with Baltic states
Free trade regime exists with all three Baltic states.  Quantitative restrictions on exports to
and imports from Ukraine only applied by Latvia (quantitative restrictions on import of agricultural
products according to the exemptions from FTA).  Export duty and indirect taxes are not applied to
exports into Ukraine in full compliance with the principle of origin.  Ukraine, in its turn, does not
apply quantitative restrictions and import duties on goods originating in Lithuania, Latvia and Estonia.Indirect taxes are levied in the country where goods are consumed.
(b) Bilateral agreement on production cooperation
Ukraine has concluded bilateral FTAs with Azerbaijan, Georgia, Turkmenistan, Uzbekistan,
Russia, Kazakhstan and Kyrgyzstan.  They contai n annually approved lists of goods which are
supplied under production cooperation agreements and fall within the scope of the preferential traderegimes.
Preferential treatment for temporary imported goods and services for processing facilitates
trade and does not directly contradict the requirements of the WTO and specifically GATS, if a permit
is obtained from trading partners in particular.  Importers of goods from the CIS obtain certain
preferences in customs procedures and in the payment of taxes on turnover in comparison withordinary imports of give-and-take raw materials (t oll processing) and semi-finished products.. Supply
treatment in respect of finished goods under production cooperation for its further sale in Ukraine
does not differ from the supply of ordinary finished goods.
Such "production cooperation agreements" do not directly fall within the exemptions
provided for in the relevant GATT provisions.  At the same time, their nature and availability of the
norms on mutual liberalization in certain sectors allows them to be characterized as an advanced
industry-wide free trade regime.  FTAs provide for the removal of tariffs and quantitative restrictions
on trade.  FTAs are horizontal since they are applied to all commodity groups while being applied
only to goods supplied according to special types of contracts.  Since agreements on production
cooperation are concluded in the development of the CIS FTZ Agreement, they can be considered as
establishing a specific treatment for free trade by making foreign trade regime within the CIS more
meaningful.
6. Conditions for the Application of Free Trade Regime with CIS and Baltic States
(a) Azerbaijan
Pursuant to Article I of Free Trade Agreement between Ukraine and Azerbaijan (effective
2 September 1996) "The Contracting Parties shall not levy customs duties, taxes and charges having
equivalent effect on exports and/or imports of goods, originating from the customs territory of one ofthe Contracting Parties and intended for the customs territory of the other Contracting Party."
Goods originating in Ukraine are subject to im port duty at 15 per cent rate in Azerbaijan.
Goods designed for the customs territory of Ukraine and originating in Azerbaijan are not subject to
import duty if:WT/ACC/UKR/65
Page 7
- the origin of goods is confirmed by way of submitting the appropriate certificate (CT-
1 form);
- a rule of "direct purchase" is followed; and
- the rule of "direct shipment" is followed.
The country of the origin of goods is to be determined on the basis of the Rules for
Determining the Country of Origin adopted by the Resolution of the Council of Heads of
Governments of the Commonwealth of Independent States of 24 September 1993.
(b) Belarus
Pursuant to Article I of the Free Trade Agreement between Ukraine and the Belarus (effective
17 December 1992), "the Parties shall not apply duties, taxes and charges having equivalent effect on
export and/or import of products originating in the customs territory of either party and intended for
the customs territory of the other Party".  Goods designed for the customs territory of Ukraine andoriginating in Belarus are not subject to import duty if :
- the origin of the goods is confirmed by way of submitting the appropriate certificate
(form CT-1);
- a rule of "direct purchase" is followed; and
- a rule of "direct shipment" is followed.The country of origin of goods is to be determined on the basis of the Rules for Determining
the Country of Origin adopted by the Resolution of  the Council of the Heads of the Governments of
the Commonwealth of Independent States, of 24 December 1993.
(c) Armenia
Pursuant to Article I of the Free Trade Agreement between Ukraine and the Armenia
(effective 19 December 1996), "the Parties shall not apply duties, taxes and charges having equivalent
effect on export and/or import of goods originating from the customs territory of one Party and
intended for the customs territory of the other Party".  Goods designed for the customs territory of
Ukraine and originating in Armenia are not subject to import duty if :
- the origin of the goods is confirmed by way of submitting the appropriate certificate
(form CT-1);
- a rule of "direct purchase" is followed; and
- a rule of "direct shipment" is followed.
The country of origin of goods is to be determined on the basis of the Rules for Determining
the Country of Origin adopted by the Resolution of the Council of Heads of Governments of the
Commonwealth of Independent States, of 24 September 1993.
(d) Georgia
Pursuant to Article I of the Free Trade Agreement between Ukraine and Georgia (effective
5 December 1996), "the Contracting Parties shall not introduce customs duties, and/or import duties,
and taxes and fees having equivalent effect on the products originating in the customs territory ofWT/ACC/UKR/65
Page 8
either Contracting Party and designed for the customs territory of the other Contracting Party".  Goods
designed for the customs territory of Ukraine and originating in Republic of Georgia are not subject to
import duty if :
- the origin of goods is confirmed by way of submitting the appropriate certificate
(form CT-1);
- a rule of "direct purchase" is followed;
- a rule of "direct shipment" is followed.
The country of origin of goods is to be determined on the basis of the Rules for Determining
the  Country of Origin adopted by the Resolution of the Council of Heads of Governments of the
Commonwealth of Independent States of 24 September 1993.
(e) Moldova
Pursuant to Article 2 of the Free Trade Agreement between Ukraine and Moldova (effective
27 May 1996), "the Contracting Parties do not apply customs duties, taxes and fees having an
equivalent effect on export and/or import of goods originating from the customs territory of one of the
Contracting Parties and intended for the customs territory of the other Contracting Party".  Goods
designed for the customs territory of Ukraine and originating in Moldova are not subject to import
duty if :
- the origin of goods is confirmed by way of submitting the appropriate certificate
(form CT-1);
- the purchase of goods is made by a reside nt of one of the members of the Agreement
on Creation of the Free Trade Zone.
Countries which signed the Agreement on the Creation of a Free Trade Zone include:
Azerbaijan, Belarus, Armenia, Georgia, Kazakhst an, Kyrgyzstan, Moldova, the Russian Federation,
Tajikistan, Turkmenistan, Uzbekistan, and Ukraine.
The country of origin of goods is to be determined on the basis of the Rules for Determining
the Country of Origin adopted by the Resolution of  the Council of the Heads of the Governments of
the Commonwealth of Independent States of 24 September 1993, (subject to the Resolution of theCouncil of the Heads of Governments of the Comm onwealth of Independent States on amendments to
paras. 9 and 10 of the Rules of 15 April 1994).
(f) Russian Federation
Pursuant to Article I of the Free Trade Agreement between Ukraine and the Russian
Federation (effective 29 March 1994), "the Contracting Parties shall not impose customs duties, taxes
and charges having equivalent effect on export and/or import of products originating in the customs
territory of either Contracting Party and designed for the customs territory of the other ContractingParty".  Goods designed for the customs territory of Ukraine and originating in the Russian Federation
are not subject to import duty if :
- the origin of goods is confirmed by way of submitting the appropriate certificate
(form CT-1);
- a rule of "direct purchase" is followed; andWT/ACC/UKR/65
Page 9
- a rule of "direct shipment" is followed.
According to the Protocol of Negotiations between governmental delegations of Ukraine and
the Russian Federation which met in Moscow on  11 – 12 December 1997, the Parties agreed not to
levy taxes,  starting from 1 February 1998, on imports originating in the customs territory of the other
party into the customs territory of either party.
On 5 January 1998 a Resolution of the Cabinet of Ministers of Ukraine No.13 "On
Implementation of the Free Trade Agreement between the Government of Ukraine and the
Government of Russian Federation" was signed.
A similar normative act on the Russian part - an Edict of the President of 31 December 1997,
No. 1392 "On Recognizing the Edict of the President of the Russian Federation of 18 August 1996,
No.1216 "On Imposition of the Value Added Tax on Goods Originating in the Territory of Ukraine
which are Imported into the Customs Territory of the Russian Federation," as null and void."
White sugar is exempted from the free trade regime in trade with the Russian Federation, and
instead a duty is introduced at 25 per cent rate - by Government Resolution No.417. Resolution
No.783 introduced a temporary special duty for white sugar at a 20 per cent rate.  Resolution No.782
introduced licensing of imported raw sugar, white sugar, starch syrup, while Government Resolution
No. 791 introduced an additional 3 per cent import duty on goods imported into the customs territoryof the Russian Federation, except for goods originating in the territories of the members of the
Agreement on Customs Union to which Ukraine is not a party.
The country of origin of goods is to be determined on the basis of the Rules for Determining
the Country of Origin adopted by the Resolution of  the Council of the Heads of the Governments of
the Commonwealth of Independent States of 24 September 1993.
(g) Turkmenistan
Pursuant to Article I of the Free Trade Agreement between Ukraine and Turkmenistan
(effective 6 March 1996), "the Contracting Parties shall not levy customs duties, taxes and charges
having equivalent effect on exports and/or imports of goods, originating from the customs territory of
one of the Contracting Parties and intended for the customs territory of the other Contracting Party".Goods designed for the customs territory of Ukraine and originating in Turkmenistan are not subject
to import duty if :
- the origin of goods is confirmed by way of submitting the appropriate certificate
(form CT-1);
- a rule of "direct purchase" is followed; and
- a rule of "direct shipment" is followed.
The country of origin of goods is to be determined on the basis of the Rules for Determining
the Country of Origin adopted by the Resolution of the Council of Heads of Governments of the
Commonwealth of Independent States of 24 September 1993.
(h) Uzbekistan
Pursuant to Article 1 of the Free Trade Agreement between Ukraine and Uzbekistan (effective
1 January 1996), "the Parties to the Agreement do not apply customs duties, taxes and collectionswhich are of equivalent force and also quantitative limitations for export and/or import of goods
originating from the customs territory of one of the Parties to the Agreement and intended for customsWT/ACC/UKR/65
Page 10
territory of another Party to the Agreement".  Goods designed for the customs territory of Ukraine and
originating in Uzbekistan are not subject to import duty if :
- the origin of goods is confirmed by way of submitting the appropriate certificate
(form CT-1);
- a rule of "direct purchase" is followed; and- a rule of "direct shipment" is followed.
The country of origin of goods is to be determined on the basis of the Rules for Determining
the Country of Origin adopted by the Resolution of the Council of Heads of Governments of the
Commonwealth of Independent States of 24 September 1993.
The Protocol on Exemptions from the Free Trade Regime to the Free Trade Agreement
between Ukraine and Uzbekistan of 29 December  1994, establishes a list of goods to which
quantitative restrictions (quotas and licensing) are applied.  The Protocol does not impose restrictionson the application of tariff preferences in the form of exemption from payment of import and export
duties in trade between Ukraine and Uzbekistan.
(i) Estonia
Exemption from duty is applied pursuant to Articles 5 and 6 of the Free Trade Agreement
between Ukraine and Estonia (effective 14 March  1996):
Article 5
Prohibition and Abolition of Customs Duties on Im ports and Charges Having Equivalent Effect
1. No new customs duties on imports or charge having equivalent effect shall be introduced in
trade between the Parties.
2. Customs duties on imports and charges having equivalent effect shall be abolished
upon the date of entry into force of this Agreement.
3. The provisions of this Article shall also apply to customs duties of a fiscal nature.
The Parties may replace a customs duty with an internal tax.
Article 6
Prohibition and Abolition of Customs Duties on E xports and Charges Having Equivalent Effect
1. No new customs duties on exports or charges having equivalent effect shall be introduced in
trade between the Parties.
2. Customs duties on exports and charges having equivalent effect shall be abolished upon the
entry into force of this Agreement".
Goods originating in Estonia designed for the customs territory of Ukraine are exempt from
import duty if :
- the origin of the goods is confirmed by way of submitting a "movement certificate"
form EUR.1 (Supplement III to the Protocol  A to the Free Trade Agreement between
Ukraine and Estonian Republic), or form EU R 2 (Supplement IV to the Protocol A toWT/ACC/UKR/65
Page 11
the Free Trade Agreement between Ukraine and Estonia), while shipment certificate
is also accepted if the cost of goods does not exceed ECU 3000 per one shipment;
- a rule of "direct transportation" is followed (Article 14 of the Protocol A to the Free
Trade Agreement between Ukraine and Estonia).
The country of origin of goods is to be determined pursuant to Protocol A of the Free Trade
Agreement.
(j) Latvia
Exemption from duty is applied pursuant to Articles 7 and 8 of the Free Trade Agreement
between Ukraine and Latvia (effective since 15 January 1997):
Article 7
Prohibition and Abolition of Customs Duties on Im ports and Charges Having Equivalent Effect
1. No new customs duties on imports or charge having equivalent effect shall be introduced in
trade between the Parties.
2. Ukraine shall abolish, on the date of entry into force of this Agreement, all customs duties on
imports and any charges having equivalent effect on products originating in Latvia.
3. Latvia shall abolish, on the date of entry into force of this Agreement, all customs duties on
imports and any charges having equivalent effect on products originating in Ukraine.
4. The provisions of this Article shall also apply to customs duties of a fiscal nature.
Article 8
Prohibition and Abolition of Customs Duties on E xports and Charges Having Equivalent Effect
1. No new customs duties on exports or charges having equivalent effect shall be introduced in
trade between the Parties.
2. Customs duties on exports and charges having equivalent effect shall be abolished upon the
entry into force of this Agreement, except products specified in Annex I."
This agreement applies to goods covered by commodity groups 25 to 97 of the Harmonized
System for Description and Coding of Goods originating in Ukraine or Latvia (Article 3 of theAgreement).
Goods originating in Latvia (except goods in groups I to 24 of the Harmonized System for
Description and Coding of Goods) designed for th e customs territory of Ukraine are exempted from
import duty if:
- the origin of goods is confirmed by way of submitting a "shipment certificate" - form
EUR.1 (Supplement III to the Protocol A to the Free Trade Agreement between
Ukraine and Latvia), or form EUR 2 (Supplement IV to the Protocol A to the FreeTrade Agreement between Ukraine and Latvia).  In such a case, the shipmentWT/ACC/UKR/65
Page 12
certificate is also accepted if the cost of goods does not exceed ECU 3000 per one
shipment; and
- a rule of "direct transportation" is followed (Article 14 of the Protocol A of the Free
Trade Agreement between Ukraine and Latvia).
The country of origin of goods is to be determined pursuant to Protocol A of the Free Trade
Agreement between Ukraine and Latvia.
(k) Lithuania
Pursuant to Article 2 of Free Trade Agreement between Ukraine and Lithuania (effective
21 November 1995) "The Parties shall not apply duties, taxes and charges having equivalent effect on
export and/or import of goods originating from the customs territory of one of the Contracting Party
and intended for the customs territory of the other Contracting Party."
Goods, except the goods listed in the Protocol on Exemptions from the Free Trade Regime to
the Free Trade Agreement between Ukraine and Lithuania, designed for the customs territory of
Ukraine and originating in Lithuania are not subject to import duty if
- the origin of goods is confirmed by way of submitting the appropriate certificate of form
EUR. 1;
- a rule of "direct purchase" is followed; and- a rule of "direct shipment" is followed.
The country of origin of goods is to be determined according to the Supplement to the Free
Trade Agreement between Ukraine and Lithuania.
(l) Kyrgyz Republic
Pursuant to Article I of Free Trade Agreem ent between Ukraine and the Kyrgyz Republic
(effective 18 December 1996), "the Contracting Parties shall not levy customs duties, taxes and
charges having equivalent effect on exports and/or imports of goods, originating from the customs
territory of one of the Contracting Parties and intended for the customs territory of the other
Contracting Party."
(m) Kazakhstan
Pursuant to Article I of the Free Trade Agreement between Ukraine and Kazakhstan (effective
19 October 1998), "the Parties shall not introduce customs duties, taxes and fees having an equivalent
effect on the export or import of products originating in the customs territory of either Party and
designed for the customs territory of the other Party."
When exporting from Ukraine to Kazakhstan, livestock and raw hides are subject to
exemption from the free trade regime, and when importing - alcoholic beverages, tobacco and
substitutes thereof.
(n) Tajikistan
There is practically no legal base available.WT/ACC/UKR/65
Page 13
7. Origin of goods confirmation
(a) CIS states
Pursuant to the Rules for Determining the Country of Origin adopted by the Resolution of the
Council of the Heads of the Governments of  the Commonwealth of Independent States of
24 September 1993, in order to confirm the origin of goods in a CIS member state, a declaration-certificate of the origin of goods of CT-1 form (a sample is attached) should be presented to the
customs bodies of Ukraine.  If a CT-1 certificate is not available, during the customs clearance of
goods originating in a CIS state with which a bilateral free trade agreement exists then the country of
origin can be determined on the basis of the labels of the goods accompanying forms or other
documents for the goods, and preferential rates of import duties apply (as well as value added tax on
goods originating in and imported from the Russian Federation and Belarus).
If it is impossible to determine the country of origin, full import duty applies (as well as the
value added tax on goods originating in and imported from the Russian Federation and Belarus).
2
(b) Baltic States
Confirmation of the country of origin for goods originating in the Baltic states is based on
bilateral free trade agreements between Ukraine and Estonia, Latvia and Lithuania by way of
presenting a movement certificate in the form of  EUR-1 or EUR-2 (for goods from Lithuania - only a
movement certificate; form EUR-1).
If a movement certificate of the form EUR-1 or EUR-2 from the specified countries is not
available, then the country of origin can be determined on the basis of labeling goods or
accompanying forms or other documents, and preferential import duty rates apply.  If it is impossible
to determine the country of origin of goods, full import duty rates are applied.3
                                                     
2If during a year an entity of CN FEA presents to the customs bodies of Ukraine an original copy (or
officially certified copy (duplicate) of certificate of origin of goods CT-1 of the specified country, pursuant to para. 21of the Rules for Determining the Country of Origin adopted by the Resolution of the Council of Heads ofGovernments of the Commonwealth of Independent States of 24 September 1993, then during a year from the
customs clearance of goods it may be:
- Renewed, provided that the rules on "direct purchase" and "direct shipment" are fulfilled (with Moldova -
provided that the rule on "purchase of goods by resident of one country-member of the Free TradeAgreement"), and a free trade regime exists with return of the amounts of import duty paid;
- Renewed MFN treatment, with partial return of the amounts (a difference between the amount of import duty
paid at the full rate and the amount of import duty to be paid at preferential rate of import duty) - in case offailure to fulfil the rule of "direct purchase" and "direct shipment".
3 If an entity of CN FEA presents to the customs bodies of Ukraine a certificate (or its duplicate) of origin of
goods from Estonia or Latvia, within the valid term of the certificate during 4 months from the date of its issue then:- a free trade regime may be renewed (if the rule on "direct transportation" is met) - with return of amounts of
import duty paid,
- MFN treatment may be renewed with partial return of the said amounts (a difference between the amount of
import duty paid at the full rate and the amount of import duty to
- be paid at a preferential rate of import duty) - in case of failure to fulfil the rule of "direct purchase" and
"direct transportation".
Pursuant to Article 22 of Protocol A of the Free Trade Agreement between Ukraine and the Estonian
Republic and Article 22 A of Free Trade Agreement between Ukraine and the Latvian Republic, the certificate oforigin (or its duplicate) can be accepted by the customs bodies of Ukraine for the purpose of application of the free
trade regime or a most favoured nation treatment during one year from the date of the customs clearance in case:
- Delay in presenting a certificate before an established deadline is caused by force majeure or extraordinary
circumstances.  In such a case, force, majeure and extraordinary circumstances include those which arecaused due to circumstances which are beyond one's will (wars, calamities, fire,, epidemics etc.) and whichcaused delay in presenting the certificate.WT/ACC/UKR/65
Page 14
8. Application of the rules "direct purchase" an d "direct shipment" ("direct transportation")
(a) "Direct purchase" - is the purchasing of goods directly from the enterprise or incorporated
firm in due order in the exporting country.
The rule on "direct purchase" is not fulfilled in the case when goods are purchased in the
exporting country from a representative of a firm or enterprise which is not a resident of a country.
To be eligible for exemption from import duty payment (as well as value added tax on goods
originating in and imported from the Russian Federation and Belarus) a country with which a free
trade agreement is signed should act as a trading country.
During the customs clearance of goods originating from Moldova, the rule of "direct
purchase" is fulfilled in cases of purchasing goods originating in Moldova by a resident of one of thecountries participating in the agreement on creating ,a free trade zone.
(b) "Direct shipment" ("direct transportation") is a direct movement of goods from the exporting
country to the importing country.  In such a case movement of goods is allowed through the territory
of one or several countries as a result of geographical, transportation, technical and economic reasonsand their temporary entry or storage on the territory of these countries, provided that these goods
remain under the customs control of transit countries.
                                                                                                                                                                    
In all other cases paid amounts of import duty on goods or iginating in Estonia or La tvia will not be returned.
If an entity of CN FEA presents to the customs bodies of Ukraine a certificate (or its duplicate) of origin of
goods from Estonia or Latvia, within the valid term of the certificate during four months from the date of its issuethen:- A free trade regime may be renewed (if the rule on "direct transportation is met) - with return of the amounts
of import duty paid,
- MFN treatment may be renewed with a partial return of the said amounts (a difference between the amount
of import duty paid at the full rate and the amount of import duty to be paid at a preferential rate of importduty) - in case of failure to fulfil the rule of "direct purchase" and "direct transportation".
- Pursuant to Art. 19 of the Supplement to the Free Trade Agreement between Ukraine and Lithuania on the
rules for determining the country of origin of goods, a movement certificate (or its duplicate) may beaccepted in extraordinary circ umstances by the customs bodies of Ukra ine for the purpose of application of
the free trade regime or national treatment within one year from the date of the customs clearance (within the
validity of a movement certificate).  In such a case, extraordinary circumstances include those which werecaused by circumstances which are beyond one's will (wars, calamities, fire, epidemics etc.) and whichcaused delay in presenting the certificate.WT/ACC/UKR/65
Page 15
1.  Exporter (name and postal address)
2.  Consignee (name and postal address)4.  No._____________________
         Certificate of origin of goods
                         CT-1 form
Issued in ________________
                  (name of country)
date of submission to  _________________
                                      (name of a country)
3.  Means of transportation and itinerary     (as far    as known)4.  For official marks
6.  No. 7.  Number of
items and type of
packaging8.  Description of
goods9.  Weight
gross/net (kg)10.  Invoice
number and date
11.  CertificationHereby certify that the applicant's declaration is
true.
Signature              Date                  Stamp12.  Applicant Declaration
The undersigned hereby declare that
information indicated above is true; that all
goods completely produced or undergo
substantial processing in
_____________________________
(name of country)and that they are in line with requirements of
origin, in force with regard to such goods.
Signature             Date                 Stamp
__________