RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/UKR/62/Add.2
24 February 2000
(00-0690)
Working Party on the
Accession of UkraineOriginal:  English
ACCESSION OF UKRAINE
Replies to the Additional Questions posed to the Memorandum on
Agricultural Trade Policy of Ukraine
Addendum
The following information has been received from the Governmental Commission on
Ukraine's Accession to WTO.
_______________
Question 1.
Please provide the Working Party with an updates on the implementation of the transfer of
shares program. To what extent has this been completed?
Reply:
We are not certain what is meant by this question.
We assume, hopefully correctly, that it refers to the privatization of agricultural entities. As
stipulated in the Memorandum of Economic Policy for the Period from 1 July 1998 to 30 June 2001,
adopted by the Cabinet of Ministers of Ukraine, the National Bank of Ukraine and the International
Monetary Fund1, four hundred forty-three grain processing plants have already been privatized with
private placement of more than 70 per cent. Total amount of grain processing plants in Ukraine is 543.100 plants are still held by the State Stock Company “Khlib Ukrainy” which also is in the process of
an ownership transformation.
2
Question 2.
How are agricultural subsidies provided in Ukraine?
                                                     
1 As a matter of information, the Supreme Rada passed a resolution stating that the National
Bank and the Cabinet of Ministers exceeded their powers in adopting the Memorandum. The Rada furtheralleged that these bodies had no right to undertake many of the obligations stipulated in the Memorandum. Thus,
according to the Rada, the National Bank and the Cabinet of Ministers violated the Constitution of Ukraine
(Article 85), as the Constitution provides that it is the sole prerogative of the Rada to determine the fundamental
directions of Ukraine's foreign policy. The Rada demanded that the Memorandum be amended immediately(See Resolution of the Supreme Rada "On the Memorandum of Economic Policy for the Period from 1 July1998 to 30 June 2001, adopted by the Cabinet of Ministers of Ukraine and the National Bank of Ukraine,"No.565-XIV, of 26 March 1999). However, the Rada did not specify what amendments are required.
2 Detailed information concerning privatization has been circulated in documents
WT/ACC/UKR/72 and WT/ACC/UKR/72/Add.1.WT/ACC/UKR/62/Add.2
Page 2
Reply:
See reply to Question 9.
Question 3.
When are they paid (end of year? end of sowing season? at the start of year as a credit or as a
loan?)? If the latter, what levels of interest are applied?
Reply:
See reply to Question 9.
Question 4.
Which Ukrainian banks (if any) are involved in the disbursement of Government subsidies?
Reply:
See reply to Question 9.
Question 5.
Which Ukrainian Government agency is responsible  for the provision of subsidies to the regions
of Ukraine?
Reply:
See reply to Question 9.
Question 6.
Which Ukrainian Government organization determ ines where the subsidies should be directed?
Reply:
See reply to Question 9.
Question 7.
What is the criteria used to determine which enterprise should be subsidized?
Reply:
See reply to Question 9.
Question 8.
What mechanism is in place to track the delivery  of subsidies to ensure that hey are received by
the designated recipient?WT/ACC/UKR/62/Add.2
Page 3
Reply:
See reply to Question 9.
Question 9.
How is inflation factored into subsidy payments?
Reply:
The state budget provides some funds for the support of agriculture (such support was
envisaged in the amount of 104 mln. hryvnas for 1999). In reality, due to a chronic annual budget
deficit no agricultural subsidies are disbursed in Uk raine. There is not even a mechanism in existence
to disburse subsidies. The only way the Government becomes involved in agricultural production is
through the distribution of fuel, lubricants, seeds and fertilizers supplied from the State Reserves.
These supplies are distributed from the state reserves, and they must be paid for. The amount
budgeted for this purpose in 1999 was 4.7 billion hryvnas. Invoices are submitted with respect to
them, and claims are made for the payment of the invoices. In some cases, where the respective farmshave funds, the payments are made in cash or in kind. Most of the agricultural enterprises (about 86
per cent) are unable to pay. Lacking liquidity, they are not able to pay wages (more than 2 billion
hryvnas in wage arrears), and they certainly cannot pay for the supplies they receive from  the
government. The state, to the extent the supplies are available, continues to distribute them in order to
prevent people literally from starving.
Due to a total lack of funds, exacerbated by a generally poor economic situation, farms are
not in a position to meet any of their debts. There is no question of agricultural enterprises being
subsidized. The government  has serious budget constraints.  Consequently it is unable to provide
financial resources for agriculture either on a central or a local level. The government, as it has beenextensively documented, is not in a position to alleviate the impecunious condition of agriculture
beyond the supplies mentioned above. And even for such supplies it expects to be reimbursed.
Current conditions prevent the development of an effective production system for the
agricultural sector of the economy. To bring about a change in the agricultural sector, it will have to
be extensively recapitalized, but this will be impossible without massive outside help.
About 1,400 private farms reported to exist in Ukraine are supposed to operate successfully
without any aid. On 3 December 1999, the President issued a decree ordering the breaking up of the
collective farms and dividing the property among individual farmers. The decree requires the process
to be completed by 2000.
Question 10.
How does Ukraine propose to list  the kinds of support mechanism it details in the
memorandum in its AMS tables?
Reply:
AMS tables have been circulated in document WT/ACC/SPEC/UKR/1/Add.4.
Question 11.
What is the criteria used to write off debt?WT/ACC/UKR/62/Add.2
Page 4
Reply:
According to the Decree of the President "On the Writing Off and Restructuring of Tax Debts
of Agricultural Enterprises and Sugar Plants, Which are Taxpayers as of January 1, 1998," No.651, of
June 18, 1998, all agricultural enterprises are eligible for the write-off of fines for overdue taxpayments. The enterprises also have the right to request the restructuring of their tax debts.
As mentioned in the answer to question 9, most agricultural enterprises are heavily indebted. They are
not in a position to satisfy their financial commitments, and their solvency is in question. Write-offs
take place for bad debts due for long periods of time. Write-offs also occur in mergers and
restructuring situations.
Question 12.
How is inflation factored into tax write-off calculations?
Reply:
Inflation is not taken into account in tax write-off calculations
Question 13.
What is this “experimental tax” referred to in the Memorandum?
Reply:
The essence of the experimental (or fixed) tax lies in the simplification and transparency of
tax payment procedures and bookkeeping requirements for agricultural enterprises (one fixed paymentinstead of numerous taxes, e.g. income tax, social security, land tax and so on).
Secondly, it is considered (and already confirmed in practice) that the use of simplified tax
will increase the amount of taxes collected despite the new fixed tax rate being lower than the rates of
the former taxes. In other words, there is a simple explanation for the "experimental tax": its purpose
is to simplify the tax regime which, in turn, is expected to increase revenues.
Question 14.
What precisely are the ‘climatic and historic conditions’ referred to in WT/ACC/UKR/62/Add 1
which exempt Starobeshevsky and Uzhhorod regions from VAT?
Reply:
First of all it should be pointed out that th e Law "On the Experimental Introduction of the
Single Fixed Agricultural Tax," No.25, of 15 January 1998 is not operative. A new law (the Law "On
a Fixed Agricultural Tax," No.320-XIV, of 17 December 1998) effectively replaces it3. The fixed
agricultural rate, described in the answer to question 13, is extended to the whole territory of Ukraine.
The purpose of the experiment was to determine the functionality of the new method in different
regions of the country. Selected regions of Ukraine have completely different climates, soil and
agricultural practices. There are variations in different regions, and in the regions selected for the
experiment they differ quite extensively from the ret of the country.
                                                     
3 See answers to Questions 13 and 15 for further details.WT/ACC/UKR/62/Add.2
Page 5
There were no climatic reasons for exempting Starobeshevsky and Uzhhorod Regions from
VAT. It was simply decided to experiment in both  areas with the inclusion of VAT within the scope
of the fixed tax in the one region and to exclude it in the other. Later on it was decided to exclude
VAT from the list of taxes covered by the fixed agricultural tax. Consequently, the Law "On a Fixed
Agricultural Tax," No.320-XIV, of 17 December 1998, which is currently in effect, provides that thefixed agricultural tax does not include VAT.
Question 15.
How were the rates of tax calculated (e.g.why 79.48 hryvna or 338 kgs of soft wheat…)? Please
provide details of the formula used to develop these taxation rates.
Reply:
The fixed tax rate (FTR) is calculated as a percentage (K) of the land value (LV). The land
value is determined in accordance with a special procedure adopted by the Cabinet of Ministers. The
value varies depending on the terrain and the agricultural quality of land. The rates also vary fromregion to region for the same reason. Considering that there is no private ownership of the land used
for agricultural production, the reason for the use of the above procedures as a method for the
demonstration of land values becomes obvious.
The formula is as follows:FTR = K x LV
Fixed tax can be paid either in cash or in kind. The quantity of wheat mentioned in the
Memorandum on the Agricultural Trade Policy of Uk raine (338 kgs) corresponds to the fixed tax due
when it is paid in monetary form.
Question 16.
The Memorandum states that “In general, Ukra ine used foreign loans for total amount 379.2
million…”. Who used these foreign loans? Is that  a reference to farmers, the collectives or the
regional governments?
Reply:
The foreign loans mentioned in the Memorandum were provided to various Ukrainian
companies and guaranteed by the government. The companies supplied agricultural sector enterpriseswith products (machinery, fertilizers, etc.) purchased with the funds they had borrowed through
banks.
Question 17.
What is the value of the assistance to poultry and pork farms?
Reply:
The use of the term “assistance” is not clear.
If it refers to direct subsidies (availability of funds, supply of goods or services free of charge,
etc.), then the answer is that there is no such assistance.WT/ACC/UKR/62/Add.2
Page 6
Question 18.
What are the conditions on the loan? When does the loan have to be paid back/how?
Reply:
The loans were repayable from profits derived from the sales of poultry and pork products.
There were no express provisions for the methods and conditions of payment. Interest was not
specified in any of the loan arrangements. Records of payments are not available.
The situation of farms growing poultry and pork became seriously critical in 1997. To prevent
such farms from completely closing down the Cabinet of Ministers resolved on 29 December 1997, togrant loans to about four hundred and ten farms, selected by the Ministry of Agro-Industrial Complex
together with local regional governments, amountin g in total to about US $30 million. These loans
were required to be repaid prior to 1 December 1998. There were no specific criteria for the loans.
They were granted simply to prevent mass insolvency which would aggravate even further the living
conditions of rural population. The loans had no effect on population, and did not prevent furtherdepletion of existing poultry and pork stocks.
Question 19.
Can Ukraine advise which pieces of legislation referred to in the Memorandum have actually
been implemented and which have not?
Reply:
The following normative acts are in effect:
- The Land Code as amended by the Law "On the Introduction of Changes and
Additions to the Land Code of Ukraine," No.2196-XII, of 13 March 1992.
- The Resolution of the Supreme Rada of Ukraine "On the Acceleration of Land
Reform and Land Privatization," No.2200-XII, of 13 March 1992.
- The Law "On Ownership," No.697-12, of 7 February 1991.
- The Law "On Types of Ownership of Land," No.2073-12, of 30 January 1992.- The Resolution of the Cabinet of Ministers "On the Privatization of Land Plots,"
No.15, of 26 December 1992.
- The Decree of the President of Ukraine "On the Urgent Measures on the Acceleration
of Land Reform in the Field of Agricultural Production," No.666, of 10 November
1994.
- The Law "On Peculiarities of Property Privatization in the Agro-Industrial Complex,"
No.290-96, of 10 July 1996, as amended.
- The Law "On State Property Privatization," No.2163, of 4 March 1992.
- The Decree of the Cabinet of Ministers "On the List of Property Complexes of State-
Owned -Enterprises, Organiza tions and Their Structural Units of the Main Production
for Which Privatization and Transfer into Lease is not Permitted," No26-92, of 31
December 1992 (with substantial amendments).
- A Resolution of the Supreme Rada of Ukraine "On Changes and Amendments to the
List of Objects not Subject to Privatization Because of their All-State Importance,"
No.542/96 – VR, of 22 November 1996.
- The Law "On Changes to the List of Property Complexes of State-Owned
Enterprises, Organizations and their Structural Units of the Main Production for
which Privatization is not Permitted," No.537/97-VR, of 23 September 1997.WT/ACC/UKR/62/Add.2
Page 7
- The Resolution of the Cabinet of Ministers of Ukraine "On the Acceleration of
Privatization  of the Grain Procurement Enterprises," No.1218, of 5 November 1997.
- The Law "On the Fixed Agricultural Tax," No.320-XIV, of 17 December 1998.
- The Resolution of the Cabinet of Ministers "On the Establishing of the State Joint
Stock Company "Khlib Ukrainy," No.1000, of 22 August 1996.
- A protocol decision of the Cabinet of  Ministers of Ukraine No.14, of 23 May 1997.
- The Decree of the President of Ukraine "On Measures for State Support of
Agricultural Production," No.215 of 23 March 1998.
- The Law No.770, of 29 December 1997.
- The Resolution of the Cabinet of Ministers of Ukraine "On the Introduction of
Amendments and Additions to the Resolution of the Cabinet of Ministers of Ukraine,
No.977, of 3 September 1997," No.84, of 24 January 1998.
- The Law "On Value Added Tax," No.168, of 3 April 1997, as amended4.
- The Resolution of the Cabinet of Ministers "On Establishing the Interdepartmental
Committee on Issues of Regulation of Food-Stuffs Market, Prices and Income of
Agricultural Goods Producers," No.1026, of 6 July 1997, as amended.
- The Decree of the President of Ukraine "On the Main Directions of the Ukrainian
Agro-Industrial Complex Development," No.389, of 29 April 1998.
- The Resolution of the Cabinet of Ministers "On Peculiarities of Carrying out
Restoration (Sanation) of the Agro-Industrial Complex Enterprises," No.922, of 16
June 1998, as amended by Resolution of the Cabinet of Ministers "On Amending
Certain Resolutions of the Cabinet of Mi nisters of Ukraine," No.996, of 9 June 1999.
- The Law "On Foreign Economic Activity," No.959-XII, of 16 April 1991, as
amended.
- The Law "On the State Regulation of Import of Agricultural Produce," No.468, of 17
July 1997, as amended.
- The Law "On Introduction of Changes to the Law "On State Regulation of Import of
Agricultural Produce," No.321, of 16 January 1998.
- The Law "On Introduction of Changes to Article 7 of the Law "On State Regulation
of Import of Agricultural Produce," No.198, of 5 March 1998.
- The Resolution of the Cabinet of Ministers "On Introduction of Changes to the Rates
of Import Duties for Certain Types of Agricultural Machinery and Equipment
Thereto," No.1215, of 3 August 1998.
- The Law "On Export Duties for Alive Animals and Leather Raw Materials," No.180,
of 7 May 1996.
- The Resolution of the Cabinet of Ministers "On the Mechanism of Regulation of
Cane Sugar Supplies in 1998," No.892, of 16 June 1998.
- The Law "On the State Regulation of the Production and Trade in Ethyl Alcohol,
Cognac and Fruit Spirits, Alcoholic Beverages and Tobacco Products," No.481, of 19December 1995, as amended
5.
- The Resolution of the Supreme Rada "On the Procedure for the Enactment of the Law
"On State Regulation of Production and Trade in Ethyl Alcohol, Cognac and Fruit
Spirits, Alcoholic Beverages and Tobacco Products," No.482/95, of 19 December
1995.
- The Resolution of the Cabinet of Ministers "On the Temporary Limitation of Export
of Leather Raw Materials Used In Foreign Give-and-Take Raw Materials
Transactions," No.353, of 23 March 1998.
- The Law "On Foreign Give-and-Take Raw Materials Transactions," No.327, of 15
September 1995, as amended by Law "O n Adding and Amending the Law On
                                                     
4 During the three year period (1997-1999) this law was amended 34 times.
5 This law was amended twice (in 1996).WT/ACC/UKR/62/Add.2
Page 8
Foreign Give-and-Take Raw Materials Transactions (On Oil Products Sold in the
Ukrainian market)," No.958-XIV, of 15 July 1998.
- The Law "On the Taxation System," No.1251-XII, of 25 June 19916.
The following normative acts are not in force:- The Decree of the Cabinet of Ministers "On the Peculiarities of Property Privatization
in the Agro-Industrial Complex," No.51-93, of 17 May 1993.
- The Resolution of the Cabinet of Ministers, No.452, of 13 May 1997.
- The Decree of the President of Ukraine "On the Fixed Agricultural Tax," No.652, of
18 June 1998.
- The Decree of the President of Ukraine "On the Measures of Support to Agricultural
Goods Producers of Mountain Zones a nd Woodlands," No.870, of 10 August 1998.
- The Resolution of the Cabinet of Ministers "On the Procedure for the Calculation and
Payment of Subsidies to Agricultural Goods Producers for Milk and Animals for
Slaughtering Sold by such Producers to Processing Enterprises," No.145, of 26
February 1998.
- The Resolution of the Cabinet of Ministers "On the Introduction of Amendments and
Additions to the Resolution of the Cabinet of Ministers No.145, of 16 February
1998," No.1096, of 15 July 1998.
- The Resolution of the Cabinet of Ministers "On Establishing the Terms of Seasonal
Import Duties for Agricultural Produce in 1998," No.754, of 28 May 1998.
- The Decree of the President "On the Procedure of Importation into Ukraine of Certain
Types of Oil in 1998," No.444, of 8 May 1998.
- The Resolution of the Cabinet of Ministers "On Quotas and Licensing of Export of
White Sugar that will be Supplied to the Russian Federation in 1998 without Taxation
with Import Duties," No.443, of 6 April 1998; 1 March 1999
- The Law "On the Rates of Excise Duty and Import Duties for Certain Goods
(Produce)," No.313, of 11 July 1996, as amended
7.
- The Resolution of the Cabinet of Ministers Ukraine "On the List of Goods of Critical
Imports," No1145, of 28 July 1998.
- The Resolution of the Cabinet of Ministers "On the List of Goods of Critical Imports
Importation of Which is Carried Out Without Value Added Tax Payment," No.1106,
of 10 October 1997.
The following normative acts are replaced by the Resolution of the Cabinet of Ministers “On
the List of Critical Imports,” No. 1080, of 18 June 1999:
- The Resolution of the Cabinet of Ministers of Ukraine "On the Introduction of
Changes to the Resolution of Cabinet of Ministers of Ukraine, No.1200, of 3 August
1998," No1552, of 29 September 1998;
- The Resolution of the Cabinet of Ministers "On the Rates of Excise Duty for Certain
Goods and Produce," No.1200, of 3 August 1998.
- The Decree of the President of Ukraine "On the Rates of Excise Duty for Ethyl
Alcohol Used by Domestic Goods Producers to Produce Medicinal Preparations,"
No.1616, of 12 October 1998.
                                                     
6 This law is in force, but its text has been amended many times, and the law is now totally
different from what it was at the time of its original enactment.
7 This law was amended six times in the course of 1997-1999.WT/ACC/UKR/62/Add.2
Page 9
The following normative acts are not enforced:
- The Law "On the Experimental Introduction of the Single Fixed Agricultural Tax,"
No.25, of 15 January 1998.
- The Resolution of the Cabinet of Ministers "On the Conditions of Supply of
Agricultural Enterprises with Mineral Resources in 1998," No.977, of 3 September
1997
- The Resolution of the Cabinet of Ministers "On the Mechanism of Providing the
Agro-Industrial Production with Oils and Lubricants," No.161, of 27 July 1998.
- The Resolution of the Cabinet of Ministers "On Overcoming the Crisis Situation in
Stock-Raising and Poultry Farming and the Stabilization of the Industry
Development," No.1474, of 29 December 1997.
- The Decree of the President "On the Measures to Support Prices and Income of
Agricultural Goods Producers," No.614, of 11 June 1998.
Question 20.
Are prices being “supported?”
Reply:
See reply to Question 24.
Question 21.
If so, how are prices supported?
Reply:
See reply to Question 24.
Question 22.
Which Government Agency manages the country’s price support mechanism?
Reply:
See reply to Question 24.
Question 23.
On what criteria is a decision to support prices made?
Reply:
See the composite answer to Question 24.
Question 24.
Please advise the relevant legislativ e documents outlining such criteria.WT/ACC/UKR/62/Add.2
Page 10
Reply:
No mechanism has been developed for the implementation of the Decree of the President of
Ukraine "On Measures to Support Prices and Income of Agricultural Goods Producers," No.614, of
11 June 1998 (which, in fact, was a framework action plan), and the decree is not in force any more(see the answer to question 19).
There are no funds available for the introduction of any price support measures. In any event,
the decree expressly states that all measures, if they are introduced, should be in line with the
international treaty obligations of Ukraine.
Question 25.
Could Ukraine explain why the measures outlined in Section 2 (d) of the memorandum are
necessary?
Reply:
See reply to Question 27.
Question 26.
How much funding will be provided for the establishment of an infrastructure for the
development of an agriculture produce market?
Reply:
See reply to Question 27.
Question 27.
Please provide more information about the State Fund for the Support of Prices and Incomes.
Reply:
These measures were introduced to stimulate the development of Ukraine's agro-industrial
complex. Similarly to the other attempted reforms, th e funding efforts, referred to above, resulted in
no more than a framework action plan. They have never been implemented because there are no
funds. In any event, the whole funding scheme seems rather controversial. As it is not in effect, an
analysis of its character and content would be academic.
The State Fund for the Support of Prices and Incomes has not been created.
Question 28.
Please provide a more detailed explanation than that contained in WT/ACC/UKR/62/Add 1
about the Law on State Regulation of the Im port of Agriculture Produce. Why are there
preferential rates on machinery?
Reply:
Preferential rates on machinery are not included in the Law "On State Regulation of Import of
Agricultural Produce," No.468, of 17 July 1997. High rates on agricultural machinery, which existed
up to August 1998, resulted in increased prices for agricultural products. Because of the high rates, theWT/ACC/UKR/62/Add.2
Page 11
machinery prices were also too high to be affordable to Ukrainian agricultural sector entities. That is
why the rates were considerably decreased (down to 0.2%).
Question 29.
Please advise the goods which will be charged a higher import duty rate as a result of Resolution
98/99 “On Measures Aimed at Protecting the Domestic Market from Imported Products and
Foodstuff”.
Reply:
See reply to Question 30.
Question 30.
How was the decision reached to increase the rates on particular goods and not on others?
Reply:
The Directive of the President “On Measures Aimed at Protecting the Domestic Market from
Imported Products and Foodstuff,” No.98/99-RP, of 17 May 1999 (ref. in Question 29 above as
Resolution 98/99 “On Measures Aimed at Protecting the Domestic Market from Imported Productsand Foodstuff”) is a framework action plan. It has not been implemented, and there is no normative
legislation relating to it.
Question 31.
Which Government Agency is responsible fo r collating the statistical information on
agricultural imports?
Reply:
The State Customs Committee is in charge of collating the statistical information on
agricultural imports.
Question 32.
Which Government Agency decided to re commend certain goods for duty increases?
Reply:
It can be any executive agency whose mandate includes dealing with trade and tariff policy
issues for certain types of products. For agricultur al products the Ministry of Agri-Industrial Complex,
the Ministry of Foreign Economic Relations and Trade, and the Ministry of Economy can recommendimport measures. But the final decision is made either by the Parliament (in the case of agricultural
products) or by the Cabinet of Ministers (in other cases).
Question 33.
We are confused as to why the Law of Ukraine of 7 May 1996, No.180 “On Export Duties” has
lapsed. Please advise the legislation which annulled Law No.180.WT/ACC/UKR/62/Add.2
Page 12
Reply:
Memorandum of Economic Policy for the Period from 1 July 1998 to 30 June 2001, adopted
by the Cabinet of Ministers of Ukraine, the National Bank of Ukraine and the International Monetary
Fund, stipulated that Ukraine undertakes to repeal (article 19 of the Memorandum) the Law ofUkraine "On Export Duty for Live Cattle and Leather Raw Materials," No. 180/96, 7 May 1996 (ref.
above as Law of Ukraine of 7 May 1996, No.180 “On Export Duties”), before 15 November 1998.
Unfortunately this obligation has not been fulfilled yet. A decision on this issue is pending. It is
expected to be made in the nearest future.
Question 34.
Please provide more information on the “n ational interests and goals” referred to in
WT/ACC/UKR/62/Add 1.
Reply:
National interests and goals include a balance between imported and home-made agricultural
products. Taking into account the difficult economic situation of the Ukrainian agricultural sector, it is
very important to preserve this balance simply to keep the sector alive. Maintaining the balance
includes such artificial methods as temporary quotas.
The agriculture of Ukraine is in a precarious situation right now. It is completely
decapitalized. An additional market shrinkage can mean a death knell. The domestic producers are
experiencing very hard times and should be protected from large imports of similar foreign products.
After the stabilization of the agricultural sector is achieved, all support measures (even the framework
measures) shall be eliminated.
Question 35.
More detail on the formula used to calculate th e “proportions between imported and domestic
agricultural goods” (refer WT/ACC/UKR/62/Add 1)  is also required as we are unsure what
Ukraine means in this regard.
Reply:
These proportions are calculated by means of a comparison of imports and the domestic
production and consumption volumes for the respective types of goods, and by projecting the relevant
indices for a certain period of time into the future.
Question 36.
Why have new quotas been introduced?
Reply:
See reply to Question 39.
Question 37.
When will the quota system be eliminated?WT/ACC/UKR/62/Add.2
Page 13
Reply:
See reply to Question 39.
Question 38.
With reference to the auction process, who can ap ply? It is unclear whether national treatment
applies in this process. Is this the case? If not, why not?
Reply:
See reply to Question 39.
Question 39.
The Memorandum notes that the Ministry of Agriculture has not sold or auctioned quotas.
What has it done instead? How is the system administered?
Reply:
During 1991-1999 no quotas were applied to any types of imported products. A mechanism
for their introduction was enacted, but it has not been used. No auctions or other means of licenseawards have taken place. In fact, there has been no need for quotas.
The development of a fixed schedule for the abrogation of the relevant Ukrainian legislation
is in progress. Concerning the auction procedures, it should be mentioned that every subject (person)
is allowed to participate in an auction when one is held.
Question 40.
Please explain why quantitative restrictions have been introduced.
Reply:
Quantitative restrictions are introduced either to implement the relevant international
agreements (for example the quotas imposed by Russia on Ukrainian white sugar) or to counteract a
shortfall in the production of specific products.
Question 41.
Which Government Agency is responsible for implementing these restrictions?
Reply:
The Ministry of Foreign Economic Relations and Trade and/or any other ministry designated
by the Cabinet of Ministers is in charge of the administration of the quantitative restrictions.
The State Customs Committee is responsible for the collection of information about the
volume of quotas used.WT/ACC/UKR/62/Add.2
Page 14
Question 42.
When will these be removed?
Reply:
See reply to Question 40.
__________