G/SG/N/8/UKR/8  
G/SG/N/10/UKR/8  
G/SG/N/11/UKR/6  
25 May 2020 
(20-3781) Page: 1/4 
Committee on Safeguards  Original:  English  
 
  
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT  ON 
SAFEGUARDS ON FINDING A SERIOUS INJURY OR  THREAT  
THEREOF CAUSED BY INCREASED IMPORTS  
NOTIFICATION OF A PROPOSAL TO IMPOSE A MEASURE  
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2  
OF THE AGREEMENT ON SAFEGUARDS  
UKRAINE  
Certain nitrogen fertilizers  
The following communication, dated 21 May 2 020, is being circulated at the request of the Delegation 
of Ukraine.  
 
_______________  
 
 
Pursuant to Articles 12.1(b) of the Agreement on Safeguards, Uk raine submits a notification on 
finding a serious injury or threat thereof, to the domestic industry producing certain nitrogen 
fertilizers and a notification on proposed safeguard measures. This notification contains all pertinent 
information relating to the proposed safeguard measures in accordance with Article 12.2 of the 
Agreement on Safeguards and a request for consultations pursuant to Article 12.3 of the Agreement 
on Safeguards.  
On 21 August 2019 the Interdepartmental Commission on International Trad e ("Commission") took 
the decision "On initiation and conduction of safeguard investigation on imports into Ukraine of 
certain nitrogen fertilizers (including: ammonium nitrate and lime -ammonium nitrate, urea and 
urea-ammonia mixture), regardless of countr y of origin and export" № SP - 425/2019/4411 -03 
(G/SG/N/6/UKR/14 of 5 September 2019). On 28 August 2019 the abovementioned decision was 
published in the official newspaper "Uryadovyi Courier" № 163.  
The investigation had been initiated pursuant to the app lication of the domestic industry in particular 
by PJSC "Azot", PJSC "Rivneazot", PJSC "Severodonetsk Association Azot", LLC "Status -Trade" and 
JSC "DniproAzot" ("the Applicant").  
1  TO PROVIDE EVIDENCE,  CITING RELEVANT DAT A AND THE APPLICABLE  PERIOD OF 
INVES TIGATION OF SERIOUS INJURY OR THREAT THE REOF CAUSED BY INCRE ASED 
IMPORTS  
The period of investigation: 2016, 2017, 2018, 1 July 2018-30 June 2019.  
The results of the analysis of the applicant's economic situation show that in the recent period, 
compared to the first period:  
- production volumes decreased by 16.83 %; 
- production capacity increased by 0.78 % and utilization decreased by 17.48 %; 
- the sales of the product on the domestic market decreased by 5.08 %; G/SG/N/8/UKR/8 • G/SG/N/10/UKR/8 • G/SG/N/11/UKR/6  
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  - the applicant's share in consumption decre ased by 9.13 % while the consumption increased 
by 4.45 %; 
- stocks in warehouses at the end of the period increased by 7.72 %; 
- employment rate decreased  by 15.28 %; 
- the average monthly salary increased by 59.50 %; 
- the loss of the company decreased by 79.04 %, but the activity of the Applicant remains 
unprofitable;  
- profitability from the sale of the product in the domestic market is negative, but this indicator 
has improved by 80,22 %; 
- liquidity conditions  decreased by 18.56 %; 
- investments in production of the product  decreased by 43,96 % compared to the base period.  
The cumulative assessment of the above factors led to establishment of the material injury to the 
national producer.  
2  TO PROVIDE INFORMATI ON ON WHETHER THERE IS AN ABSOLUTE INCRE ASE IN 
IMPORTS OR AN INCREA SE IN IMPORTS RELATIVE  TO DOMESTIC PRODUCT ION 
According to the customs statistics (data) of the State Customs Service during the investigation 
period:  
- in absolute terms import volumes increased by 36.87 %; 
- with regard to production of goods in Ukraine import volumes increased by 101.61 %, relative 
to consumption of goods increased by 31.04 %. 
On the basis of the above, it was established that during the investigation period there was a 
significant increase in the volume of imports of goods into Ukraine.  
In accor dance with Article XIX:1 of the General Agreement on Tariffs and Trade 1994 ("GATT  1994"), 
the investigating authority has considered unforeseen circumstances that led to a significant increase 
in the volume of import of goods, which caused significant injury to the domestic industry producing 
the like product.  
According to the Food and Agriculture Organization of the United Nations, the volume of possible 
production of nitrogen fertilizers in the world for the period from 2010 to 2019 increa sed by almost 
20% (from 134.75 million tons to 161.50 million tons). At the same time, the demand for nitrogen 
fertilizers in the world increased by only 3.4 % (from 103.88 million tons to 107.42 million tons). It 
is obvious that the production capacity of nitrogen fertilizers significantly exceeds the demand. Thus, 
in recent years, there has been a large gap between nominal global production capacity and demand, 
which has led to an unprecedented excess potential in the global nitrogen fertilizer market, whi ch 
persists despite measures taken to reduce it. In addition, as of 2019 in the global nitrogen fertilizer 
market, the balance between supply and demand is constantly growing in surplus.  
Fertilizer companies continue to be financially vulnerable as structural imbalances persist in the 
sector. These imbalances are highlighted by distorting subsidies and government support measures. 
Due to uninterrupted production, many fertilizer producers, especially in countries where the state 
distorts the normal p osition of market forces, maintained capacity utilization at high levels and 
flooded the third country markets with their products at low prices, when it is impossible, to use 
domestic consumption fully.  
All of this has led to an increase in imports into U kraine and a general decline in prices. It should be 
noted that such a scenario became possible because of the fact that due to the development of the 
agricultural sector of Ukraine, the fertilizer market in Ukraine has become a premium one for foreign 
suppliers. This factor has also become a key given the growth of imports.  
In addition, the above effect was intensified by restrictive practices in the third country markets. In 
particular, the WTO official website states that from 2010 to 2019, 329 anti -dump ing measures were 
applied in the chemical industry. And 170 of them were applied only for the period of 2015 -2018. 
This indicator is the second in the world for the application of measures after the metallurgical 
complex.  G/SG/N/8/UKR/8 • G/SG/N/10/UKR/8 • G/SG/N/11/UKR/6  
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  Considering the above, the investi gating authority concluded that these factors led to an 
unpredictable increase in imports into Ukraine and, as a consequence, an imbalance in favor to 
foreign producers -suppliers of goods.  
The major exporting countries of imports of the product involved.  
Country  1st year period  2nd year period  3rd year period  4th year period  
Amount of imports by country of origin, tons  
1st group - ammonium nitrate and limestone ammonia mixture  
The Republic of Bulgaria   15 353,4  24 425,4  146 992,0  
Georgia   37 294,0  89 997,0  188 894,9  
The Russian Federation  292 902,2  829 708,4  200 420,4  38 761,4  
The Republic of Uzbekistan  24 071,6  176 170,6  141 187,1  57 254,3  
The Republic of Kazakhstan  44 832,0  63 361,0  74 219,5  67 154,0  
The Republic of Poland  1 359,0  15 330,3  50 009,7  81 165,0  
The Republic of Turkey   10 020,0  63 009,4  209 731,3  
2nd group - urea and urea ammonium nitrate  
The Republic of Belarus  95 566,1  144 191,7  117 979,7  128 259,2  
The Arab Republic of Egypt   45 474,9  21 900,0  56 183,2  
The Republic of Lithuania  11 975,8  88 524,5  140 177,0  117 849,8  
The Republic of Uzbekistan  3 434,0  28 379,9  81 060,5  36 952,6  
The Russia Federation  476 137,5  427 595,6  24 413,7  53,3 
The Republic of Poland  7 302,3  24 534,5  33 219,6  58 177,2  
 
3  TO PROVIDE PRECISE DESCRIPTION OF THE P RODUCT INVOLVED  
- 1st group  ‒ solid fertilizers and other mineral or chemical products, nitrogen (not in aqueous 
solution): uncontaminated ammonium nitrate; ammonium nitrate with calcium carbonate or 
other inorganic substances other than fertilizers; mixtures of fertilizers and other p roducts 
based on ammonium nitrate (ammonium nitrate) containing two or more nutrients, in which 
the total mass fraction of nitrate and ammonium nitrogen in terms of nitrogen in the dry 
matter is not less than 28 wt. %, irrespective of their intended use, classified in accordance 
with UKTZED under the codes 3102 and 3105;  
- 2nd group ‒ urea, including in aqueous solution, and a mixture of urea and ammonium nitrate 
in aqueous or ammonia solution, classified in accordance with UKTZED under the cod es 
3102 10 and 3102 80 00 00 respectively.  
4  TO PROVIDE PRECISE D ESCRIPTION OF THE PR OPOSED MEASURE  
In order to take into account the interests of supporting traditional goods flows and to avoid a 
possible deficit of goods on the market of Ukraine, the quota  was calculated considering obligations 
of Ukraine under free trade agreements and types of goods.  
Country  1st year period  2nd year period  3rd year period  
1st group - ammonium nitrate and limestone ammonia mixture  
The European Union  105 115,87  107 218,19  109 362,55  
The Republic of Uzbekistan  77 916,22  79 474,55  81 064,04  
Georgia  69 456,41  70 845,54  72 262,45  
The Republic of Kazakhstan  54 687,15  55 780,90  56 896,51  
Other countries  50 000,00  51 000,00  52 020,00  
TOTAL  357 175,66  364 319,17  371 605,55  
2nd group - urea and urea ammonium nitrate  
The European Union  216 422,25  220 750,69  225 165,71  
The Republic of Belarus  167 079,25  170 420,83  173 829,25  
The Republic of Uzbekistan  55 177,17  56 280,72  57 406,33  
Other countries  82 981,02  84 640,64  86 333,46  
TOTAL  521 659,69  532 092,89  542 734,74  
 
5  TO PROVIDE PROPOSED DATE OF INTRODUCTION  OF THE MEASURE  
June of 2020.  G/SG/N/8/UKR/8 • G/SG/N/10/UKR/8 • G/SG/N/11/UKR/6  
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  6  TO PROVIDE EXPECTED DURATION OF THE MEAS URE 
Safeguard measures are planned to be imposed for a period of 3 years.  
7  TO PROVIDE FOR A MEASUR E WITH A DURATION OF  MORE THAN THREE YEA RS THE 
PROPOSED DATE FOR TH E REVIEW (UNDER ARTI CLE 7.4) TO BE HELD NOT LATER THAN 
THE MID -TERM OF THE MEASURE, IF SUCH A D ATE FOR THE REVIEW H AS ALREADY BEEN 
SCHEDULED  
Not applicable . 
8  IF THE EXPEC TED DURATION IS OVER  ONE YEAR, TO PROVID E EXPECTED TIMETABLE  
FOR PROGRESSIVE LIBE RALIZATION OF THE ME ASURE  
The level of the quota should be increased by 2 % annually during measures validity.  
9  TO PROVIDE INFORMATI ON RELATING TO THE E XTENSION OF A SAFEGU ARD M EASURE  
Not applicable . 
10  EXCLUSION OF CERTAIN  COUNTRIES FROM THE SCOPE OF THE DEFINIT IVE MEASURES  
According to the Article 9.1 of the Agreements on Safeguards (List of the Least Developed Countries 
of the United Nations), Free Trade Agreement between the EFT A States and Ukraine dated 
24.06.2010, Free Trade Agreement between the Government of Ukraine and the Government of 
Montenegro dated 18.11.2011, Free Trade Agreement of the Commonwealth of Independent States, 
dated 18.10.2011 and taking into account Chapte r 8 of the Article XXIV of the GATT 1994 imports 
of goods described in paragraph 3 of this notification into Ukraine originating from the following 
countries should be excluded from the application of the definitive measures: the Republic of Iceland, 
the P rincipality of Liechtenstein, the Kingdom of Norway, the Swiss Confederation, the Republic of 
Montenegro, the Republic of Azerbaijan,  the Republic of Armenia, the Republic of Kyrgyzstan, the 
Republic of Moldova, the Republic of Tajikistan, the Republic of  Turkmenistan,  the Islamic Republic 
of Afghanistan, the Republic of  Angola, the People's Republic of Bangladesh, the Republic of  Benin, 
the Kingdom of Bhutan, the Republic of  Burkina Faso, the Republic of  Burundi, the Kingdom of 
Cambodia, the Central African Republic, the Republic of  Chad, the Union of the Comoros, the 
Democratic Republic of the Congo, the Republic of  Djibouti, the State of Eritrea, the Federal 
Democratic Republic of Ethiopia, the Islamic Republic of  Gambia, the Republic of  Guinea, the  
Republic of  Guinea -Bissau, the Republic of  Haiti, the Republic of  Kiribati, the Lao People's Democratic 
Republic, the Kingdom of Lesotho, the Republic of  Liberia, the Republic of  Madagascar, the Republic 
of Malawi, the Republic of  Mali, the Islamic Republ ic of Mauritania, the Republic of  Mozambique, the 
Republic of  the Union of Myanmar, the Federal Democratic Republic of  Nepal, the Republic of  Niger, 
the Republic of  Rwanda, the Democratic Republic of Sao Tome and Principe, the Republic of Senegal, 
the Repu blic of  Sierra Leone, Solomon Islands, the Federal Republic of Somalia, the Republic of 
South Sudan, the Republic of  the Sudan, the Democratic Republic of Timor -Leste, the Republic of  
Togo, Tuvalu, the Republic of  Uganda, the United Republic of Tanzania, t he Republic of  Yemen, the 
Republic of  Zambia.  
11  PROCEDURES RELEVANT TO THE DECISION ON A PPLICATION OF THE ME ASURES AND 
INFORMATION REGARDIN G PROCEDURES FOR PRI OR CONSULTATIONS WIT H THOSE 
MEMBERS HAVING A SUB STANTIAL INTEREST AS  EXPORTERS OF THE PR ODUCT 
CONCE RNED  
As a measure to prevent the extension of COVID -19, Ukraine proposes, if necessary, to held the 
consultations in the form of an exchange of views by providing the information in writings or by 
means of videoconference.  
Members having a substantial inte rest as exporters of the product subject to the investigation that 
would like to consult with Ukraine shall send their position papers to the meconomy@me.gov.ua  (for 
official registration ) and to the email addresse s of the responsible for the investigation persons 
zaiets@me.gov.ua  and suhanov@me.gov.ua  before 04.06.2020 or request videoconference to be 
hold till 04.06.2020 . 
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