G/SG/N/8/UKR/5  
G/SG/N/10/UKR/5  
G/SG/N/11/UKR/3  
 
10 June 2016  
(16-3175)  Page: 1/8  
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 UNDER ARTICLE 12.1( С) OF THE  
AGREEMENT ON SAFEGUARDS  
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2 
OF THE AGREEMENT ON SAFEGUARDS 
UKRAINE  
(Flexible porous plates, blocks and sheets of polyurethane foams) 
The following communication, dated 7 June 2016, is being circulated at the request of the 
Delegation of Ukraine. 
 
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On 7 July 2015 was initiated the investigation on imports of flexible porous plates, blocks and 
sheets of polyurethane foams regardless of country of origin and export in accordance with Decision of the Interdepartmental Commission of Foreign Trade of 03.07.2015 
No. SP- 332/2015/4442-06 "On initiation and conduction of safeguard investigation on import in 
Ukraine of the flexible porous plates, blocks and sheets of polyurethane foams regardless of country of origin and export" (G/SG/N/6/UKR/11 of 17 July 2015). 
The investigation has been initiated pursuant to the application of the Interform Manufacturing Ltd, 
Interform-Dnipro LLC, Interform-West LLC an d Interform-M (hereafter – the Applicant). 
Taking into consideration that collective output of these entities in production of the like products 
constitutes a major proportion of the total domestic production of those products (more than 
50%), these entities represent the domestic indust ry in the meaning of the Article 4.1.(C) of the 
Agreement on Safeguards. 
On 26 May 2016 the Interdepartmental Commission  on International Trade took a Decision 
No. SP-356/2016/4411-05 on application of safeguard measures on imports into Ukraine of flexible 
porous plates, blocks and sheets of polyurethane foams regardless of their country of origin and export.  
Notice on the Decision No. SP-356/2016/4411-05 on application of safeguard measures on imports 
into Ukraine of flexible porous plates, blocks an d sheets of polyurethane foams regardless of their 
country of origin and export published in the newspaper "Uryadovyi Courier" No. 100 as of 
28.05.2016 (Governmental Courier).  G/SG/N/8/UKR/5 • G/SG/N/10/UKR/5 • G/SG/N/11/UKR/3 
 
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  1  EVIDENCE OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED 
IMPORTS 
1. A. Evidence of serious injury In order to determine the serious injury to domestic production of the like product in Ukraine as a 
result of growing imports into Ukraine, an evaluation of all relevant factors of an objective and 
quantifiable nature affecting the situation in this industry has been undertaken. 
The period of investigation was from 1 January 2012 – till 31 December 2014. 
During this period an evaluation of growth of im ports into Ukraine has been carried out, as well as 
the state of industrial, commercial and financial situation of the domestic industry. This period of investigation consists of three comparable periods: 1 January 2012 – 31 December 2012 (2012), 1 January 2013 – 31 December 2013 (2013), 1 January 2014 – 31 December 2014 (2014). 
Analysis has shown, that during the period of investigation: 
- Applicant's production of goods in 2014 compared to 2013 decreased by 12.39%, in 2014 
compared to 2012 by 11.78%; 
- Applicant's percentage of capacity utilization in 2014 compared to 2013 decreased 
by 12.54%, in 2014 compared to 2012 by 42%; 
- Applicant's sales of goods on the domestic market in 2014 compared to 2013 decreased 
by 12.83%, in 2014 compared to 2012 by 12.6%; 
- total balance of goods in 2014 compared to 2013 increased by 64.52%, in 2014 compared 
to 2012 by 500.00%; 
- employment rate on the Applicant's enterprises in 2014 compared to 2013 decreased 
by 11.28%, in 2014 compared to 2012 by 14.37%; 
- liquidity index in 2014 compared to 2013 decreased by 16.13%, in 2014 compared to 2012 
by 50.51%; 
- Applicant's income from goods sales on the domestic market in 2014 compared to 2013 
decreased by 48.78%, in 2014 compared to 2012 by 67.91%; 
- goods ratio of the Applicant in consumption in 2014 compared to 2013 decreased by 6.24%, 
in 2014 compared to 2012 by 4.95%; 
- enterprises of the Applicant haven't had capital investment profit. G/SG/N/8/UKR/5 • G/SG/N/10/UKR/5 • G/SG/N/11/UKR/3 
 
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  Table 1.A.1. 
Indicator 2012 2013 2014 
Quantity of production 
Production, tons  
Dynamics compared to previous year, % - 0.70 -12.39 
Dynamics compared to 2012, % - 0.70 -11.78 
Production capacity 
Capacity, tons  
Dynamics compared to previous year, % - 52.17 - 
Dynamics compared to 2012, % - 52.17 52.17 
Utilization of production capacity 
Utilization, %  
Dynamics compared to previous year, %  - -33.68  -12.54  
Dynamics compared to 2012, %  - -33.68  -42.00  
Total amount of stock of goods at the end of period 
Amount of stock, tons  
Dynamics compared to previous year, % - 264.71 64.52 
Dynamics compared to 2012, % - 264.71 500.00 
Sales volume on the domestic market of Ukraine 
Sales volume, tons 
Dynamics compared to previous year, % - 0.26 -12.83 
Dynamics compared to 2012, % - 0.26 -12.60 
Share of goods in total production of domestic producer 
Share of goods in production, % 
Dynamics compared to previous year, % - -0.44 -0.50 
Dynamics compared to 2012, % - -0.44 -0.93 
Share in consumption 
Share, %  
Dynamics compared to previous year, % - 1.37 -6.24 
Dynamics compared to 2012, % - 1.37 -4.95 
Price on the domestic market of Ukraine 
Price, US dollars/tonne  
Dynamics compared to previous year, % - -3.38 -5.04 
Dynamics compared to 2012, % - -3.38 -8.25 
Production cost  
Production cost, US dollars/tonne  
Dynamics compared to previous year, % - 0.86 -2.94 
Dynamics compared to 2012, % - 0.86 -2.10 
Profitability from sales of unit on the domestic market 
Profitability, % 
Dynamics compared to previous year, % - -44.61 -39.66 
Dynamics compared to 2012, % - -44.61 -66.57 
Employment 
Quantity, people 
Dynamics compared to previous year, % - -3.49 -11.28 
Dynamics compared to 2012, % - -3.49 -14.37 
Labour productivity  
Productivity, tons per capita 
Dynamics compared to previous year, % - 4.35 -1.26 
Dynamics compared to 2012, % - 4.35 3.03 
Profit/loss of the domestic producer from sales on the domestic market 
Profit, ths. dollars. USA 
Dynamics compared to previous year, % - -37.34 -48.78 
Dynamics compared to 2012, % - -37.34 -67.91 
Liquidity conditions  
Coefficient, % 
Dynamics compared to previous year, % - -41.00 -16.13 
Dynamics compared to 2012, % - -41.00 -50.51 
Investments  
Investments, ths. dollars. USA  
Dynamics compared to previous year, % - -33.64 39.98 
Dynamics compared to 2012, % - -33.64 -7.11 
 
Together, all these factors give grounds to the investigation authority to conclude about the fact of serious injury to the domestic industry during the period of investigation. G/SG/N/8/UKR/5 • G/SG/N/10/UKR/5 • G/SG/N/11/UKR/3 
 
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  1.B. Causality and non-attribution analysis 
The impact of rising imports of goods In the framework of the investigation was determined that during 2012-2014: - price of imports into Ukraine of goods in 2014 compared to 2012 increased by 6.11%, 
in comparison with 2013 by 1.8%; 
- price of like products in 2014 compared to 2012 decreased by 8.25%, in comparison with 
2013 by 5.04%; 
- production cost of like products of the domestic producer in 2014 decreased compared 
to 2012 by 2.94%; 
- prices of imported goods declined to a level lower than prices of like products, though the 
difference between prices decreased totally by 71.84%. Indicated reduction was achieved 
not through the growth in import prices but in connection of decrease in selling prices of 
domestic producers; 
- prices of imported goods declined not just to a level lower than prices of like products, but 
lower than production cost of like products, though the difference between import prices and 
production cost of domestic producers decreased totally by 76.56%; 
At the same time, data on the level of import pric es, prices and production cost of like products 
indicates that prices of imported goods declined much lower than prices of domestic producer and 
even lower of its production cost. Herein domestic producer in connection with cheap and increasing import had to lower his selling prices faster than reducing the production cost of like products. 
In addition, recent trends showed that in  January-February 2016 import prices decreased 
by 24.44% compared with January-February 2015 and by 24.43% compared with January-February 2012. 
As the results of the investigation, the investigation authority has found that during the 
investigation period there has been the growth of imports of goods in Ukraine, subject to 
investigation, both in absolute and relative terms to production of domestic industry. 
Thus indicated significant increase of imports of goods was in 2013-2014, before and during the 
period when sales volume and production volumes of domestic producer decreased (sales volume by 12.60%; production volumes by 11.78%). 
The trend of imports growth to Ukraine of goods su bject to investigation, and terms of imports led 
to losses in activity of enterprises of domestic industry. 
Indicated conditions of import goods to Ukraine subject to investigation, led to the displacement 
from the internal market and reduction of the proportion of applicants in consumption in the 
domestic market of Ukraine and, consequently, a decrease in production, capacity utilization 
percentage, increase in finished goods inventory balance, reduction in sales of goods on the domestic market of Ukraine, reducing the number of employees in Applicant's enterprises and the 
liquidity ratio etc. It should be noted that share in consumption of goods imports subject to 
investigation in the domestic market of Ukraine on the contrary increased. G/SG/N/8/UKR/5 • G/SG/N/10/UKR/5 • G/SG/N/11/UKR/3 
 
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  Table 1.B.1 
Indicator 2012 2013 2014 
Import price, US dollars/tonne 
Dynamics compared to previous year, % - 4.23 1.80 
Dynamics compared to 2012, % - 4.23 6.11 
Like product price on the domestic market of Ukraine, US dollars/tonne  
Dynamics compared to previous year, % - -3.38 -5.04 
Dynamics compared to 2012, % - -3.38 -8.25 
Like product production cost, US dollars/tonne 
Dynamics compared to previous year, % - 0.86 -2.94 
Dynamics compared to 2012, % - 0.86 -2.10 
Difference on which imports prices of goods are lower than like products prices, US dollars/tonne  
Dynamics compared to previous year, % - -37.08 -55.25 
Dynamics compared to 2012, % - -37.08 -71.84 
Difference on which imports prices of goods are lower than like products production cost, US 
dollars/tonne  
Dynamics compared to previous year, % - -29.69 -66.67 
Dynamics compared to 2012, % - -29.69 -76.56 
Other Factors 
In the framework of the investigation the Ministry examined other factors not depending on 
imports, but have a significant impact on the Ukrainian market in general and situation in the field of national industry, namely, significant investments to increase production capacity, and the 
negative impact of such investments may not affect imports and decrease the exports volumes of 
domestic producers. 
On the results of the investigation the Ministry de termined that the domestic producer during the 
investigation period has repeatedly underlined on the interest of further development of domestic 
production, establishment of new enterprises and creating new working places. In this regard, 
in 2012 national producer invested in new equipment purchasing, which allowed significantly 
increase the production capacity. Further expansion of production, creation of working places, 
measures to improve social infrastructure of ente rprises are planned. However, due to increasing 
imports of goods at low prices, conditions of the domestic producer significantly deteriorated in recent years. Thus, domestic producer had to refuse a number of planned investment projects and 
take measures on reducing salaries and quit employees. During the investigation period annual 
investments in production decreased by 7.11%. 
Regarding export activity of the domestic producer  the Ministry determined that the share of sales 
for export in the total production of the domest ic producer remained stable and averaged 7.5%. 
In 2014 compared to 2012 exports of national producer decreased by 12.5%. 
Thus, other factors didn't have a determining effect in relation to the impact on socio-economic 
indicators of the domestic producer and causing him a serious injury. 
Conclusion on causality and non-attribution By the results of the investigation the Ministry  confirmed the conclusions of the determination 
according to which the injury suffered is caused by massive imports and cannot be attributed to 
other factors, most notably investments (new production) and exports reduction. 
2  INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN IMPORTS OR AN 
INCREASE IN IMPORTS RELATIVE TO DOMESTIC PRODUCTION 
(i) Unforeseen developments and effect of the obligations incurred by Ukraine under the 
GATT 1994 
In accordance with the Appellate Body's findings with respect to Article XIX of the GATT 1994 and 
the Agreement on Safeguards, the Ministry ha s examined whether unforeseen developments 
resulted in increased imports causing serious inju ry to the domestic industry producing the like 
product.  G/SG/N/8/UKR/5 • G/SG/N/10/UKR/5 • G/SG/N/11/UKR/3 
 
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  Unexpected events of 2014, such as the political  situation in Ukraine and annexation of Crimea 
could not be foreseen. Therewith, they influenced not only on market conditions in Ukraine, but 
also on the market of the Russian Federation. 
Regarding the market of Ukraine: import prices were lower, however, for various reasons, 
including lower living standards in Ukraine, the national consumer product oriented to domestic 
producer product. With the change of econom ic situation in the domestic market in 2014, 
consumers reoriented to cheaper imported goods that caused the reduction of national producer's prices. Regarding the market of the Russian Fede ration: sanctions against the Russian Federation 
complicated the doing business in its territory, foreign partners compelled to focus on other 
markets, including the market of Ukraine. Thus, all these circumstances are linked and influenced the growth in imports at low prices in Ukraine. Moreover, despite the loss of territory of Ukraine, the volume of imports increased both in absolute and in relative indicators, and was observed the loss of market share of domestic producer. 
Ministry investigated the presence of other factors that could affect the deterioration of financial 
and economic situation of domestic producer. Ministry determined that other factors (currency 
depreciation, investment, exports) had no effect on domestic producer. 
Thus, the Ministry determined that there was a direct logical connection between unforeseen 
developments and increasing of import volumes which led to significant injury to domestic 
producers. 
Based on the relevant information collected and analyzed in the context of the investigation, the 
Ministry concluded that the existence of unforeseen developments has been demonstrated. 
Also in line with the Appellate Body's findings, the Ministry (examined whether and) determined 
that Ukraine had incurred obligations under the GATT 1994, in the form of tariff concessions, for 
the product under investigation. The Schedule of Concessions attached to the Protocol of Accession 
of Ukraine to the WTO supports this conclusion. 
(ii) Increase of imports 
The Ministry examined imports of the goods in absolute terms and relative to consumption or 
production of goods in Ukraine. 
The results of the study showed that during the investigation period there has been a growth of 
import to Ukraine of goods subject to investigation: 
- in absolute terms in 2014 compared with  2013 – increased by 17.77%, and by 28.70% 
in 2014 compared with 2012; 
- with regard to production of goods in Ukraine in 2014 compared with 2013 – increased 
by 31.93%; and by 45.72% in 2014 compared with 2012; 
- relative to consumption of goods in 2014 compared with 2012 – increased by 26.67%; and 
by 39.96% in 2014 compared with 2012. 
Recent trends in January-February 2016 showed imports increase in comparison with the same 
period in 2015 by 9.97% and compared to 2012 – by 79.58%. 
Table 2.1 
Indicator 2012 2013 2014 
Total imports of goods in Ukraine subject to investigation 
Imports, tons 2 005.46 2 191.56 2 581.02 
Dynamics compared to previous year, % - 9.28 17.77 
Dynamics compared to 2012, % - 9.28 28.70 
Imports ratio to production of goods in Ukraine, %  
Dynamics compared to previous year, % - 10.45 31.93 
Dynamics compared to 2012, % - 10.45 45.72 
Imports ratio to consumption of goods in Ukraine, % 
Dynamics compared to previous year, % - 10.49 26.67 
Dynamics compared to 2012, % - 10.49 39.96 G/SG/N/8/UKR/5 • G/SG/N/10/UKR/5 • G/SG/N/11/UKR/3 
 
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  3   PRECISE DESCRIPTION OF THE PRODUCT INVOLVED 
Flexible porous plates, blocks and sheets of poly urethane foams imported to Ukraine and classified 
as per UKTZED code of 3921.13.10.19 (hereinafter – "the Product"). 
4   D E S C R I P T I O N  O F  A N Y  P A R T  O F  T H E  I M P O R T E D  G O O D S  T H A T  W I L L  N O  L O N G E R  B E  
SUBJECT TO THE MEASURE  
Not applicable. 5  PRECISE DESCRIPTION OF THE PROPOSED MEASURE 
The Interdepartmental Commission on Internat ional Trade took a decision of 26.05.2016 
No. SP-356/2016/4411-05 on the application of safe guard measures in a form of imposition of a 
safeguard duty on imports into Ukraine of good s that are the subject of the investigation. 
The safeguard duty rate at which domestic indust ry will not be suffered from injury is 13.09%. 
6  PROPOSED DATE OF INTRODUCTION OF THE MEASURE 
Safeguard measures are coming into force in 40 days from the date of the notice publication in the 
newspaper "Uryadovyi Courier" (Governmental Courier) (No. 100 as of 28.05.2016). 
7  EXPECTED DURATION OF THE MEASURE 
Safeguard measures are planned to impose for a period of 3 years. 8  PROPOSED DATE FOR THE REVIEW OF A MEASURES WITH A DURATION OF MORE 
THAN THREE YEARS 
Not applicable. 9  PROVIDE EXPECTED TIMETABLE FOR PROGRESSIVE LIBERALIZATION OF THE 
MEASURE 
According to the Article 18 of the Law of Ukraine "On Application of Safeguard Measures against 
Imports to Ukraine" and the Article 7.4 of the Agreement on Safeguards the WTO final safeguard 
measures will be liberalized by reducing the size of the rate of safeguard duty: 
- 12 months from the date of application – by 12.44%; 
- 24 months from the date of application – by 11.81%. 
10  FINAL DATE FOR SUBMISSION OF COMMENTS INTERESTED PARTY AND DATE OF 
PRIOR CONSULTATION WITH THE MEMBERS HAVING A SUBSTANT IAL INTEREST AS 
EXPORTERS OF GOODS  
(і) Interested parties may submit comments on this issue and participate in prior consultations 
before 24.06.2016.  
(іі) according to the Article 12.3 of the Agreemen t on Safeguards prior consultation with the 
interested parties, which reveal a substantial interest as exporters of goods, is proposed before 07.07.2016 in Kiev (Ukraine). 
Contacts:  
Address: Kyiv, 01008, Ukraine, 12/2 M. Hrushevskoho Str.  
E-mail: tradedefence@me.gov.ua, suhanov@me.gov.ua, tvoloshina@me.gov.ua 
Tel.: +38 (044) 521-16-24, +38 (044) 521-13-93 G/SG/N/8/UKR/5 • G/SG/N/10/UKR/5 • G/SG/N/11/UKR/3 
 
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  11  INFORMATION PROVIDED IN CASE OF PROLONGATION OF THE MEASURES 
Not applicable. 12  INFORMATION ON MAJOR EXPORTING COUNTRIES AND EXCLUSIONS FOR REASONS 
OTHER THAN THOSE MENTIONED IN ARTICLE 9.1 OF THE SAFEGUARDS AGREEMENT 
(і) Major exporting countries 
The share of the total imports into Ukraine of products subject to investigation indicated in the 
Table 12.1. 
Table 12.1.
 
Country of origin 2014 
Total imports, % 100.00 
Poland, % 52.39 
Romania, % 23.51 
Hungary, % 21.15 
Republic of Turkey, % 0.89 
The Federal Republic of Germany, % 0.47 
(ii) Exclusions for reasons other than those mentioned in Article 9.1 of the Safeguards Agreement  
According to the Free Trade Agreement between the EFTA States and Ukraine dated 24.06.2010, 
between the Government of Ukraine and the Go vernment of Montenegro dated 18.11.2011, Free 
Trade Agreement of the Commonwealth of Indepe ndent States, dated 18.10.2011 and taking into 
account chapter 8 of the Article XXIV of the Gene ral Agreement on Tariffs and Trade 1994, imports 
of goods originating from Iceland, Liechtenstein,  Norway, Switzerland, Montenegro, Republic of 
Armenia, Kazakhstan, Republic of Azerbaijan, Turkmenistan, Uzbekistan, Tajikistan and 
Kyrgyzstan should be excluded fr om the application of safeguards. 
13  DEVELOPING COUNTRIES TO WHICH THE MEASURE IS NOT APPLIED UNDER 
ARTICLE 9.1 OF THE AGREEMENTS ON SAFEGUARDS 
According to the List of Least Developed Countries of United Nations special safeguards measures 
do not apply to such countries-WTO members as Angola, Bangladesh, Benin, Burkina Faso, Burundi, Cambodia, Chad, Democratic Republic of Congo, Central African Republic, Djibouti , Gambia, Guinea, Guinea-Bissau, Haiti, Lao People's Democratic Republic, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Samoa, Senegal, Sierra 
Leone, Solomon Islands, Tanzania, Togo, Uganda, Vanuatu, Zambia. 
Imports into Ukraine subject to investigation which should be excluded from the application of 
special measures, in 2014 amounted to 0.1% of total imports, and therefore it hasn't influenced on 
the main conclusions in the Ministry concerning the fact of the imports growth as a result of which 
there was a substantial injury to domestic industry. 
14  PUBLICLY AVAILABLE DOCUMENT CONTAI NING THE RELEVANT DECISION MADE BY 
THE COMPETENT AUTHORITY IS ATTACHED, IN AN ELECTRONIC FORM, AND CAN BE 
FOUND BY THE FOLLOWING LINK 
http://ukurier.gov.ua/uk/articles/mizhvidomcha-komisiya-z-mizhnarodnoyi-torgivli-inf/  
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