G/SG/N/8/UKR/6  
G/SG/N/10/UKR/6  
G/SG/N/11/UKR/4  
 
13 July 2018  
(18-4386) Page: 1/8 
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER A RTICLE 12.1(B) OF TH E AGREEMENT  
ON SAFEGUARDS ON FIN DING A SERIOUS INJUR Y OR  
THREAT THEREOF CAUSE D BY INCREASED IMPOR TS 
 
NOTIFICATION UNDER A RTICLE 12.1(С) OF TH E  
AGREEMENT ON SAFEGUA RDS  
 
NOTIFICATION PURSUAN T TO ARTICLE 9, FOOT NOTE 2 
OF THE AGREEMENT ON SAFEGUARDS  
UKRAINE  
(Sulfuric acid and oleum ) 
The following communication, dated 10 July 2018 , is being ci rculated at the request of the 
Delegation of Ukraine . 
 
_______________  
 
 
On 31 July 2017 the Interdepartmental Commission of Foreign Trade (hereinafter Commission) 
took the decision "On initiation and conduction of safeguard investigation on import in Ukraine of 
the sulfuric acid and oleum regardless of country of origin and ex port" No. SP–377/2017/4411 -05 
(G/SG/N/6/UKR/12 of 21 August 2017). On 10 August 201 7 the abovementioned decision was 
published in the newspaper "Uryadovyi Courier " No. 148. 
 
The investigation has been initiated pursuant to the application of the State Ente rprise "Eastern 
Mining and Processing Plant", Public Joint Stock Company "Sumykhimprom", Limited Liability 
Company "Scientific -Production Enterprise" Zorya"  and Limited Liability Company"  First Chemical 
Association" (hereafter – the Applicant).  
 
Taking int o consideration that collective output of these entities in production of like products 
constitutes a major proportion of the total domestic production of those products (more than 
50%), these entities represent the domestic industry in the meaning of the Article 4.1.(C) of the 
Agreement on Safeguards.  
 
On 20 April 2018 Commission took the decision No. SP-388/2018/4411 -05, which extended to 330 
days the safeguard investigation on imports in Ukraine of sulfuric acid and oleum regardless of 
country of origin and export. This decision was published in the newspaper "Uryadovyi Courier " 
No. 82 as of 27 April 2018.  
 
On 2 July 2018 the Commission took the Decision No. SP-391/2018/4411 -05 on application of 
safeguard measures on imports into Ukraine of sulfuric acid and oleum regardless of country of 
origin and export.  
 
Notice on the Decision No. SP-391/2018/4411 -05 on application of safeguard measures on imports 
into Ukraine of sulfuric acid and oleum regardless of country of origin and export was published in 
the newspaper "Uryadovyi Courier " No. 122 as of 04.07.2018.  G/SG/N/8/UKR/6 • G/SG/N/10/UKR/6 • G/SG/N/11/UKR/4  
 
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1. Evidence of serious injury or  threat thereof caused by increased imports  
 
a. Evidence of serious injury  
In order to determine the serious injury to domestic production of like product in Ukraine as a 
result of growing imports into Ukraine, an evaluation of all relevant factors of an obje ctive and 
quantifiable nature affecting the situation in this industry has been undertaken.  
 
The period of investigation was from 1 July 2012 till 30 June 2017.  
 
During this period, an evaluation of growth of imports into Ukraine has been carried out, as w ell as 
the state of industrial, commercial and financial situation of the domestic industry. This period of 
investigation consists of five comparable periods: 1 July 2012 – 30 June 2013 (1st period), 
1 July 2013 – 30 June 2014 (2nd period),  1 July 2014 – 30 June 2015 (3rd period),  1 July 2015 – 
30 June 2016 (4th period),  1 July 2016 – 30 June 2017 (5th period).  
 
Taking into account that the individual enterprises of the applicant carried out the production of 
the goods on captive market, the average weight ed selling prices of such goods were investigated 
for the final consumer in the Ukrainian market, and such indicators as cost, profit/loss and 
profitability from the sale of a unit of the like product in the domestic market – on the information 
of the appl icant's enterprises, who carried out production and sale on free market conditions.  
 
Indicators on production, production capacity, use of production capacities, balances, share of 
sales in the total production of the national producer, the share of such g oods in consumption, 
excluding own consumption, employment, labor productivity, volume of investments made and 
volumes of own consumption, were investigated on the basis of aggregate data of the applicant . 
 
Analysis has shown, that during the period of inv estigation:  
 
- Applicant 's production of goods in 5th period compared to 4th period decreased by 11.74%, 
and compared to 1st period decreased by 26.54%;  
- Applicant 's percentage of capacity utilization in 5th period compared to 4th period decreased 
by 12.21%, compared to 1st period by 26.95%;  
- Applicant 's sales of goods on the domestic market in 5th period compared to 4th period 
decreased by 25.52%, and compared to 1st period increased by 6.47%;  
- total amount of stock of goods at the end of period in 5th period c ompared to 4th period 
increased by 16.26%, in 5th period compared to 1st period decreased by 6.48%;  
- employment rate on the Applicant 's enterprises in 5th period compared to 4th period 
decreased by 5.27%, in 5th period compared to base period – by 13.14%;  
- liquidity index in 5th period compared to 4th period decreased by 6.45%, in 5th period 
compared to 1st period – by 43.14%;  
- applicant 's income from goods sales on the domestic market produced and sold on free 
market in 5th period compared to 4th period decreased by 72.58%, in 5th period compared 
to 3rd period – by 25.77%;  
- applicant's income from goods sales on the domestic market produced and sold on captive 
market was negative during the period of investigation;  
- share in consumption excluding own consumption in 5th period compared to 4th period 
decreased by 13.05%, in 5th period compared to 1st period – by 16.82%;  
- enterprises of the Applicant haven 't had capital investment profit.  
  G/SG/N/8/UKR/6 • G/SG/N/10/UKR/6 • G/SG/N/11/UKR/4  
 
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  Table 1.a.1 
Indicator  1st 
period  2nd 
period  3rd 
period  4th 
period  5th 
period  
Quantity of production  
Dynamics compared to previous period, %  100 -23.03  6.63 1.40 -11.74  
Dynamics compared to base period, %  - -23.03  -17.92  -16.77  -26.54  
Production capacity  
Dynamics compared to previous period, %  100 0.00 0.00 0.17 0.40 
Dynamics compared to base period, %  - 0.00 0.00 0.17 0.57 
Utilization of production capacity  
Dynamics compared to previous period, %  100 -23.05  6.60 1.43 -12.21  
Dynamics compared to base period, %  - -23.05  -17.97  -16.80  -26.95  
Total amount of stock of goods at the end of period  
Dynamics compared to previous period, %  100 33.36  -20.74  -23.89  16.26  
Dynamics compared to base period, %  - 33.36  5.69 -19.56  -6.48 
Sales volume on the domestic market of Ukraine  
Dynamics compared to previous period, %  100 19.84  -6.14 27.08  -25.52  
Dynamics compared to base period, %  - 19.84  12.49  42.94  6.47 
Share in consumption, excluding own consumption  
Dynamics compared to previous period, %  - -62.09  202.13  -16.47  -13.05  
Dynamics compared to base period, % - -62.09  14.52  -4.34 -16.82  
Price on the domestic market of Ukraine  
Dynamics compared to previous period, %  100 -18.43  -16.66  15.01  -19.65  
Dynamics compared to base period, %  - -18.43  -32.02  -21.82  -37.18  
Production cost  
Dynamics compared to previous period, %  100 -18.36  -37.29  -10.15  1.13 
Dynamics compared to base period, %  - -18.36  -48.81  -54.00  -53.48  
Profitability from sales of unit on the domestic market  
Profitability  loss loss profit profit  profit  
Dynamics compared to previous period, %  negative  negative  100 134.07  -63.49  
Dynamics compared to base period, %  negative  negative  - 134.07  -14.55  
Employment , people  
Dynamics compared to previous period, %  100 -2.72 -5.43 -0.33 -5.27 
Dynamics compared to base period, %  - -2.72 -8.01 -8.31 -13.14  
Labour productivity  
Dynamics compared to previous period, %  100 -20.51  7.66 10.30  -2.04 
Dynamics compared to base period, %  - -20.51  -14.42  -5.61 -7.53 
Profit/loss of the domestic producer from sales on the domestic market  
produced and sold on free market  
Profit/loss  loss loss profit  profit  profit  
Dynamics compared to previous period, %  negative  negative  100 170.70  -72.58  
Dynamics compared to base period, %  negative  negative  - 170.70  -25.77  
Profit/loss of the domestic producer from sales on the domestic market  
produced and sold on captive market  
Profit/loss  loss loss loss loss loss 
Dynamics compared to previous period, %  100 -14.81  -56.31  8.98 22.23  
Dynamics compared to base period, %  - -14.81  -62.78  -59.44  -50.42  
Liquidity conditions  
Dynamics compared to previous period, %  100 -78.43  81.82  55.00  -6.45 
Dynamics compared to base period, %  - -78.43  -60.78  -39.22  -43.14  
Investments  
Dynamics compared to previous period, %  100 -83.37  92.98  2.42 -42.89  
Dynamics compared to base period, %  - -83.37  -67.90  -67.12  -81.22  
 
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.  
 
b. Causality and non -attribution analysis  
The impact of rising imports of goods  
 
In the framework of the investigation it was determined that during 1 July 2012 till 30 June 2017:  
 
- price of imports  into Ukraine of goods in 5th period compared to 1st period increased by 
46.80%, in comparison with 4th period – by 9.89%;  G/SG/N/8/UKR/6 • G/SG/N/10/UKR/6 • G/SG/N/11/UKR/4  
 
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  - price of like products in 5th period compared to 1st decreased by 37.18%, in comparison 
with 4th period – by 19.65%;  
- production cost of like products of the domestic producer in 5th period decreased compared 
to 1st period – by 53.48%;  
- prices of imported goods declined to a level lower than prices of like products, though the 
difference between prices decreased totally by 24.07%. 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 im port prices 
and production cost of domestic producers decreased totally by 61.46 %;  
 
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, s ubject to 
investigation, both in absolute and relative terms to production of the domestic industry.  
 
The distribution of the share of imports and the share of the national producer in the consumption 
of goods on the domestic market, excluding their own co nsumption, show that the share of 
imports in consumption increased during the same period (the 5th period), along with a significant 
reduction of the share of the national producer.  
 
The trend of imports growth to Ukraine of goods subject 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 i n consumption in the 
domestic market of Ukraine and, consequently, a decrease in production, capacity utilization 
percentage, increase in finished goods inventory balance, reducing the number of employees in 
Applicant 's enterprises and the liquidity ratio etc. 
 
Table 1.b .1 
Indicator  1st 
period  2nd 
period  3rd 
period  4th 
period  5th 
period  
Import price, US dollars/tonne  54.70 31.46 28.19 32.29 29.10 
Dynamics compared to previous period, %  100 -42.48 -10.41 14.58 -9.89 
Dynamics compared to base period, %  - -42.48 -48.47 -40.96 -46.80 
Like product price on the domestic market of Ukraine  
Dynamics compared to previous period, %  100 -18.43 -16.66 15.01 -19.65 
Dynamics compared to base period, %  - -18.43 -32.02 -21.82 -37.18 
Like product production cost  
Dynamics compared to previous period, %  100 -18.36 -37.29 -10.15 1.13 
Dynamics compared to base period, %  - -18.36 -48.81 -54.00 -53.48 
Difference on which imports prices of goods are lower than like products prices  
Dynamics compared to previous period,  % 100 14.39 -20.95 15.34 -27.19 
Dynamics compared to base period, %  - 14.39 -9.58 4.29 -24.07 
Difference on which imports prices of goods are lower than like products production cost  
Dynamics compared to previous period, %  100 10.43 -54.01 -40.10 26.68 
Dynamics compared to base period, %  - 10.43 -49.22 -69.58 -61.46 
 
Other Factors  
 
In the framework of the investigation the Ministry of Economic Development and Trade of Ukraine 
(hereinafter – 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 a nd decrease the exports volumes of domestic producers.  
 
On the results of the investigation the Ministry determined 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, 
further expansion of production, creation of working places, measures to improve social 
infrastructure of enterprises are planned by national producer. However, d ue to increasing imports G/SG/N/8/UKR/6 • G/SG/N/10/UKR/6 • G/SG/N/11/UKR/4  
 
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  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 e mployees. During the investigation period annual 
investments in production decreased by 81.22%.  
 
Regarding export activity of the domestic producer the Ministry determined that the share of sales 
for export in the total production of the domestic producer decreased by 62.14%, which means the 
wish of the national producer to be more concentrated on the domestic market.  
Thus, other factors didn 't have a determining effect in relation to the impact on socio -economic 
indicators of the domestic producer and caus ing 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 attrib uted 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 Ukrain e under the 
GATT  1994 
 
In accordanc e with Article XIX: 1 of the GATT 1994, the Ministry 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.  
 
Unexpected events of 2014, such as the political situation in Ukraine, annexation of Crimea and 
unpredictable aggressive foreign policy in  the east of Ukraine could not be foreseen. Therewith, 
they have  caused negative consequence s for Ukraine.  
 
In 2014 -2015, the cost of electricity and natural gas has increased significantly in Ukraine, which 
was, in particular, due to unforeseen circumstances that emerged in Ukraine in 2014.  
 
The sharp increase in the volume of production of main products by foreign producers has led to 
an increase in the production of sulfuric acid, which is the result of such production.  
 
At the same time, there was an unexpected loss by foreign exporters from the Russia of the  sales 
markets. One of the main markets for the goods was market of the Republic of Kazakhstan. In 
2013, by JSC "NAK Kazatomprom" – the Kazakh consumer of Russian sulfuric acid was introduced 
its own production capacity of sulfuric acid, which reached to p lanned level capacity in 2014. This 
led to the redirection to the market of Ukraine of significant volumes of goods, which were 
previously exported to the market of the Republic of Kazakhstan. In the 4th period, when the 
production of sulfuric acid by the enterprise of the Republic of Kazakhstan finally reached the 
planned capacity, the volume of import of goods from the Russian Federation increased to 21 609 
tons. 
 
Considering the above, the Commission concluded that these factors led to an unpredictable 
increase in imports and, as a consequence, an imbalance in favor to foreign producers -suppliers of 
goods to Ukraine.  
 
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 investigat ion: 
 
- in absolute terms in 5th period compared 1st period – increased by 420.97 %, and by 0.73 % – 
compared with 4th period;  G/SG/N/8/UKR/6 • G/SG/N/10/UKR/6 • G/SG/N/11/UKR/4  
 
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  - with regard to production of goods in Ukraine in 5th period compared with 4th period – increased 
by 16.05 %; and by 563.62 % in  5th period compared with 1st period;  
- relative to consumption of goods excluding own consumption in 5th period compared with 4th 
period – increased by 17.59 %; and by 317.61 % in 5th period compared with 1st period.  
 
Table 2.1  
Indicator  1st 
period  2nd 
period  3rd 
period  4th 
period  5th 
period  
Total imports of goods in Ukraine subject to investigation  
Imports, tons  13 056  23 202  25 340  67 525  68 017  
Dynamics compared to previous period, %  100 77.71 9.22 166.48 0.73 
Dynamics compared to base period, %  - 77.71 94.09 417.21 420.97 
Imports ratio to production of goods in Ukraine  
Dynamics compared to previous period, %  100 28.68 76.48 151.79 16.05 
Dynamics compared to base period, %  - 28.68 127.10 471.82 563.62 
Imports ratio to consumption of goods in Ukraine excluding own consumption  
Dynamics compared to previous period, %  100 -42.33 251.55 75.16 17.59 
Dynamics compared to base period, %  - -42.33 102.75 255.14 317.61 
Imports ratio to consumption of goods in Ukraine including own consumption  
Dynamics compared to previous period, %  100 27.78 72.76 135.51 13.94 
Dynamics compared to base period, %  - 27.78 120.76 419.91 492.37 
 
3  Precise description of the product involved  
 
Sulfuric acid and oleum imported to Ukraine and classified as per UKTZED code of 2807.00.00.00 
(hereinafter – 'the Product '). 
 
4   Description of any part of the imported goods that will no longer be subject to the 
measure  
 
Not applicable . 
 
5.  Precise description of the proposed measure  
 
The Interdepartmental Commission of Foreign Trade took a decision of 02.07.2018  
No. SP-391/2018/4411 -05 on the application of safeguard measures in a form of quota  on imports 
into Ukraine of goods that are the subject of the investigation.  
 
Table 5.1  
Indicator  Quota  for the 1st 
year period  Quota  for the 2nd 
year period  Quota  for the 3rd 
year period  
Republic of Belarus , tons 30 769  32 307  33 923  
Russian Federation , tons 8 631  9 063  9 516  
Other countries, tons 4 316  4 531 4 758  
 
6.  Proposed date of introduction of the measure  
 
Safeguard measures are coming into force from 1 September 2018.  
 
7.  Expected duration of the measure  
 
Safeguard measures are planned to be imposed for a period of 3 years: 1st year period – 
1 September  2018 – 31 August 2019; 2nd year period – 1 September 2019 – 31 August 2020; 
3rd year period – 1 September 2020 – 31 August 2021.  
 
8.  Proposed date for the review of a measures with a duration of more than three 
years  
 
Not applicable . 
 G/SG/N/8/UKR/6 • G/SG/N/10/UKR/6 • G/SG/N/11/UKR/4  
 
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  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 final safeguard  measures 
will be liberalized by increasing the amount of import of the Product, which is stated in Table 5.1 . 
 
10.  Date of prior consultation with the members having a substantial interest as 
exporters of goods  
 
i. Interested parties may submit comments on  this issue and participate in prior consultations 
before 2 3.07.2018.  
ii. according to the Article 12.3 of the Agreement on Safeguards prior consultation with the 
interested parties, which reveal a substantial interest as exporters of goods, is proposed 
before 09.08.2018  in Kiev (Ukraine).  
Contacts:  
 
Address: Kyiv, 01008, Ukraine, 12/2 M. Hrushevskoho Str.  
E-mail: tradedefence@me.gov.ua , suhanov@me.gov.ua, zaiets@me.gov.ua.  
Tel.: +38 (044) 596 -67-48; +38 (044) 596-67-36 
 
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  
 
i. Major exporting c ountries  
The share of the total imports into Ukraine of products subject to investigation indicated in the 
Table 12.1.  
Table 12.1  
Indicator  1st period  2nd period  3rd period  4th period  5th period  
Amount  of import  by country of origin , tons 
Republic of Belarus  13 028  15 215  23 514  45 878  56 211  
Russian Federation  - 7 961  1 811  21 609  11 775  
EU 27 25 14 38 31 
Other countries  - - 0.18 0.15 0.05 
 
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 Government of Montenegro dated 18.11.2011, Free 
Trade Agreement of the Commonwealth of Independent States, dated 18.10.2011 and taking into 
account chapter 8 of the Article XXIV of the General Agreement on Tariffs and Trade 1994, imports 
of goods originating from Republic of Iceland, Principality of Liechtenstein, Kingdom of Norway, 
Swiss Confederation, Montenegro, Republic of Armenia, Re public of Kazakhstan, Republic of 
Azerbaijan, Turkmenistan, Republic of Uzbekistan, Republic of Tajikistan, Kyrgyz Republic should 
be excluded from the application of safeguards.  
 
13.  Developing countries to which th e measure is not applied under A rticle 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 the Islamic Republic of Afghanistan, the Republic 
of Angola, People's Republ ic of Bangladesh , Republic of Benin, Burkina Faso, Republic of Burundi, 
Kingdom of Cambodia, Republic of Chad, the Democratic Republic of the Congo, Central African 
Republic, Republic of Djibouti, Republic of the Gambia, Republic of Guinea, Republic of Gui nea-
Bissau, Republic of Haiti, Lao People's Democratic Republic , Kingdom of Lesotho, Republic of G/SG/N/8/UKR/6 • G/SG/N/10/UKR/6 • G/SG/N/11/UKR/4  
 
- 8 - 
 
  Liberia, Republic of Madagascar, Republic of Malawi, Republic of Mali, Islamic Republic of 
Mauritania, Republic of Mozambique, Republic of the Union of Myanmar , Federal Democratic 
Republic of Nepal, Republic of the Niger, Republic of Rwanda, Republic of Senegal, Republic of 
Sierra Leone, Solomon Islands, United Republic of Tanzania, Togolese Republic, Republic of 
Uganda, Republic of Vanuatu, Republic of Yemen, R epublic of Zambia.  
 
Imports into Ukraine subject to investigation which should be excluded from the application of 
special measures didn 't happen, so 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 containing the relevant decision made by the 
competent authority is attached, in an electronic form, and can be found by the 
following link:  
https://bit.ly/2KM2G0u . 
 
 
__________