G/SG/N/8/UKR/1/Suppl.4  
G/SG/N/14/UKR/1/Suppl.3  
 
31 March 2015  
(15-1796)  Page: 1/6  
Committee on Safeguards  Original: English  
 
 NOTIFICATIONS UNDER ARTICLE 12.1(B)  TO THE COMMITTEE ON SAFEGUARDS 
ON FINDING A SERIOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED IMPORTS  
 
NOTIFICATION UNDER ARTICLE 12.1(A) OF THE AGREEMENT  
ON SAFEGUARDS ON INITIATI ON OF AN INVESTIGATION  
AND THE REASONS FOR IT 
UKRAINE  
(Casing and pump-compressor seamless steel pipes) 
The following communication, dated 30 March 2015, is being circulated at the request of the 
Delegation of Ukraine. 
 
_______________ 
 
 
As a results of investigation the Interdepartmental Commission on International Trade (hereinafter - Commission) has taken its decision № SP-182/2008/143-31 of 23.07.2008 "On the 
application of special measures on imports of casing and pump-compressor seamless steel pipes 
regardless of country of origin and exports".  Measures have been applied for three years from 1 October 2008 to 30 September 2011 by the 
introduction of import quotas. Annual special import quota amounted to 14,504 tons in the first 
year period. There were also gradual liberalization measures applied by increasing the annual special quota by 5% - up to 15,230 tons for the second year period, and by 10% - to 15,955 tons 
in the third year period.  
 Measures had been applied to imports of goods to  Ukraine of the following description: casing and 
pump-compressor seamless steel pipes with the outer diameter not exceeding 406.4 mm, 
classified under the UKTZED
1 code 7304 29 11 00. After following nomenclature changes the 
goods are classified under UKTZED codes 7304 29 10 00 and 7304 29 30 00.  
Relevant notifications under article 12.1(a) and (b): 
G/SG/N/6/UKR/1-G/SG/N/8/UKR/1-G/SG/N/10/UKR/1 of 22 August 2008.  
On 30 September 2011 by its Decision № SP – 261/2011/4423-28 the Commission extended 
application of measures for 3 years with gradual liberalisation of import quota from 16,753 tons (1 October 2011 – 30 September 2012) to 17,591 tons (1 October 2012 – 30 September 2013) 
and finally to 18,471 tons (1 October 2013 – 30 September 2014). 
 Relevant notifications are: G/SG/N/8/UKR/1/Suppl.1-G/SG/N/14/UKR/1 of 31 October 2011 and G/SG/N/8/UKR/1/Suppl.2-G/SG/N/14/UKR/1/Suppl.1 of 30 July 2013, 
G/SG/N/8/UKR/1/Suppl.2/Corr.1-G/SG/N/14/UKR/1/Suppl.1/Corr.1 of 8 August 2013. 
 On 29 September 2014 the Commission has taken its decision № SP-323/2014/4421-06 
concerning initiation of the review of applicatio n of special measures and their extension for the 
period of review (6 months). 
                                               
1 UKTZED is the Ukrainian Foreign Economic Activity Commodity Classification, was based on 
Harmonized System 2002 in that time. Since 2014 it is based on HS2012. G/SG/N/8/UKR/1/Suppl.4 • G/SG/N/14/UKR/1/Suppl.3 
 
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  Relevant notification is: G/SG/N/8/UKR/1/Suppl.3-G/SG/N/14/UKR/1/Suppl.2 of 6 October 2014. 
 1  EVIDENCE, RELEVANT DATA AND THE APPLICABLE PERIOD OF REVIEW OF SAFEGUARD MEASURE CONTINUES TO BE NECESSARY TO PREVENT OR REMEDY SERIOUS 
INJURY 
Period of review investigation was determined  from 1 October 2011 till 30 September 2014. 
 
Table 1 
Indicators ІV quarter 2011 
– 
IIІ quarter 2012 ІV quarter 2012 
– 
III quarter 2013 ІV quarter 2013 
– 
III quarter 2014 
Sales of goods produced by domestic  industry on domestic market  
Sales, tons [ ] [ ] [ ] 
Relative indicators, % 100 58.1 58.7 
Rate of the increase/decrease, % - -41.9 -41.3 
Domestic industry share on the domestic market 
Share, % [ ] [ ] [ ] 
Relative indicators, % 100 92.31 89.43 
Rate of the increase/decrease, % - -7.69 -10.57 
Production  
Production, tons [ ] [ ] [ ] 
Relative indicators, % 100 80 83 
Rate of the increase/decrease, % - -20 -17 
Capacity utilization  
Capacity utilization rate, % [ ] [ ] [ ] 
Relative indicators, % 100 81.42 83.02 
Rate of the increase/decrease, % - -18.58 -16.98 
Productivity 
Productivity, tons/person [ ] [ ] [ ] 
Relative indicators, % 100 78 92 
Rate of the increase/d ecrease, % - -22 -8 
Gross profits/losses at domestic market sales 
Dollars USA [ ] [ ] [ ] 
Relative indicators, % 100 55.16 45.67 
Rate of the increase/decrease, % - -44.84 -54.37 
Domestic industry employment 
Employment, persons. [ ] [ ]  
Relative indicators, % 100 93.82 79.76 
Rate of the increase/decrease, % - -6.18 -21.24 
 
On the basis of analysis of these main economic and social indicators for the domestic industry 
there were made the following conclusions.  The share of domestic industry on the domest ic market has decreased in IV quarter 2013 – 
III quarter 2014 period by 10.6%, as compared to IV quarter 2011 – III quarter 2012 period.  
 The production of the domestic industry has de creased in the period of IV quarter 2013 – 
III quarter 2014 by 17% as compared to IV quarter 2011 – III quarter 2012 period. 
 The capacity utilization rate has decreased in IV quarter 2013 – III quarter 2014 by 17% as 
compared to IV quarter 2011 – III quarter 2012 period. 
 The productivity rate has decreased in the peri od of IV quarter 2013 – III quarter 2014 by 8% as 
compared to IV quarter 2011 – III quarter 2012 period. 
 G/SG/N/8/UKR/1/Suppl.4 • G/SG/N/14/UKR/1/Suppl.3 
 
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  The domestic industry gross profitability at domestic market sales has decreased in 
IV quarter 2014 - III quarter 2013 period by 54% as compared to IV quarter 2011 – 
III quarter 2012 period.  
Domestic industry employment has decreased by 21% in IV quarter 2013 - III quarter 2014 
period, as compared to the period of IV quarter 2011 – III quarter 2012.  
Domestic industry employment has decreased by 21% in IV quarter 2013 - III quarter 2014 
period, as compared to the period of IV quarter 2011 – III quarter 2012.  Evidence that the safeguard measure conti nues to be necessary to prevent serious 
injury  
 
If the safeguard measures are ceased to apply, the probability of serious injury to domestic 
industry is supported by the world trends in de velopment of production capacity for oil & gas 
pipes. It concerns increasing capacity of existi ng enterprises and establishment of new production 
enterprises in Russian Federation, China, USA,  Brazil, Mexico, Kazakhstan and Saudi Arabia. 
 
There is a significant risk of a sharp decline in o il prices. The plants make steel pipe and tube for 
oil and gas exploration and drilling. With oil prices more than 5 year lows and hovering around $50 
a barrel, energy companies have far less incentive to drill for new supply, reducing demand for the 
plant's products. Global capital expenditures for oil and gas exploration and production projects 
are expected to drop by 30% - 50% that could lead to a reduction in global demand for casing and tubing pipes by 10-30%. 
 
The global market trends for OCTG tubing and casing for balance between the demand and supply 
concurrently with the practice of some countries and unions, including the 
Eurasian Economic Union, the European Union, the United States, Canada and India, to apply 
trade remedies measures to protect the internal markets, may lead to a redistribution of consumption in Ukraine's domestic market for imported goods if the acting safeguards measures will be terminated. 
 
In view of the above mentioned information, there st ill exists the need to extend the application of 
safeguard measures on imports to Ukraine casing and pump-compressor seamless steel pipes to 
prevent substantial injury to domestic industry. 
 
2  INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN IMPORTS OR AN 
INCREASE IN IMPORTS RELATIVE TO DOMESTIC PRODUCTION 
Table 2 
Indicators ІV quarter 2011 
– 
IIІ quarter 2012 ІV quarter 2012 
– 
III quarter 2013 ІV quarter 2013 
– 
III quarter 2014 
Import of goods to Ukraine 
Total imports, tons 11,559 10,433 12,116.5 
Relative indicators, % 100 90.26 104.82 
Rate of the increase/decrease, % - -9.74 4.82 
Imports relative to producti on of domestic industry 
Share, % [ ] [ ] [ ] 
Relative indicators, % 100 112.53 126.74 
Rate of the increase/decrease, %  - 12.53 26.74 
Share of import in consumption of goods on domestic market 
Share, % [ ] [ ] [ ] 
Relative indicators, % 100  143.33 159.6 
Rate of the increase/decrease, % - 43.33 59.6 
 
Considering the data in Table 2, there were made the following conclusions. 
 During the investigated period the import of goods to Ukraine decreased by 9.74% in 
ІV quarter 2012 – II І quarter 2013 period, but in the period of IV quarter 2013 – III quarter 2014 
it was increased by 4.82%, as compared with ІV quarter 2011 – II І quarter 2012 period.  G/SG/N/8/UKR/1/Suppl.4 • G/SG/N/14/UKR/1/Suppl.3 
 
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  There is a tendency of increasing imports compared to the domestic production. In the period of 
ІV quarter 2013 – II І quarter 2014 the share of import to the domestic production has increased 
by 26.7% as compared to ІV quarter 2011 – II І quarter 2012 period. 
 
Share of import in consumption on domestic market has increased by 59.6 % in ІV quarter 2013 – 
IIІ quarter 2014 period as compared to ІV quarter 2011 – II І quarter 2012 period. 
 
3  DESCRIPTION OF THE PRODUCT INVOLVED 
Casing and pump-compressor seamless steel pipes with the outer diameter not 
exceeding 406.4 mm, classified under the UKTZED codes 7304 29 10 00 and 7304 29 30 00.  
4  DESCRIPTION OF ANY PART OF THE IMPO RTED PRODUCT THAT WILL NO LONGER BE 
SUBJECT TO THE MEASURE 
Not applicable. 
 
5  PRECISE DESCRIPTION OF THE PROPOSED MEASURE 
Extension of import quotas for 18 months period with further liberalization. Import quotas are 
administered through the issuance by the Ministry  of Economic Development and Trade of Ukraine 
of special licenses. The special quota is allocated as follows:  
Country of export Period quota, tons 
(01.04.2015 - 30.09.2015) Period quota, tons 
(01.10.2015 - 30.09.2016) 
Russian Federation 6,830 13,865 
Austria 1,408 2,858 
Poland 632 1,284 
Romania 121 245 
Slovak Republic 98 199 
India 41 84 
China 28 56 
Other countries 450 914 
Altogether 9,608 19,504 
 
6  DATE OF INTRODUCTION OF THE MEASURE 
Following the notice in official edition of Ukraine. 
 
7  EXPECTED DURATION OF THE MEASURE 
18 months, from 1 April 2015 till 30 September 2016. 
 
8  DURATION OF THE MEASURE IS LESS THAN THREE YEARS  
Expected duration of the safeguard measure - 18 months. 
 9  EXPECTED TIMETABLE FOR PROGRESSIVE LIBERALIZATION OF THE MEASURE 
Gradual liberalization of safeguard measure is provided by increasing the special quota volume 
by 3%.  G/SG/N/8/UKR/1/Suppl.4 • G/SG/N/14/UKR/1/Suppl.3 
 
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  10  THE DEADLINE FOR INTERESTED PARTIES FOR PRIOR CONSULTATIONS WITH 
THOSE MEMBERS HAVING A SUBSTANTIAL INTEREST AS EXPORTERS OF THE PRODUCT CONCERNED 
30 days from the date of this notification. 
 
11  INFORMATION PROVIDED IF THE MEASURE IS BEING EXTENDED  
i. evidence that the industry concerned is adjusting and that the safeguard measure 
continues to be necessary to prevent or remedy serious injury 
Evidence that the safeguard measure continues to be necessary to prevent or remedy serious 
injury is provided in section 1,2.  
Evidence that the industry concerned is adjusting: 
 Within ІV quarter 2011 – II І quarter 2014 the domestic industry made significant investments into 
production of casing and pump-compressor seamless steel pipes.  
 During this period the domestic industry has started operating the largest electric steel-melting 
complex for production of round steel billets in  the Eastern Europe. "Interpipe Steel" has been 
designed to provide the Ukrainian's pipe production  with its own steel billets. This project allowed 
for the complete production cycle of pipes - from  scrap metal to the finished pipe products.  
 
The domestic industry produces seamless pipes under national and international standards for 
petroleum refining, petrochemical, oil and gas and power industries. The Ukrainian companies continue to improve the quality of their products under the international standards, for example, 
API standards. 
 Ukrainian producers conduct research on development of new premium connections for casing and 
pump-compressor pipes according to standards API 5C5/ISO 13679.  
 Thus the domestic producer effectively conducts planned adjustment activities while there is a need for safeguard for next one an d half years for their completion. 
 
ii. reference to the WTO document that notified the initial application of the measure; 
G/SG/N/6/UKR/1-G/SG/N/8/UKR/1-G/SG/N/10/UKR/1 of 22 August 2008 
 
iii. duration of the measure from initial application till the date at which it will be 
extended 
8 years. 
 
iv. precise description of the measure in place prior to the date of extension 
The extension of the measure in respect of import to Ukraine of casing and pump-compressor 
seamless steel pipes with the outer  diameter not exceeding 406,4 mm was implemented in 
accordance with the Decision № SP – 261/2011/4423-28 of 30.09.11 of the Commission from the 
date of publication (the notice was published on 4 October 2011 in "Uryadoviy Courier" No 182). 
 
Annual volume of special quota for imports of goods to Ukraine in the fourth year period (01.10.2011 - 09.30.2012) was 16,753 tons. Gradual liberalization of measures was provided by 
increasing the annual special quota by 5% - up to 16,753 tons in the fourth year period, 5% - to 
17,591 tons for the fifth year period and 5% to 18,471 tons at the sixth year period.  G/SG/N/8/UKR/1/Suppl.4 • G/SG/N/14/UKR/1/Suppl.3 
 
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  Annual amount of special quota was allocated as follows: 
 
Country of export Fourth year period quota, 
tons 
(01.10. 2011 - 
30.09.2012) Fifth year period quota, 
tons (01.10.2012- 
30.09.2013) Sixth year period 
quota, tons 
(01.10.2013- 
30.09.2014) 
Russian Federation 11,910 12,506 13,131 
Austria 2,455 2,577 2,706 
Poland 1,103 1,158 1,216 
Romania 209 220 231 
Slovakia 171 180 188 
India 73 76 80 
China 49 51 53 
Other countries 783 823 866 
 
The safeguard measures were extended for 6 months from 1 October 2014 in accordance with the Decision № SP – № 323/2014/4421-06 of 29.09.14 of the Commission (the notice was published 
on 1 October 2014 in "Uryadoviy Courier" No 180). 
 Gradual liberalization of measures is provided through increasing the annual special quota by 1%  
 
Exporting country Quota for the period 01.10.2014 - 31.03.2015 
Russian Federation 6,631 
Austria 1,367 
Poland 614 
Romania 117 
Slovak Republic 95 
India 40 
China 27 
Other 437 
Total 9,328 
 
 12   i. The major exporting Members of imports of the product involved  
Russian Federation, Austria, Poland, Romania, Slovak Republic. 
 
ii. not applicable. 
__________