WORLD TRADE  
ORGANIZATION  G/SG/N/6/UKR/1 
G/SG/N/8/UKR/1 
G/SG/N/10/UKR/1 
22 August 2008 
 (08-3948) 
Committee on Safeguards Original:   English 
  
 
NOTIFICATION UNDER ARTICLE 12.1(A) OF THE AGREEMENT ON  
SAFEGUARDS ON INITIATION OF AN INVESTIGATION AND  
THE REASONS FOR IT 
 
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT 
ON SAFEGUARDS ON FINDING A SERIOUS INJURY OR  
THREAT THEREOF CAUSED BY INCREASED IMPORTS 
 
NOTIFICATION PURSUANT TO ARTICLE 12.1(C) 
OF THE AGREEMENT ON SAFEGUARDS 
 
 
UKRAINE 
 
(Casing and pump-compressor seamless steel pipes) 
 
 
  The following communication, dated 30 July 2008, is being circulated at the request of the Delegation of Ukraine.  
_______________ 
 
  Pursuant to Article 12.1(b) and (c) of the Agreement on Safeguards and using the format 
adopted by the Committee on Safeguards (G/SG/1), Uk raine hereby gives notification, as follows.   
 
On 1 September 2007, a safeguards investigat ory process was initiated relating imports to 
Ukraine of casing and pump-compressor seamless st eel pipes (the "Pipes") irrespective of their 
country of origin and export.    
The investigation was instituted following the claim by OJSC "Interpipe Nizhniodniprovsky 
Pipe-Rolling Works" and CJSC Interpipe Nikopol  Seamless Pipe Works "Niko Tube" (the 
"Applicant").  With regard to the fact that th ese enterprises account for 100  per cent of industrial 
output of such goods in the territory of Ukraine,  these enterprises constitute an industry of domestic 
production of like goods in Ukraine in the sense of Ar ticle 4.1(c) of the Agreement on Safeguards.   G/SG/N/6/UKR/1 
G/SG/N/8/UKR/1 G/SG/N/10/UKR/1 
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  On 5 September 2007, the Ministry of Foreign Affairs of Ukraine notified the following 
embassies of exporting countries of the initiation and the ongoing inves tigation (note No. 51/23-
3252):   
 
Embassy of the Republic of Austria in Ukraine;   Embassy of the Republic of Belarus in Ukraine;   Embassy of the Republic of Italy in Ukraine;   Embassy of the Republic of Kazakhstan in Ukraine;   
Embassy of the People's Republic of China in Ukraine;   
Embassy of the Kingdom of the Netherlands in Ukraine;   Embassy of the Federal Republic of Germany in Ukraine;   Embassy of the Republic of Poland in Ukraine;   Embassy of the Russian Federation in Ukraine;   
Embassy of Romania in Ukraine;   
Embassy of the Republic of Slovakia in Ukraine;   Delegation of the European Commission to Ukraine.   
  G/SG/N/6/UKR/1 
 G/SG/N/8/UKR/1 
 G/SG/N/10/UKR/1 
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  1. EVIDENCE OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY 
INCREASED IMPORTS 
A. E
VIDENCE OF SERIOUS INJURY  
To establish the fact of inflicting serious inju ry to the domestic industry producing like goods 
in Ukraine as a result of growing imports to Ukraine of Pipes, all relevant factors of objective and 
quantitative nature have been considered impa cting the situation in this industry.   
 
The dynamics of growing imports to Ukraine of  Pipes and the industrial, trade and financial 
situation of the domestic manufacturing industry w as investigated in the period 2004 – 2006.  The 
following assessment is based upon Applicant's data, t hose of other interested parties who cooperated 
with the body responsible for conducting the inves tigation as well as Ukrainian executive authorities 
(Table No. 1).    
Table No. 1
 
 
 2004  2005 2006 
Volumes of Pipe consumption in Ukraine  
Relevant indicators, % 100.00% 97.00% 129.18% 
Growth/ decline rate, % - -3.00% 29.18% 
Volumes of Applicant's Pipe sales in  the domestic market of Ukraine 
Relevant indicators, % 100.00% 87.13% 118.10% 
Growth/ decline rate, % - -12.87% 18.10% 
Balances at Applicant's warehouses (as of the end of the period) 
Relevant indicators, % 100.00% 148.98% 163.88% 
Growth/ decline rate, % - 48.98% 63.88% 
Share of Applicant's Pipe sales in the domestic market of Ukraine 
Relevant indicators, % 100.00% 89.82% 91.42% 
Growth/ decline rate, % - -10.18% -8.58% 
Applicant's profitability from pipe sales in the domestic  
market of Ukraine 
Relevant indicators, % 100.00% 151.41% 32.21% 
Growth/ decline rate, % - 51.41% -67.79% 
Applicant's profits from pipe sales in the domestic market of Ukraine 
Relevant indicators, % 100.00% 153.35% 54.33% 
Growth/ decline rate, % - 53.35% -45.67% 
Employment at Applicant's enterprises in manufacturing and selling  Pipes produced by the Applicant 
Relevant indicators, % 100.00% 107.21% 90.77% 
Growth/ decline rate, % - 7.21% -9.23% 
 G/SG/N/6/UKR/1 
G/SG/N/8/UKR/1 G/SG/N/10/UKR/1 
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  The survey established that during the period under investigation Pipe imports to Ukraine 
were growing irrespective of the country of origin  and export, and this growth occurred under such 
conditions and in such volumes that it caused inju ry to the domestic industry manufacturing of like 
products, namely:   
 
- the share of the domestic industry in consuming Pipes in Ukraine decreased by 9 per cent;   
- the level of Pipe balances at warehouses of in dustry enterprises increased by 64 per cent;   
- the level of profitability from selling Pipes of industry enterprises in the domestic market 
decreased by 68 per cent;   
- the level of industry profits from selling Pipes in the domestic market of Ukraine decreased 
by 46 per cent;   
- employment at industry enterprises in manufacturing and selling Pipes decreased by 9 per 
cent.   
 
Conclusion 
 
 The conducted survey shows the trend towards deteriorating indicators of the domestic industry in the period under investigation includi ng its decreasing share in the domestic market, 
increased warehouse balances, decreased profitabilit y and amounts of profit from selling of like goods 
in the domestic market, decreased level of employment.   
  Given this, Pipe imports to Ukraine in the pe riod under investigation increased in absolute 
and relative terms in relation to volumes of produc tion and consumption of Pipes in Ukraine.   
 
 With regard to the above, the body responsible for investigations concluded that the domestic 
industry suffered a material injury as a result of growing imports.    B. A
N ANALYSIS OF CAUSES AND EFFECTS  
1. An analysis of causes 
- Impact of growing imports.   
 
 During the period under investigation, while the overall consumption decreased, the trend of 
constantly growing Pipe im ports to Ukraine was observed.  In absolute terms, Pipe imports increased 
in 2006 by 68.74 per cent as compared to 2004.  As  a result, the share of imports in the consumption 
of Pipes in Ukraine during the period under inves tigation increased by 30.62 per cent.  The proportion 
of pipe imports in the volume of domestic indus try output in 2006 increased by 35.61 per cent as 
compared to 2004.     The conducted survey established that decreased  prices of Pipe imports to Ukraine as 
compared to the sale price in the domestic market of Ukraine of Pi pes manufactured by the Applicant 
in the period under investigation prevented price incr eases of Applicant's Pipes in the domestic market 
of Ukraine, which could have occurred in  the conditions of ordinary trade.   
  Therefore, the investigation established that there is a cause-and-effect relation between the 
growing Pipe imports to Ukraine and the cond itions under which it occurred and the causing of a 
significant injury to the domestic industry.    G/SG/N/6/UKR/1 
 G/SG/N/8/UKR/1 
 G/SG/N/10/UKR/1 
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  - Other factors:   
 
а) An impact of changes in consumption:  the demand for the products under 
consideration did not decrease in the period of the survey.   
b) Impact of competition among domestic producers:  the proportion of the Applicant in 
the national output of like products is 100 pe r cent.  Therefore, there is no impact of 
competition from other Ukrainian producers.   
c) The range of domestic products:  the domes tic industry is capable of satisfying the 
existing demand of Pipe consumers in Ukraine.   
d) Directly competitive products and changed preferences of consumers:  there are no 
other products that may replace Pipes.  In this connection, respectively, it is not possible to determine the impact of ch anges in consumer preferences upon the 
domestic industry.   
e) Insufficient productive capacity:  the domes tic industry has sufficient capacity to 
satisfy the domestic demand.   
f) Impact of changed export trends:  the body responsible for conducting the 
investigation established that changes in e xport trends did not have any impact upon 
deteriorating indicators of the domestic industry.   
 2. Conclusion regarding cause-and-effect relation 
Having considered the possible impact of othe r known factors, the body that conducted the 
investigation confirmed the fact that there is a cause-and-effect relation be tween growing imports and 
the serious injury inflicted to the domestic industry.    2. INFORMATION SHOWING WHETHER THERE IS AN ABSOLUTE INCREASE IN 
IMPORTS OR AN INCREASE IN IMPORTS IN RELATION TO THE VOLUMES OF DOMESTIC PRODUCTION AND CONSUMPTION 
 In the course of investigation an analysis wa s performed of whether there was an increase, 
during the period under investigation, of Pipe im ports to Ukraine relative to the production and 
consumption of Pipes in Ukraine.   
 
 Such analysis was performed based on data of the State Customs Service of Ukraine and 
Applicant's information (Table No. 2).   G/SG/N/6/UKR/1 
G/SG/N/8/UKR/1 G/SG/N/10/UKR/1 
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  Table No. 2
 
 
 2004  2005  2006 
Volumes of Pipe consumption in Ukraine  
Relevant indicators, % 100.00% 97.00% 129.18% 
Growth/ decline rate, % - -3.00% 29.18% 
Volumes of Pipe imports to Ukraine 
Quantity, tons  10 851.26 14 349.75 18 310.06 
Relevant indicators, % 100.00% 132.24% 168.74% 
Growth/ decline rate, % - 32.24% 68.74% 
Proportion of imports in Pipe consumption in Ukraine 
Proportion*, % 23.41%* 31.92%* 30.58%* 
Relevant indicators, % 100.00% 136.33% 130.62% 
Growth/ decline rate, % - 36.33% 30.62% 
Proportion of imports to Ukraine in Applicant's Pipe production 
Proportion*, % 4.53%* 4.81%* 6.16%* 
Relevant indicators, % 100.00% 105.90% 135.61% 
Growth/ decline rate, % - 5.90% 35.61% 
 
Conclusion  
 During the period under investigation (2004-2006) , Pipe imports to Ukraine increased in 
absolute and relative terms in relation to the volum e of production and consumption of such products 
in Ukraine.   
 
3. SPECIFIC DESCRIPTION OF THE GOODS IN QUESTION 
The measures concern imports to Ukraine of goods  irrespective of their country of origin and 
export.  The goods are describes as follows:  casing and pump-compressor seamless steel pipes with the outer diameter up to 406.4 mm classified in ac cordance with the Ukrainian classification of goods 
in foreign economic activity by the code 7304 29 11 00.   
 
4. SPECIFIC DESCRIPTION OF THE MEASURE APPLIED 
The Interdepartmental Commission On Intern ational Trade approved the resolution of 
23 July 2008 No. СП–182/2008/143-31 "On applying special measures to imports to Ukraine of 
casing and pump-compressor seamless steel pipes irrespec tive of their country of origin and export".   
 
The special measures are applied by introducin g quotas on Pipe imports to Ukraine.   
 
The level of quota was calculated as arithmetic me an indicator of Pipe imports over the last 
three representative years, which relevant data we re studied in the course of investigation.   
 
However, to have regard to the interests of th e countries that are traditional suppliers of Pipes 
to Ukraine, the arithmetic mean proportion was calcu lated in the overall imports of Pipes to Ukraine 
                                                     
 
* To maintain confidentiality of information, this indicator fluctuates between +/- 10 per cent.    G/SG/N/6/UKR/1 
 G/SG/N/8/UKR/1 
 G/SG/N/10/UKR/1 
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  in the period under investigation that each of the main exporting countries accounted for as well as the 
total share in Pipe imports to Ukraine of other countries (whose share did not exceed 1 per cent).   
 
The annual volume of the special quota on Pipe imports to Ukraine is 14 504 tons.   
 
The established quota was allocated as follows:   
 
 Annual quota, tons 
Russian Federation 10311 
Austria 2125 
Poland 955 
Romania 181 
Slovakia 148 
India 63 
People's Republic of China 42 
Other countries 679 
Total 14504 
 
 
Quoting of Pipe imports to Ukraine is carried out through the issuance by the Ministry of 
Economy of Ukraine of special licenses.   
 
Pipe imports to Ukraine must be accompanied by submitting the special license and the 
certificate of origin.   
 
5. DATE OF APPLYING THE MEASURE 
1 October 2008.   
 
6. PERIOD OF APPLYING THE MEASURE 
The special measures are applied for the term of three (3) years, from 1 October 2008 through 
30 September 2011.   
 
7. THE ESTABLISHED DATE OF REVIEW FOR THE MEASURES WHOSE TERM 
EXCEEDS THREE (3) YEARS 
The term of validity of the measures does not exceed three (3) years.   
 8. THE EXPECTED SCHEDULE OF PHASED LIBERALIZATION OF THE 
MEASURE 
A phased liberalization of the applied special measures is stipulated through increasing the 
annual volume of the special quota by 5 per cent - to 15230 tons for the second-year period and 
by 10 per cent - to 15955 tons for the third-year period.    G/SG/N/6/UKR/1 
G/SG/N/8/UKR/1 G/SG/N/10/UKR/1 
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  The annual volumes of the special quota with re gard to the liberalization are allocated as 
follows:    
 
Exporting country Quota for the first-
year period 
(01.10.2008 - 
30.09.2009), tons Quota for the 
second-year 
period 
(01.10.2009- 
30.09.2010), tons Quota for the third-
year period 
(01.10.2010- 
30.09.2011), tons 
Russian Federation 10311 10827 11342 
Austria 2125 2231 2337 
Poland 955 1003 1051 
Romania 181 190 200 
Slovakia 148 156 163 
India 63 66 69 
People's Republic of China 42 44 46 
Other countries 679 713 747 
 
 
 
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