WORLD TRADE  
ORGANIZATION  G/SCM/Q2/UKR/4 
4 November 2008 
 (08-5363) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
Replies to Questions from TURKEY1 Regarding the New  
and Full Notification of UKRAINE2 
 
  The following communication, dated 30 October 2008, is being circulated at the request of the Delegation of Ukraine.    
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SPECIAL ECONOMIC ZONES AND PRIORITY TERRITORIES 
 
Question 1 
 
 For Special Customs Zone Regime, can Ukraine please explain the eligibility criteria in the lists of business activities drawn up by individual zone management?   
 
Reply
 
 
Article 11 of the Law of Ukraine "On the Gene ral Principles of Creating and Functioning of 
Special (Free) Economic Zones" dated 13 Octo ber 1992, No.2673-XII (with amendments and 
additions) defines functions and authorities of th e body on economic developm ent and management of 
a special (free) economic zone.    
According to the mentioned article :  "Functions and authorities of the body on economic
 
development and management of a special (free)  economic zone are defined by the law on 
creating of certain special (free) economic zone.    
 
The body on economic developm ent and management of a special (free) economic zone 
provides the general conditions of its functioning.  The exclusive competence of the body on 
economic development within the lim its of functioning of special (free) economic zone includes:   
 
- definition of perspective directions of deve lopment of a special (free) economic zone;   
- operation and construction of networks of tr ansport, telecommunication, power supply 
and others objects of industrial infrastructure that are used for the general needs;   
- development of a network of communications  with partners outside a special (free) 
economic zone;    
                                                     
 
1 G/SCM/Q2/UKR/2.   
2 G/SCM/N/155/UKR.   G/SCM/Q2/UKR/4 
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  - organization of the international tenders w ith the purpose of placing in territory of a 
special (free) economic zone of new manufactures;   
- ordering and granting of the ground areas and objects of infrastructure to the subjects of 
economic activity of special (free) economic zone; ha nding them over the natural resources for use;   
- issuing of permissions to the subjects of economic activity of special (free) economic 
zone to build new economic objects, registration of subject of economic activity and investments 
which are carried out in a special (free) economic zone.    
The executive director of the body on economic  development of a sp ecial (free) economic 
zone can be both the citizen of Ukraine or the citizen of other country who works under the fixed-term 
contract ".   
 
Question 2 
  For all the programmes in this section, ca n Ukraine please confirm that these are not 
contingent upon export performance or use of domestic inputs?    
Reply
 
 
The Regulation of the Cabinet of Ministers of Ukraine of 5 July 1999 No.1199 had approved 
the Model Agreement on realization of the investment project on the territory of priority development, 
in the special (free) economic zone.   
 
According to the Regulation of the Cabinet of Ministers of Ukraine dated 30 May 2005 
No. 404 the amendments has been made to the pa ragraph 3 of the mentioned Model Agreement – in 
subparagraph 2 "b" the section "Share  of export in total amount of manufacture" has been excluded.   
 
Besides, the Law of Ukraine "On amendments to  the Law of Ukraine "On the State Budget of 
Ukraine for the year 2005 and some other laws of Ukraine"" dated 25 March 2005 No.2505 cancels 
tax privileges and special customs regime for subjects of economic activity which realize investment projects in special economic zones and territories of priority development.    
Today, realization of investment projects wh ich have been approved in special economic 
zones and territories of priority development before adoption of the Law of Ukraine dated 
25 March 2005 No.2505, is carried out on the general conditions of taxation regime.   
 
SECTORAL PROGRAMMES 
 
Question 3 
  For the shipbuilding, Ukraine points out the fact that The Cabinet of Ministers of 
Ukraine approves a list of eligible shipbuilding en terprises according to the order determined in 
the Decree of Cabinet of Ministers of Ukraine of  12 July 2005, No. 555.  Can Ukraine please 
explain, what are the eligibility criteria in selection of these shipbuilders?    
Reply
 
 
In accordance with paragraph 3 of Resolution of the Cabinet of Ministers of Ukraine of 
12 July 2005 No.555 "On approving of the procedure of including of shipbuilding enterprises to the 
list of enterprises for which state support activities of shipbuilding industry are implemented" proposals regarding the expediency of including ente rprises to the list of enterprises, which are being 
introduced for state support for the shipbuilding industry, are prepared by the Ministry of industrial policy according to the following criteria:    G/SCM/Q2/UKR/4 
 Page 3 
 
 
   
 1) Compliance with profile (the main econom ic activity is the construction of ships, 
boats and carrying out of other works, according to the codes of foreign economic activity);  
 2) Functioning  capacity  of the enterprise (availability of existing contracts, options and 
other agreements for profile activiti es with their capacity indices);   
 3) Providing of ongoing payments to th e budgets of all levels, the Pension Fund of 
Ukraine and funds of state social insurance; 
 4) Development of new pr oducts which will be competitive in the global shipbuilding 
market and expansion of appropriate intern al and external sectors of the market;  
 5) Availability of the feasibility study on  the following indicators:  financial and 
economic efficiency to increase the volume of own circulating assets  and ensure of 
profitability, increasing of production efficiency and increase of complete set of vessels, materials, equipment and equipment of domestic production, in total amount of commodities.   
  According to paragraphs 2 & 4 of the mentione d Resolution, the Ministry of industrial policy 
examines quarterly the materials for the including of  enterprise to the list, makes a decision on the 
expediency of such inclusion and submits the propos als to the Cabinet of Ministers of Ukraine for a 
taking a decision.  Activities to the state support fo r shipbuilding enterprises may be carried out only 
from the date of coming into force of  the decision of  the Cabinet of Ministers of Ukraine as to their 
including to the list.    Question 4   For automotive sector, can Ukraine please conf irm that the exemptions in this section 
are not contingent upon export performa nce or use of domestic inputs?   
 Reply
 
  The provisions of Article 4 of the Law "On th e Development of the Automobile Industry of 
Ukraine" dated 18 March 2004, No.1624-IV, whic h included the requirements to produce local 
content production, have been abolished by the Law of Ukraine "On Amendments to the Law of 
Ukraine "On Development of the Automobile Indust ry of Ukraine"" dated 6 July 2005, No.2740-IV.   
 
  
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