WORLD TRADE  
ORGANIZATION  WT/BOP/S/16 
9 June 2009 
 
 (09-2771) 
Committee on Balance-of-Payments Restrictions  
  
 
CONSULTATIONS WITH UKRAINE 
 
Background Document by the Secretariat
 
  
1. This document has been prepared in accordan ce with paragraph 12 of the Understanding on 
the Balance-of-Payments Provisions of the GATT 1994. 
I. RECENT MACROECONOMIC AND TRADE DEVELOPMENTS  
A. R
ECENT ECONOMIC PERFORMANCE  
2. Ukraine's economy grew on average strongly at an annual rate of more than 7% from 2000, 
but since 2005 its performance has become very uneve n.  After contracting in 2005, economic growth 
resumed strongly in 2006 and reached 7.9% in 2007, but then decelerated to 2.1% in 2008.  The IMF 
forecasts Ukraine's real GDP will contract by 8% in 2009.  Industrial production has already 
contracted sharply as a result of declining export demand for steel and commodities.   
3. Since 2005 growth has been driven by real dom estic demand, fuelled by a credit boom that 
was driven by significant capital inflows and an incomes policy that redistributed windfall export 
revenues to the population.  Annual credit growth av eraged 70% in 2005-08, and a consumption boom 
fuelled a surge in imports at an annual rate of incr ease of 50-60%.  As a result, the current account of 
the balance-of-payments worsened rapidly, moving fro m a surplus in 2005 to a deficit of 7% of GDP 
in the second quarter of 2008.1  
4. Inflation averaged 10.6% in 2004-06, but accelerated sharply in 2007 and 2008 due to 
increased food and domestic gas prices.  According to  the IMF, Ukraine's economy started to overheat 
since early 2007, fuelled by the credit boom, and hi gh nominal wage growth in the 30-40% range.  
The increase in the CPI in the twelve-month pe riod to December 2008 was 25.2% although it is 
forecast by the IMF to decline to 16.8% in 2009.  
5. Steel accounts for some 40% of Ukraine's exports and 15% of GDP.  Fluctuations in its world 
price have been closely linked to Ukraine's econo mic performance.  Declining export prices for steel 
have led to a sharp deterioration of the current acc ount and a significant decline in Ukraine's terms of 
trade.   
6. Ukraine is highly dependent on Russia for its en ergy needs.  It has been paying US$180/tcm, 
or US$6.5 billion per year for gas imports.  Russia has indicated its intention to phase out remaining 
gas subsidies (a transit-adjusted European equiva lent of US$330/tcm is expected in 2009), which will 
exacerbate the strains on Ukraine's current account.2 
7. Ukraine has suffered a sharp reversal of extern al capital flows and a drying up of liquidity 
following the deepening global financial crisis.  Its sixth largest bank has been placed under 
                                                      
1 IMF (2008), Ukraine Request for Stand-By Arrangement, 3 November 2008. 
2 Ibid. WT/BOP/S/16 
Page 2  
 
receivership, undermining confidence in the banking system and accelerating capital outflows.  The 
authorities have introduced a series of exchange controls to help stem currency outflows.   
8. The exchange rate, which operate d as a de facto peg to the US dollar until the end of 2007, 
moved to a managed float in late 2008.  However,  despite this move, depreciation pressures on the 
Hryvnia continued, and between October 2008 and March 2009, the National Bank of Ukraine lost 
US$14 billion of reserves trying to offset them.  Th e changes in the foreign exchange market were 
accompanied by regulatory changes, including strengt hening controls on operatio ns of repatriation of 
foreign investments out of Ukraine, and limiting the rights of banks to effect arbitrage operations on 
purchase and sale of foreign currency.
3  Despite these measures, following the implementation of the 
managed float the Hryvnia has depreciated significan tly (over 40% against the US dollar in nominal 
terms) which has helped reverse th e increase in the current account defi cit.  However, exchange rate 
depreciation and a decline in confidence in the do mestic banking sector has led to an outflow of 
deposits.4   
9. On 5 November 2008, the IMF approved a two-year Stand-By Arrangement of 
US$16.4 billion to help the authorities restore fi nancial and economic stability.  An immediate 
disbursement of US$4.5 billion was made, fo llowed on 8 May 2009 by a second tranche of 
US$2.8 billion.   
10. Until recently, Ukraine has had a long history of low government defi cits and one of the 
lowest public debt levels among CIS countries.  Since 2000 the general government deficit has on 
average been below 2% of GDP.  However, Ukraine's underlying fiscal position has recently 
deteriorated sharply as high revenues from the co mmodity boom fuelled highe r public sector wages 
and social spending.  Fiscal loosening has in  turn contributed to the surge in inflation.5  It has also 
complicated the balance-of-payments situation.   
11. Given the sharp economic contraction experienced  by Ukraine in early 2009, during the First 
Review Under the Stand-By Arrangement with the IMF the fiscal target for 2009 was relaxed, from 
balance to a deficit of 4% of GDP, excluding th e cost of bank recapitalization (up to 9%).  In 
December 2008, given the deterioration of the fiscal accounts, the Ukrainian authorities took 
measures to contain the 2009 fiscal deficit to 4% of GDP and secure its financing.  These measures 
included an increase in excise taxes on tobacco, al cohol, and diesel;  an increase in the domestic 
prices for gas, electricity and coal;  and measures to improve the financial condition of the Pension 
Fund.  The authorities also sold carbon emission rights and adopted a financial plan for the state gas company Naftogaz, which limits the subsidy to th e company to the amount planned in the budget.
6 
12. Total gross external debt has increased from 47.5% of GDP in 2003 to 55.4% in 2008, and is 
expected to climb to 87% of GDP in 2009.  Most of this debt (some 81% in 2008) is external debt of 
the domestic private sector. 
                                                      
3 National Bank of Ukraine, Monetary Policy Department, Monetary Review 2008.  Consulted at:  
http://www.bank.gov.ua/ENGL/Publication/analy tical/Mon_review/MonetaryReview_2008e.pdf. 
4 World Bank, Ukraine Economic Update, 7 April 2009. 
5 IMF, Ukraine Selected Issues, 8 May 2008. 
6 IMF, First Review Under the Stand-By Arrang ement, Requests for Waiv ers of Nonobservance of 
Performance Criteria, and Rephasing of Purchases Under the Arrangement, IMF Country Report 09/173, 2 June 
2009.  Available online at:  http://www.imf.org/external/pubs/cat/longres.cfm?sk=22994.0 ).  WT/BOP/S/16 
 Page 3 
 
 
Table 1 
Basic economic indicators, 2003-08 
National Accounts 2003 2004 2005 2006 2007 2008 
Nominal GDP (current market prices; US$ 
million) 50,133.0 64,880.6 86,142.0 107,753.1 142,719.0 180,335.7 
Per capita GDP (US$) 1,048.4 1,367.3 1,828.8 2,303.0 3,068.5 .. 
Real GDP (% change) 9.6 12.1 2.7 7.3 7.9 2.1 
  Domestic demand (contribution) 11.4 9.1 13.2 13.1 16.1  
  Exports of goods and services .. .. .. .. 3.3 5.2 
  Imports of goods and services .. .. .. .. 21.5 17.1 
Unemployment rate (%) 9.1 8.6 7.2 6.9 6.4 6.4 
Exchange rate       
Hryvnias/US$ 5.3327 5.3192 5.1247 5.05 5.05 5.2672 
Real effective exchange rate (% change) -8.2 -2.2 10.2 4.8 1.4 9.0 
Prices and interest rates       
Inflation (CPI, % change) 5.2 9.1 13.5 9.1 12.8 25.2 
Deposit rate domestic currency 6.98 7.80 8.57 7.57 8.12 9.95 
Deposit rate foreign currency 5.94 6.27 6.82 5.86 5.84 5.91 
Lending rate domestic currency 17.89 17.40 16.17 15.17 13.90 17.49 
Lending rate foreign currency 11.95 12.29 11.60 11.29 11.33 11.68 
Money       
Reserve money (% change) 30.1 34.1 53.9 17.5 46.0 31.6 
Broad money (% change) 46.5 32.4 54.3 34.5 51.7 30.2 
General government finance (% of GDP)       
Revenuea 38.0 37.1 41.8 43.7 42.3 .. 
Tax revenue .. 31.3 36.2 38.1 36.9 .. 
Expenditure 38.9 41.5 44.1 45.1 44.3 .. 
Overall balance (cash basis) -0.9 -4.4 -2.3 -1.4 -2.0 .. 
Public debtb 30.6 25.5 18.7 15.7 12.5 .. 
External public debt 21.6 19.2 14.1 12.5 9.8 .. 
External sector (% of GDP unless 
otherwise indicated)       
Current account balance 5.8 10.6 2.9 -1.5 -3.7 -7.2 
Merchandise exports (% cha nge) 27.2 40.8 4.8 11.2 28.0 35.9 
Merchandise imports (% change) 29.3 27.9 21.8 22.1 36.9 40.1 
Service exports (% change) 11.4 50.7 19.0 20.7 25.4 26.4 
Service imports (% change) 25.7 49.0 14.0 21.4 28.1 31.9 
Foreign exchange reserves (US$ milli on) 6,662.0 9,489.5 18,987.0 21,843.2 31,783.2 30,791.9 
Gross external debt (US$ million) 23, 811.0 30,647.0 39, 619.0 54,512.0 82, 189.0 103,236.0 
Gross external debt  47.5 47.2 45.9 50.6 57.6 57.2 
 
a Excludes US$100 million of non-cash property in come paid annually by Russia in exchange  for amortization of Ukraine's debt to  
Russia. 
b Excluding debts by stat e-owned enterprises. 
 
Source:  IMF (2009), International Fi nancial Statistics, May;  IMF (2008), Country Report No. 08/227, July; National 
Bank of Ukraine (online information). 
13. Ukraine's current account of the balance of pa yments has been in deficit since 2006.  The 
deficit increased substantially in 2007, and by  the end of 2008 it reached a record level of 
US$12.9 billion (Table 2).  The growing deficit reflec ted mainly a sharp decline in the value of steel 
and commodity exports due to the slowdown in  global economic activity, and increased imports 
coupled with rising import prices as the currency depreciated.  The current account deficit shrank 
considerably in the first quarter of 2009, to US $524 million, reflecting mainly a sharp reduction in 
imports triggered by the contracti on in economic activity and the depreciation of the Hryvnia.  For the 
whole of 2009, the IMF is forecasting a current accoun t deficit equivalent to 2% of GDP, compared to 
7.2% of GDP in 2008. WT/BOP/S/16 
Page 4  
 
Table 2 
Balance of Payments (millions of US$)  
Transactions\Period 2005 2006 2007 2008 I 2008 II 2008 III 2008 IV 2008 2009 I 
1 Current Account 
(A+B+C+D) 2,531 -1,617 -5,918 -3,700 -3,359 -2,128 -3,746 -12,933 -524 
A Merchandise -1,135 -5,194 -10,572 -4 ,670 -4,401 -4,121 -3 ,742 -16,934 -1,141 
A1 Exports  35,024 38,949 49,840 13,960 18,940 21,199 13,618 67,717 8,488 
A2 Imports  -36,159 -44,143 -60,412 -18,630 -23,341 -25,320 -17,360 -84,651 -9,629 
B Services 1,806 2,126 2696 219 492 1,544 159 2,414 423 
   B1 Receipts  9,354 11,290 1,4161 3,568 4,576 6,054 3,697 17,895 2,914 
      Transport 4,481 5,351 6,114 1,788 2,023 1,980 1,835 7,626  
      Travel 3,125 3,485 4,597 694 1,498 2,903 673 5,768  
      Other services 1,748 2,454 3,450 1,086 1,055 1,171 1,189 4,501  
   B2 Payments -7,548 -9,164 -11,465 -3,349 -4,084 -4,510 -3,538 -15,481 -2,491 
      Transport -2,051 -3,208 -3,902 -1,333 -1,607 -1,661 -1,366 -5,967  
      Travel -2,805 -2,834 -3,293 -833 -1,132 -1,340 -718 -4,023  
      Other services -2,692 -3,122 -4,270 -1,183 -1,345 -1,509 -1,454 -5,491  
C Income -985 -1,722 -2,117 11 -283 -382 -886 -1,540 -428 
   C1 Receipts 758 1,332 2, 198 1,289 1,349 1, 525 1,256 5,419  
   C2 Payments  -1,743 -3,054 -4,315 -1,278 -1,632 -1,907 -2,142 -6,959  
D Current Transfers 2,845 3,173 4,075 740 833 831 723 3,127 622 
   D1 Remittances  236 290 417 479 568 595 498 2,140  
   D2 Other transfers 
 (inflows) 2,875 3,243 4,174 422 541 583 479 2,025  
   D3 Transfers 
(outflows) -266 -360 -516 -161 -276 -347 -254 -1,038  
2 Capital and 
Financial Account 7,742 3,679 15,335 3,564 5,026 6,683 -1,460 9,874 -4,701 
A Capital account  -65 3 3 0 -1 5 1 6 71 
B Financial account 7,807 3,676 15,332 3,564 5,027 6,678 -1,461 9,868 -4,772 
   B1 Direct investment  7,533 5,737 9,218 2,430 3,091 3,324 838 9,683 801 
   B2 Portfolio 
investment 2,757 3,583 5,753 217 160 -690 -967 388 -52 
   B3 Other investment -2,483 -5,644 361 917 1,776 4,044 -1,332 -201 -5,521 
3 Errors and 
Omissions 152 -63 -437 -150 718 -710 342 - - 
Overall Balance of 
Payments (1+2+3) 10,425 1,999 8,980 -286 2,385 3,845 4,864 -3,059 -5,225 
Fianncing -10,425 -1,999 -8,980 286 -2,385 -3,845 -4,864 3,059 5,225 
 
Source : Central Bank of Ukraine. 
B. DEVELOPMENTS IN TRADE  
14. In accordance with the latest available CO MTRADE figures, merchandise exports (f.o.b.) 
totalled US$67.0 billion in 2008, while merchandise imports (c.i.f.) reached US$85.49 billion.   
(a) Composition of trade 15. Steel is Ukraine's main export product increasing in importance from 32.1% of total exports 
in 2003 to 38% in 2008.
7  Ukraine exported 30.9 million metric  tons of steel in 2008, down from 
33.6 million tons in 2007;  however, due to increase d steel prices, total revenue from steel exports 
increased to US$25.46 billion in 2008, up from US$18.83 billion in 2007. 
16. The average share of manufactures in total exports increased from 66.9% in 2003 to 69.6% in 
2008.  The main manufactured export products (other  than iron and steel) are chemicals, transport 
equipment and non-electrical machinery.  Ukraine is also an important exporter of mining and 
agricultural products.  Mining products accounted fo r 13.0% of total exports  in 2008, down from a 
share of 18.5% in 2003.  Agricultural exports whic h include sunflower seed oil, wheat, barley and 
colza seeds accounted for some 16.9% of total exports in 2008, up from 13.4% in 2003 (Chart I).   
                                                      
7 COMTRADE data is used for the analysis due to its disaggregation.  WT/BOP/S/16 
 Page 5 
 
 
17. Some 59.3% of imports  were manufactured goods in 2008, up from 50.4% in 2003.  The 
main import categories are automotive transport, chem icals, and non-electrical machinery.  Imports of 
fuels and mining products accounted for 30.9% of the total in 2008, down from 37.9% in 2003, while 
imports of agricultural products accounted  for 8.2%, down from 10.6% in 2003.   
(b) Geographical distribution of trade 
18. Exports  are relatively concentrated with the top five trading partners accounting for some 
41.3% of total exports in 2008.  Russia is the ma in destination for Ukraine's exports, accounting for 
23.5% of the total in 2008, up from 18.7% in 2003 (Chart 2).  The second major destination is Turkey with 6.9%, followed by Italy (4.3%), Poland (3.5 %) and Belarus (3.1%).  The Commonwealth of 
Independent States (CIS) as a whole accounted for 35.5% of Ukraine's total exports in 2008 while 
EC(27) accounted for 27.1%. 
19. Imports  are slightly more geographically concentr ated than exports, with the five main 
providers accounting for one-half of total imports in  2008.  The main sources of Ukraine's imports in 
that year were Russia (22.7%), Germany (8.4%), China (6.6%), Turkmenist an (5.1%), and Poland 
(5.0%).  The CIS accounted for 39.3% of total imports in 2008 while EC(27) accounted for 33.8%. WT/BOP/S/16 
Page 6  
 
Chart 1
Product composition of merchandise trade, 2003 and 2008
2003 2008
(a)    Exports (f.o.b.)
Other consumer 
goods
6.3
Manufactures
66.9
Total:   US$23,066.8 million Total:  US$67,002.4 million  
(b)    Imports (c.i.f.)
Chemicals
10.3
Iron & steel
2.5Automotive transport 
7.5
Manufactures
50.4Electrical
machines   5.3
Non-electrical 
machinery
9.3Other transport 
equipment
1.2
Other mining
3.8Fuels
34.1Other
1.7
Other semi-
manufactures
7.2Non-electrical 
machinery
9.9
Chemicals
11.3Manufactures
59.3
Total:   US$23,020.4 million Total:   US$85,458.5 million Per cent
Manufactures
69.6Non-electrical 
machinery  5.2
Iron & steel  
38.0Electrical machines
4.0
Other 
consumer 
goods
6.7Other
1.1Mining
13.0Electrical machines
4.2Transport  equipment
4.4Other
0.5
Other semi-
manuf.    4.8Agriculture
16.9
Iron & steel  
32.1
Source :  UNSD, Comtrade da tabase (SITC Rev.3).Other 
consumer 
goods
7.2
Mining
30.9Other 
consumer
 goods
3.4Transport 
equipment
6.4
Other semi-
manuf.  5.6Non-electrical
machinery
6.1
Other semi-
manufactures
  7.3Mining
18.5Other 
agriculture
1.8
Agriculture
8.2Agriculture
10.6
Mining
37.9
Iron & steel
4.1Electrical machines
5.2Other agriculture
0.9
Chemicals 
8.5Chemicals  
7.6Other 
1.3
Other transport
equipment
1.4
Other mining
4.2Fuels
26.7Automotive transport
13.4Agric.
13.4Food
11.6
Other mining
6.6Fuels
11.9Food
16.1
Fuels
6.1
Other mining
6.9
 
 
  WT/BOP/S/16 
 Page 7 
 
 
Chart 2
Direction of merchandise trade, 2003 and 2008
2003 2008
(a)    Exports (f.o.b.)
CISa
26.2
Total:   US$23,066.8 million Total:  US$67,002.4 million
(b)    Imports (c.i.f.)
Other 
6.7
Other EC27
18.0Other CIS
8.5
United States
2.2
Other EC27
17.6China
6.6  Belarus  3.3
United States
3.3
Total:   US$23,020.4 million Total:   US$85,458.5 millionPer cent
CISa
35.5Middle East 
8.9
Russian
 Federation 
18.7
Other 
CIS
4.6
China  2.6United States
3.1Africa
5.4
United States
2.9Other 
6.5
Source :  UNSD, Comtrade database.Kazakhstan  3.6Africa
5.8
Other EC27
16.6Turkey
3.9Italy  5.6
CISa
39.3CISa
50.0Turkmenistan
3.9
Other 
8.1Other Asia
5.5 Kazakhstan  2.7
Other EC27
22.7Other 
5.2Other CIS
7.5
Italy   4.3
Turkey
6.9Asia  
6.4
Japan 
3.3
 Other Asia   4.4Turkmenistan
5.1Middle East
6.0Other
 CIS
  6.2
Russian
 Federation
23.5
Russian
Federation
22.7Russian Federation
37.6Belarus  3.1Asia
12.4
a               Commonwealth of Independent States (CIS).EC27
33.8EC27
34.2EC27
27.1EC27
37.8
Poland  3.5Poland  3.3
Germany  2.7
Germany  6.2
Italy 
 2.8Italy  
2.8Germany 
9.9Germany 
8.4
Poland  
3.5Poland 
5.0
 
 
 WT/BOP/S/16 
Page 8  
 
II. TRADE POLICY FEATURES AND DEVELOPMENTS 
A. T
RADE POLICY FRAMEWORK  
20. Following independence from the Soviet Union in 1991 Ukraine began its transition to a 
market-based economy.  In 2006, the European Union and the United States recognized Ukraine as a 
market economy.  In May 2008 Ukraine completed its WTO accession process to become the WTO's 
152nd Member.   
21. Ukraine is a signatory to a number of regional trade agreements (RTAs).  It is a member of 
the Commonwealth of Independent States (CIS) FT A which links Armenia, Azerbaijan, Belarus, 
Georgia, Kazakhstan, the Kyrgyz Republic, Moldov a, Russia, Tajikistan, Turkmenistan, Ukraine and 
Uzbekistan.  The CIS FTA foresees the conclusi on of bilateral free trade agreements pending its 
effective implementation.  Ukraine has signed b ilateral FTAs with all me mbers of the CIS FTA 
except Armenia.  In addition, it is a member of  the Common Economic Zone, a free trade area with 
Belarus, Kazakhstan and Russia and of the GUAM  Agreement which links Georgia, Ukraine, 
Azerbaijan and Moldova.  Ukraine also has an  FTA with the Former Yugoslav Republic of 
Macedonia (FYROM).  All of these RTAs cover trade in goods only.  In general, tariffs have been 
eliminated on almost all tariff lines in these RTAs. 
B. TARIFFS  
22. Ukraine bound 100% of its tariff lines when it acceded to the WTO;  tariff bindings are 
contained in Schedule CLXII, and range from 0 to 50% (excluding specific rates).  The average bound 
rate is 6.0% at the national tariff line level (10- digits) and is scheduled to be 5.9% upon final 
implementation in 2013.  Some 87% of tariff lines are bound at 10% or less.  The average bound rate 
for agricultural goods is 11.0%, while that for non-agricultural goods is 4.8%.  Duties on non-
agricultural goods are also bound at levels ranging from 0 to 50% per cent, with the lowest rates applying to many broad product groups including w ood, pulp paper and furniture and the highest to 
individual products such as reception apparatus for radio broadcast, catgut and conveyor or 
transmission belts.  Duties on agricultural goods are bound at levels ranging from 0 to 50%, with the 
lowest bound rates applying to grains and the highest to sugar.   
23. Ukraine's MFN applied tariff comprises 11,057 HS 10-digit lines.  163 (or 1.5%) of its tariff 
lines are subject to specific duties, the rest are ad valorem  duties.  The average tariff calculated by the 
WTO for 1 January 2009 (including ad valorem  equivalents (AVEs)) is 4.8%.  The average tariff for 
non-agricultural products is 3.6%, while that fo r agricultural goods (WTO definition) is 9.8% 
(Table 3).
8  Ukraine applies seasonal duties on 14 pr oducts including roses, carnations, orchids, 
gladioli, chrysanthemums, conifer branches, watermelons, apples, pears and quinces.  The differential 
seasonal duty on these items ranges from 5% to 20%.   
Table 3 
Ukraine, MFN applied rates, January 2009 
Description Number of lines Share/percent including AVEs Share/percent excluding AVEs 
Duty-free lines 4,028 (4,026) 36.4 36.4 
Non ad valorem tariff 163 1.5 1.5 
Lines subject to quota 0 0.0 0.0 
Non-ad valorem tariff with no AVEs 60 0.5 1.5 
Simple average tariff rate 11,057 4.8 (4.9) 4.7 (4.8) 
   WTO agriculture 2,206 9.8 9.6 
Table 3 (cont'd)  
                                                      
8 Data showing average tariffs including and excluding AVEs are shown in Table 3 to provide a full 
comparison with bound rates which do not include AVEs.  WT/BOP/S/16 
 Page 9 
 
 
Description Number of lines Share/percent including AVEs Share/percent excluding AVEs 
   WTO non-agriculture  8,851 3.6 (3.7) 3.6 (3.7) 
   ISIC 1 642 5.1 5.1 
   ISIC 2 131 3.3 3.3 
   ISIC 3 10,283 4.8 (4.9) 4.7 (4.8) 
   First stage of processing 1,295 3.9 3.9 
   Semi-processed 3,190 2.9 2.9 
   Fully processed 6,572 5.9 (6.1) 5.8 (5.9) 
Domestic peaks 643  (700) 5.8 (6.3) 5.5 (6.0) 
International peaks 355 (412) 3.2 (3.7) 2.9 (3.4) 
Overall standard deviation 11,057 5.4 (5.6) 5.2 (5.3) 
 
Note: Calculations include AVEs, as availa ble, provided by the Ukraine authorities.  Data in brack ets include the 13% import su rcharge 
on products falling under HS codes 8418 a nd 8703 applied as of 7 March 2009. 
 
Source : WTO calculations, based on data provided by the Ukraine authorities. 
24. The average applied rate for goods in the first stage of processing, at 3.9%, is above the 
average tariff applied on semi-processed goods (2 .9%), although lower than for fully processed 
products (5.9%).   
25. Imports are subject to a value added tax (VAT) at a rate of 20%. 
26. Ukraine grants duty-free treatment to the vast ma jority of imports which fulfil the applicable 
rules of origin from its 11 CIS FTA partners and to its imports from FYROM. 
C. IMPORT RESTRICTIONS AND LICENSING  
27. Ukraine controls and restricts the import of weapons, narcotics, chemical and hazardous 
substances, and certain pharmaceutical and co mmunications related pr oducts. Ukraine's import 
licensing regime is laid down in Article 16 of the Law of Ukraine "On foreign economic activities" of 
16 April 1991 #959-XII (with relevant changes and additions).  The Cabinet of Ministers of Ukraine 
adopts the licensing regime applying to imports of goods based on a submission of the Ministry of Economy of Ukraine.  The list of goods subject to  licensing in 2008 was approved by resolution of 
Ukraine's Cabinet of Ministers #1411 of 29 December  2007 (as amended).  The regime was notified 
to the WTO on 25 September 2008.
9  In accordance with Ukrainian legislation, licensing of imports 
can be either automatic or non-automatic.  The goods subject to automatic licensing in 2008 were 
listed in the notification and were defined at the HS  4-digit, 6-digit and 10-digit level;  they include 
insecticides, postage stamps, banknotes,  copper sulphate, sugar, sugar sy rups, chocolate, printing ink, 
paper, optical polycarbonates, laser reading systems,  ozone depleting substan ces, and products that 
may contain ozone-depleting substances.  Import li censing procedures apply to all imports regardless 
of origin.  Licenses are not transferable between im porters.  No penalties are imposed for a failure to 
use a license or part of a license. 
28. Non-automatic import licensing may be used in the case of application of quotas, quantitative 
or other restrictions on imports of goods.  In 2008 no imports were subject to the non-automatic 
licensing regime in Ukraine.  Applications for impor t licenses are considered by Ukraine's Ministry of 
Economy or by relevant regional bodies.  Certain categories of goods are subject to approval from 
other administrative bodies.   
                                                      
9 WTO document G/LIC/N/3/UKR/1, 1 October 2008. WT/BOP/S/16 
Page 10  
 
29. In February 2009, Ukraine notified the Committe e on Agriculture of the imposition of a tariff 
rate quota of 263,900 tons for 2009 on raw cane sugar (HS 1701.11).
10  Imports of raw cane sugar 
imported from Ukraine's RTA partners are not counted towards the quota.  
D. CONTINGENCY MEASURES  
(a) Anti-dumping and countervailing measures 
30. As of December 2008, Ukraine had definitive an ti-dumping measures in force on 19 products 
from Belarus, Belgium, China, Finland, Italy,  Poland, Russia, the Slovak Republic, and Turkey.11  
Five measures were imposed during 2008.  As of 31 December 2008, Ukraine had price undertakings 
on fibreboard from Belarus and stationary or m ovable screw compressors from Belgium.  Two anti-
dumping measures (on matches from Belarus and Russia) were revoked during 2008. 
(b) Safeguard measures 
31. Since 2003, Ukraine has introduced a number of safeguard measures on imports, mostly 
based on minimum import prices.  Safeguard measu res are currently in force on six products.12  One 
of these measures has been imposed since Ukraine' s accession to the WTO.  Safeguard measures are 
applied to all trading partners, including preferentia l trading partners.  The safeguard duty is applied 
in addition to the normal customs duty. 
E. PREFERENTIAL ACCESS TO THIRD MARKETS  
32. Ukraine benefits from the Generalized System  of Preferences (GSP) schemes of Belarus, 
Canada, the European Union, Japan, Kazakhstan, Ne w Zealand, Norway, Switzerland, Turkey and the 
United States.   
III. THE TRADE MEASURES APPLIED AND THEIR POSSIBLE EFFECT 
33. On 4 March 2009, Ukraine notified to the WTO, on the basis of Paragraph 9 of the 
Understanding on the Balance-of-Payments Provisions  of the GATT 1994, of the introduction, as of 
7 March 2009, of an import surcharge of 13%, on im ports of certain products  for balance-of-payments 
purposes for a period of up to six calendar months.  The legal basis for these measures is:  Law of 
Ukraine No. 923-VI, "On Introducing Changes to Some  Laws of Ukraine to Improve the Balance-of-
Payments of Ukraine in Connection with the Global Financial Crisis".13  The initial regulation was 
applied to a number of products covering 24 HS Chapters.14  The surcharge applies in addition to the 
customs value of the goods, before payment of inte rnal taxes if any (e.g. VAT, excise duties);  thus 
for example if the MFN tariff is 10%, the total dut y paid on the import including the surcharge will 
amount to 23%.   
                                                      
10 WTO document G/AG/N/UKR/1, 26 February 2009. 
11 WTO document G/ADP/N/180/UKR, 20 February 2009.  Products subject to anti-dumping measures 
are artificial fur and fleece;  fibreboard;  screw compre ssors;  citric acid;  electric incandescent lamps;  
refrigerators and freezers;  cables, ropes, wires and othe r like articles from steel or iron;  laminated particle 
board;  pointwork;  corrugated cement-asbestos board;  abrasive instruments;  and ammonium nitrate. 
12 These are applied on ruberoid (HS 6807 10 10);  ball bearings (HS 8482 10);  stockings (HS 6002 
92, 6002 93);  woolen clothes (HS 5208 22, 5208 29, 5208 32, 5208 39, 5208 52)¸ gas discharge lamps lamps 
(HS 8539 31);  and casing and pump-compressor seamless steel pipes (HS 73034 29 11 00) . 
13 WTO document WT/BOP/N/66, 9 March 2009. 
14 Tariff headings 0202, 0203, 0206 - 0210, 0504 - 0506, 0509, 0511 (except item 0511 10 00 00), 
0808, 1601 - 1605, 1701, 1702 (except for starch treacle in item 1702 30 99 00), 2204 - 2208, 2701, 4203, 4303, 
57, 60 - 65, 6806, 6901, 7201, 7301, 7321, 8401 , 8414, 8418, 8501, 8516, 8702, 8703, 8704.    WT/BOP/S/16 
 Page 11 
 
 
34. On 14 May 2009, Ukraine notified the WTO that the 13% import surcharge had been 
eliminated on all imports except refrigerators (HS 8418) and motor vehicles (HS 8703).15  T h e  
surcharge on these goods is envisaged to be imposed  for six months, thus until 7 September 2009.  
According to Ukraine, the Cabinet of Ministers is entitled to reduce the amount of the temporary 
surcharge, abolish or prolong it, but for no longer th an another six months, by issuing an appropriate 
decree.  The President of Ukraine has challenged th is authority of the Cabinet of Ministers to the 
Constitutional Court of Ukraine.  
35. The trade measures applied by Ukraine on re frigerators and motor vehicles cover 63 HS 
subheadings, at a 10 digit level, or some 0.6% of all tariff lines.  The measures apply to imports from all sources except Ukraine's preferential trading pa rtners, namely:  CIS partners and the Former 
Yugoslav Republic of Macedonia. 
36. The average MFN applied tariff (2009) for refrigerators (HS 8418) is 4.4%.  The MFN 
applied (2009) rate is the same as the 2009 bound rate for all but three of the 31 HS 10-digit items 
falling under this tariff heading.
16  The average MFN applied tariff (2009) for motor vehicles 
(HS 8703) is 10%.  The MFN applied (2009) rate is th e same as the 2009 bound rate for all but two of 
the 32 HS 10-digit items.17  Thus after the imposition of the 13% surcharge applied tariffs exceed 
bound levels for all 63 tariff lines relating to refrigerators and motor vehicles.   
37. The measures applied by Ukraine affect a volume of trade of US$6.2 billion (2008), 
equivalent to some 7.3% of its total 2008 c.i.f. imports and have an eff ect on imports from a number 
of trading partners.   
38. Table A1 identifies the effect of the restric tions on imports of refrigerators from all of 
Ukraine's individual trading partners in 2008.  The to tal value of Ukraine's imports of refrigerators in 
2008 was US$470 million, or some 0.6% of its total impor ts in that year.  This is some 20% more than 
in 2007, and more than twice the value of imports in 2004.18  Imports from Russia and Belarus, which 
accounted for 32% of Ukraine's total imports of refri gerators in 2008 are not subject to the measures.  
Imports of refrigerators from othe r main trading partners which are subject to the measures invoked 
for balance-of-payments include:  imports from Italy totalling US$33.3 million in 2008, or 7.2% of 
Ukraine's imports from Italy in that year;  impor ts from Lithuania totalling US$32.8 million in 2008, 
(4.8% of Ukraine's imports from Lithuania in that year);  imports from China of US$35.7 million in 2008, (0.63% of Ukraine's imports from China in th at year);  imports from the Republic of Korea 
totalling US$30.5 million (1.49% of Ukraine's impo rts from the Republic of Korea in 2008);  and 
imports from Turkey of US$29.6 million (11.4% of Ukraine's imports from Turkey).  In 2008 
Ukraine's exports of refrigerators amounted to US $179.9 million (0.27% of its total exports);  54.9% 
of refrigerator exports were to Russia.  Ukraine' trade deficit in refrigerators in 2008 accounted for 
some 1.7% of the total merchandise trade deficit in that year. 
39. Table A.2 identifies the effect of the restrictions on imports of motor vehicles from all of 
Ukraine's individual trading partners in 2008.  The to tal value of Ukraine's imports of motor vehicles 
in 2008 was US$5.73 billion, or some 6.7% of its tota l imports in that year.  This is some 63% more 
                                                     
 
15 WTO document WT/BOP/N/68, 18 May 2009. 
16 For two tariff subheadings (8418220000 and 8418290 000) the MFN (2009) applied rate is 5% and 
the 2009 bound rate is 10%.  In one case (8418619000), the MFN (2009) applied rate of 3% exceeds the 2009 bound rate of 2.5% (before the imposition of the surcharge). 
17 For tariff subheading (8703231130) the MFN (2009) applied rate is 8% and the 2009 bound rate is 
9%.  In one case (8703901000), the MFN (2009) applied rate of 10% exceeds the 2009 bound rate of 9% (before the imposition of the surcharge). 
18 Refrigerator (HS8418) imports (HS84018) in the 2004-07 period were:  US$179 million in 2004;  
US$239 million in 2005;  US$312 million in 2006;  and US$392 million in 2007.   WT/BOP/S/16 
Page 12  
 
than in 2007, and some six times the value of imports in 2004.
19  Imports from Russia and Uzbekistan, 
which accounted for 10.8% of Ukraine's total imports of motor vehicles in 2008 are not subject to the measures.  Imports of motor vehicles from other ma in trading partners which are subject to the 
measures invoked for balance-of-payments are:  impor ts from Japan totalling US$2.24 billion in 2008, 
or 79.4% of Ukraine's imports from Japan in th at year;  imports from Germany totalling US$580.1 
million in 2008, (8.1% of Ukraine's imports fro m Germany in that year);  imports from the 
United States of US$474.6 million in 2008, (16.8% of Ukraine's imports from the United States in 
that year);  imports from the United Kingdom tota lling US$393.1 million (28.8% of Ukraine's imports 
from the United Kingdom in 2008);  and imports from Turkey of US$224  million (11.4% of Ukraine's 
imports from Turkey).  In 2008 Ukraine's exports  of motor vehicles amounted to US$602 million 
(0.9% of its total exports);  92.6% of exports of motor vehicles were to Russia.  Ukraine's trade deficit 
in motor vehicles totalled US$5.13 billion in 2008,  an accounted for some 30.3% of the total 
merchandise trade deficit in that year;  this deficit was considerable higher than in previous years, but 
its share of the total merchandise deficit was lowe r than in 2005 and 2006, although higher than in 
2007.
20  
40. As a result of the measures, Ukraine's average tariff increased slightly to 4.9% (Table 3).21   
Table A1 
Ukraine's main trading partner for HS co de 8418 (refrigerators, freezers ...), 2008 
Imports US$ % Exports US$ % 
World 470,516,189  World 179,868,548  
EU27 169,743,390 36.1 Russian Federation 98,668,318 54.9 
   Italy 33,284,437 7.1 EU27 21,932,268 12.2 
   Lithuania 32,809,222 7.0    France 11,356,956 6.3 
   Poland 22,713,388 4.8    Czech Rep. 1,753,710 1.0 
   Hungary 15,344,159 3.3    Poland 1,583,904 0.9 
   Germany 14,112,708 3.0 Azerbaijan 15,404,960 8.6 
Russian Federation 98,508,765 20.9 Kazakhstan 9,870,641 5.5 
Belarus 52,205,756 11.1 Belarus 9,102,362 5.1 
China 35,747,864 7.6 Rep. of Moldova 7,002,494 3.9 
Rep. of Korea 30,512,867 6.5 Uzbekistan 6,226,506 3.5 
Turkey 29,648,769 6.3 Georgia 2,443,032 1.4 
Thailand 26,862,806 5.7 Tajikistan 1,929,044 1.1 
Indonesia 10,892,164 2.3 Thailand 1,753,635 1.0 
Brazil 6,730,751 1.4 Kyrgyzstan 1,170,072 0.65 
Denmark 6,498,891 1.38 Turkmenistan 1,166,099 0.65 
Slovenia 6,159,444 1.31 Hungary 1,134,544 0.63 
Romania 5,617,573 1.19 Slovakia 1,033,077 0.57 
France 5,584,206 1.19 Italy 972,136 0.54 
Spain 4,399,486 0.94 Austria 731,999 0.41 
Czech Rep. 4,138,298 0. 88 Belgium 678,410 0.38 
Bulgaria 3,806,057 0.81 Greece 612,311 0.34 
Netherlands 3,662,851 0.78 Canada 493,109 0.27 
Greece 3,031,646 0.64 De nmark 478,044 0.27 
Austria 2,923,935 0.62 Netherlands 471,534 0.26 
India 1,997,011 0.42 Colombia 468,936 0.26 
Sweden 1,608,283 0.34 Germany 450,816 0.25 
Syria 1,560,084 0.33 Serbia 421,972 0.23 
Slovakia 1,454,341 0.31 Brazil 337,315 0.19 
Table A1 (cont'd)  
                                                      
19 Motor vehicle (HS8703) imports in the 2004-07 period were:  US$897 million in 2004;  US$1.23 
billion in 2005;  US$2.2 billion in 2006;  and US$3.53 billion in 2007.   
20 The deficit in motor vehicle trade was:  US$866 million in 2004 (there was a merchandise trade 
surplus in that year);  US$1.19 billion in 2005 (104% of the total merchandise trade deficit);  US$1.94 billion in 
2006 (37.4%);  and US$3.04 billion in 2007 (28.8%). 
21 Calculation includes AVEs.  WT/BOP/S/16 
 Page 13 
 
 
Imports US$ % Exports US$ % 
USA 1,421,111 0.30 Armenia 283,335 0.16 
Belgium 1,021,890 0.22 China, Hong Kong SAR 264,317 0.15 
United Kingdom 930,979 0.20 Singapore 220,312 0.12 
Serbia 736,701 0.16 Bulgaria 214,024 0.12 
Bosnia Herzegovina 724,813 0.15 USA 205,084 0.11 
Mexico 694,025 0.15 China 146,333 0.08 
Israel 631,772 0.13 United Kingdom 141,410 0.08 
Saudi Arabia 560,863 0.12 Latvia 124,190 0.07 
United Arab Emirates 442,769 0.09 Other Asia, nes 102,257 0.06 
Malaysia 348,800 0.07 Slovenia 67,078 0.04 
Finland 293,146 0.06 Afghanistan 53,710 0.03 
Estonia 167,508 0.04 Estonia 50,759 0.03 
Belize 127,996 0.03 Israel 49,130 0.03 
Portugal 118,782 0.03 Bosnia Herzegovina 44,735 0.02 
Jordan 109,005 0.02 Lithuania 40,653 0.02 
Japan 98,314 0.02 Mexico 37,114 0.02 
Canada 79,444 0.02 Spain 34,444 0.02 
Other Asia, nes 57,741 0.01 Viet Nam 31,084 0.02 
Latvia 49,335 0.01 India 16,924 0.01 
Singapore 22,655 0.00 FYROM 8,660 0.00 
Switzerland 20,392 0.00 Congo 4,603 0.00 
Ireland 12,494 0.00 Belize 4,265 0.00 
China, Hong Kong SAR 11,215 0.00 Barbados 3,500 0.00 
Dem. People's Rep. of Korea 6,643 0.00 Romania 1,724 0.00 
Suriname 3,520 0.00 Panama 1,032 0.00 
Ecuador 3,441 0.00 Areas, n.e.s 676 0.00 
Lebanon 2,967 0.00 Cyprus 545 0.00 
Uzbekistan 494 0.00 Saint Kitts and Nevis 450 0.00 
Luxembourg 331 0.00 Mongolia 261 0.00 
Turkmenistan 322 0.00    
Azerbaijan 297 0.00    
Rep. of Moldova 291 0.00    
Tajikistan 149 0.00    
Kazakhstan 135 0.00    
Mongolia 81 0.00    
Norway 6 0.00    
 
Source : WTO Secretariat based on  datas from COMTRAD.  
Table A2 
Ukraine's main trading partner for HS code 8703 (motor vehicles ...), 2008 
Imports US$ % Exports US$ % 
World 5,731,839,732  World 602,043,680  
Japan 2,239,801,866 39.1 Russian Federation 557,395,106 92.6 
EU27 1,592,110,895 27.8 EU27 41,867,052 7.0 
    Germany 580,061,780 10.1 Poland 41,366,677 6.9 
    United Kingdom 393,160,136 6.9 Germany 400,728 0.1 
    Spain 137,233,264 2.4 Bulgaria 32,846 0.0 
    Romania 128,658,663 2.2 Slovakia 28,854 0.0 
    France 75,043,800 1.3 Spain 28,246 0.0 
    Slovakia 60,166,820 1.0 Lithuania 9,701 0.0 
    Poland 51,471,452 0.9 Armenia 1,703,253 0.3 
    Netherlands 33,552,078 0.6 Georgia 508,268 0.1 
Russian Federation 506,054,155 8.8 Belarus 392,779 0.1 
USA 474,589,348 8.3 Equatorial Guinea 63,158 0.0 
Turkey 224,033,557 3.9 Rep. of Moldova 36,317 0.0 
Table A2 (cont'd)  WT/BOP/S/16 
Page 14  
 
Imports US$ % Exports US$ % 
Rep. of Korea 204,751,642 3.6 Rep. of Korea 33207 0.0 
Uzbekistan 116736232 2.0 Azerbaijan 13147 0.0 
China 76813983 1.3 Switzerland 10206 0.0 
Canada 75922237 1.3 Serbia 8358 0.0 
Thailand 53353709 0.9 Canada 6400 0.0 
Mexico 47508952 0.8 Indonesia 6016 0.0 
Hungary 42265776 0.7 USA 413 0.0 
United Arab Emirates 38,953,156 0.7    
Iran 24,298,636 0.42    
Rep. of Moldova 22,574,392 0.39    
Belgium 21,796,279 0.38    
Sweden 19,625,223 0.34    
Australia 18,120,845 0.32    
Italy 15,907,088 0.28    
Austria 13,889,897 0.24    
India 7,706,769 0.13    
Latvia 7,647,688 0.13    
Ireland 3,656,284 0.06    
Portugal 2,852,928 0.05    
Czech Rep. 2,087,311 0.04    
Belarus 1,465,397 0.03    
Indonesia 1,112,494 0.02    
Lithuania 810,790 0.01    
Switzerland 795,142 0.01    
South Africa 743,153 0.01    
Finland 742,197 0.01    
Dem. People's Rep. of Korea 631,718 0.01    
Malaysia 613,551 0.01    
Syria 599,656 0.01    
Estonia 596,661 0.01    
Cyprus 508,434 0.01    
Georgia 396,563 0.01    
Kuwait 395,587 0.01    
Brazil 375,798 0.01    
New Zealand 241,100 0.00    
Jordan 203,718 0.00    
Bulgaria 178,219 0.00    
Saudi Arabia 151,902 0.00    
Other Asia, n.e.s. 149,634 0.00    
Greece 101,591 0.00    
Egypt 75,900 0.00    
Luxembourg 71,455 0.00    
Israel 67,885 0.00    
FYROM 61,583 0.00    
Croatia 54,746 0.00    
Kazakhstan 41,287 0.00    
Argentina 40,000 0.00    
Kyrgyzstan 34,506 0.00    
Libya 33,825 0.00    
Panama 33,500 0.00    
Serbia 29,504 0.00    
Turkmenistan 27,125 0.00    
Algeria 26,513 0.00    
China, Hong Kong SAR 20,000 0.00    
Table A2 (cont'd)   WT/BOP/S/16 
 Page 15 
 
 
Imports US$ % Exports US$ % 
Azerbaijan 17,429 0.00    
Guam 16,971 0.00    
Ghana 15,264 0.00    
Slovenia 15,139 0.00    
French Polynesia 14,745 0.00    
Tuvalu 11,845 0.00    
Denmark 9,942 0.00    
Lebanon 5,000 0.00    
Morocco 4,250 0.00    
Armenia 2,066 0.00    
 
Source : WTO Secretariat based on  data from COMTRADE.  
__________