WORLD TRADE  
ORGANIZATION  G/SG/N/8/MDA/2 
G/SG/N/10/MDA/2 
G/SG/N/11/MDA/3 
21 December 2007 
 (07-5723) 
Committee on Safeguards Original:   English 
  
 
 
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 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2 
OF THE AGREEMENT ON SAFEGUARDS 
 
REPUBLIC OF MOLDOVA 
 
(Cane or Beet Sugar) 
  
 The following communication, dated 12 December 2007, is being circulated at the request of 
the Permanent Mission of Moldova.    
_______________ 
  
 As indicated in the notification of the Republic of Moldova contained in document G/SG/N/6/MDA/3, the Investigation Aut hority of the Republic of Moldova decided to 
initiate an investigation on imports  of sugar on 27 July 2007.   
 
 Based on the results of this investigation, th e Moldovan authorities wish to notify as follows.   G/SG/N/8/MDA/2 
G/SG/N/10/MDA/2 G/SG/N/11/MDA/3 
Page 2 
  
  I. EVIDENCE OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY 
INCREASED IMPORTS 
 In accordance with the domestic legislation, the Investigation Authority, responsible body for 
conducting respective investigation based on petition of  domestic producers, concluded that there is a 
threat of vast flow of sugar imports after th e date of 15 February 2008 when the Law nr.8-XV 
from 05 February 2004 concerning the application for safeguard measure will lose its force.  Thus, 
will damage the investment program of the industry,  which is in process of resuscitation from injury 
caused in the period before February 2004.  The dom estic sugar industry had suffered a serious injury 
and which is attributable to a significant increase in  imports and that further threat exists in the 
absence of the safeguard measure.    1. Definition of the domestic industry
 
 
 The Union of Sugar Producers from Moldova is voluntary associations of legal entities 
dealing with sugar production within the territory  of the Republic of Mo ldova and covering 100 per 
cent of domestic sugar producers, which are listed below:    
- Joint Venture "SÜDZUCKER-MOLDOVA" SA, Drochia, raionul Drochia 
- Joint Venture "CUPCINI-CRISTAL", Cupcini, raionul Edine ţ 
- Joint Venture "MARR SUGAR MOLDOVA" SA, Chisinau 
- Joint Venture "GLODENI-ZAH ĂR", Glodeni, raionul Glodeni 
  The Union of Associations of Agricultural Producers is a voluntary association covering the 
majority of large farmers associations countrywi de and it represents the interests of all sugar 
producers and beet growers.  The co-operating co mplainants, therefore, constitute the domestic 
industry.    2. Sugar imports
 
  Due to the implementation of safeguard meas ure from February 2004 the market was supplied 
with internal produced sugar.  There were register ed 8 thousands tons sugar imports in 2005.  It is 
estimated that the sugar import on 2007 will reach 4 thousand tonnes.    
  2004 2005 2006 2007 
est. 
Import 1000 tons 0,2 8 0,3 0 
Export 1000 tons 5 13 32 32,2 
 
 
3. Price evolution  
 
Import prices 
 
 2004 2005 2006 2007 
est. 
Cane or beet sugar and chemically pure sucrose, in solid form (DAF price USD/t) 240 270 430 330 
  G/SG/N/8/MDA/2 
 G/SG/N/10/MDA/2 
 G/SG/N/11/MDA/3 
 Page 3 
  
   The sugar imports were exposed to differen t dynamics during the investigation period that 
were in directly dependency with prices at the internat ional exchanges.  It is estimated that, in the next 
period the imported quantities of suga r will grow due to large sugar price recession at the international 
level and to sugar supply volumes that are exceedi ng demand with almost 11 million tones.  It is 
noticeable that the majority of transactions of suga r imports are with cane sugar that as it is known is 
cheaper than beet sugar.    
 Domestic prices 
  The application of safeguard measures a llowed the market price to rise from 388 USD 
in 2004 to 570 USD in 2007.  This  level permitted the coverage of  production cost and assured the 
opportunity to reinvest the obtained income in production factors.  The application of safeguard measure has made market stabilization and establishe d an opportunity to realize the products to a 
profitable price.  Thus, the 2004 year was the first profitable year of the industry during last 10 years.   
 
 2004 2005 2006 2007 
est. 
Import (thousand tons) 0,2 8 0,3 0 
Domestic market price of sugar (FCA USD/t) 388 514 607 570 
  4. Situation of the domestic industry
 
 
(a) Production   Sugar industry's production volumes depend upon the amount of sugar beets produced in the country.  The best indicator of the trend in production volume development is the growth of 
productivity of the area under beet cultivation.   
  
  2004 2005 2006 2007 
est. 
Area under beet cultivation (1000 ha) 38 32 33 31 
Harvest (t beets/ha) 24,9 30,8 32,5 20,3 
Sugar content at the reception (%) 15,40% 16,80% 17,00% 16,20% 
Harvest per hectare (t sugar/ha) 3,8 5,2 5,5 3,3 
      
Beets collected 1000 tones 944 986 1 074 630 
Beets processed 1000 tones 927 975 1 062 624 
Loses at the reception % -1,80% -1,10% -1,10% -1,00% 
Sugar extraction % 11,95% 13,66% 13,98% 12,90% 
Productions loses % 3,45% 3,10% 3,02% 3,3% 
      
Energy consumption kWatt / t 
sugar 3 404 2 942 2 785 2 550 
 
 
 The situation of agricultural farms was im proved through the implementation of advanced 
technologies of beet sugar cultivation.  Thus, the harvest of beet of 2006 year reached 32.5 tonnes/ha G/SG/N/8/MDA/2 
G/SG/N/10/MDA/2 G/SG/N/11/MDA/3 
Page 4 
  
  comparing to 24.9 tones/ha in 2004.  Though the rea lizations impress, the agricultural sector continues 
to remain more inefficient comparative to other co untries sugar productive.  Industry's experts sustain 
that reaching the 8 tones of sugar per hectare - th e producers will become competitive.  This objective 
is achievable;  furthermore it is proven by those 20 pe r cents beet growers that attained these results.  
There is important to note that the drought of 2007  year diminished the biggest part of the harvest 
expectations of the sugar beet growers, which r espectively affected the productive forecasts of the 
industry.    
 In the industrial sector also obtained qualitativ e adjustments.  The created conditions resulted 
from safeguards application that permitted to sugar producers to invest more than 19 mil. USD that 
has as result the reduction of energy consumpti on with 25,1 per cents and reduce the production loses 
at 1,0 per cents in 2007.    
(b) Capacity utilization 
  There are 9 sugar factories in Moldova, of wh ich 4 are operational in 2007.  The other 5 sugar 
plants were closed for productive optimization objectiv es.  The last factory has been closed in 2006.  
Thus the actual capacity utilization is consisting 55 pe r cents;  one of major factors of this decrease 
was the weather conditions that affected negativ ely both national agriculture and industry.   
 
  2004 2005 2006 2007 
est. 
Daily processing capacity t beets/day 21 000 18 000 18 000 18 000 
Capacity utilization % 49% 60% 66% 55% 
 
  With production optimization purposes, the ineffi cient factories were temporally closed and 
exposed to further technical re-equipment.  The br anch investment program for the next 5-8 years 
requires a financial effort of 108.9 mil. USD.  Th e mentioned program foresees investment both in the 
industrial sector and agricultural one.  The purposes of the investment are to improve the beet processing efficiency, the reduction of ecological  risks and the implementation of advanced 
technologies in the agriculture.    
(c) Employment 
  The number of jobs in the domestic sugar indu stry has constantly declined throughout the 
investigation period.  The respective decrease is propor tional related as to close of sugar plants as to 
productive efficiency optimization.    
Employment in sugar factories 2004 2005 2006 2007 est. 
Employment (thousand people) 2,85 2,56 2,35 2,20 
Reduction as to previous year (%)  -10,1 -8,2 -6,5 
 
 (d) Profitability  
 The Moldovan sugar industry had increasing pr ofits during the investigation period, which 
reached 5,7 million USD in 2006.  It is notable that  the impact of safeguard measure assures a positive 
profitability that almost is re-invested in the indus try resuscitation.  The main objective is established  G/SG/N/8/MDA/2 
 G/SG/N/10/MDA/2 
 G/SG/N/11/MDA/3 
 Page 5 
  
  in performing the production capacity and reaches th e most efficient productivity.  The weather 
conditions of 2007 year do not around the profitability of the branch too and affected it adversely.   
 
 
 
(e) Sales, stocks, market share of imports 
 
  2004 2005 2006 2007  
est. 
Domestic consumption 1000 tones 90.0 90.0 90.0 90.0 
Estimated consumption in Transnistria 1000 tones 20.0 20.0 20.0 20.0 
Domestic consumption 
including Transnistria 1000 tones 110.0 110.0 110.0 110.0 
 
  The Moldovan Department of Statistics assesse s the domestic consumption at 90,000 tons.  
This estimation does not cover the consumption in  Transnistria, an eastern region of Moldova upon 
which Moldovan authorities do not have control.  Th e estimated consumption there is 20.000 tons.   
 
  2004 2005 2006 2007 est. 
Internal Production 1000 tones 111 133 148 80 
Import 1000 tones 0,2 8 0,3 0 
Export 1000 tones 5 13 32 32,2 
Incl.      
Romania  5 9 14  
Russia  0 4 18  
Others  - - -  
Sales on internal market 1000 tones 101 114 86 90 
Sugar stocks at the end of the 
year 1000 tones 71 83 111 68,8 
 
  The applied safeguard measure permitted a gradual resuscitation of the Moldovan sugar 
industry, thus the internal production grew by 33,3 per cents from 2004 to 2006.  It is estimated that in 2007 the sugar production will diminish, because  of weather conditions that suppressed all the 
performance improvements and forecasts in the branch.   
 
 The implied population in this industry, the beet growers, the industry workers and other 
people that are directly dependent of the branch income are valuated to 60 thousands.  The beet 
growers, especially are assured with reasonable income estimated at 37-42 USD per tone, furthermore particularly on the north of the country there are entirely villages with peopl e directly dependent on 
these incomes that appear to be  the only income source.   Sugar producing companies data  2004 2005 2006 2007 
est. 
Profits Mil. USD 0.5 5 5.7 1.9 
Capital investments Mil. USD 2.2 3.6 8.1 7.0 G/SG/N/8/MDA/2 
G/SG/N/10/MDA/2 G/SG/N/11/MDA/3 
Page 6 
  
   In the context of higher productive efficiency and of the price of sugar b eet there is created a 
medium of ascendant lunch of field industry.  Though the rise level of productivity (with 129 per 
cents), experts are a sserting that the performance of 150-170 tone of sugar per employer could be 
possible to realize during 5-8 years.   
  For competitive reasons and maintaining the de velopment course of the industry, there is a 
certainly need of the implementation of a complex investment program in the next years.  If the field will not be given with the opportunity and time period  to complete its track evolution – appears the 
admonition of a new threat of vast imports that will damage all the positive reached enlargements.    
   G/SG/N/8/MDA/2
 G/SG/N/10/MDA/2
 G/SG/N/11/MDA/3
 Page 7II. VOLUME AND SHARE OF IMPORTS 
IMPORTS OF SUGAR OF TH E REPUBLIC OF MOLDOVA   
During 2004-2007 years   
2004 2005 2006 2007 est. 
Quantity Share Quantity Share Quantity Share Quantity Share HS 
Code  Description 
tonne % tonne % tonne % tonne % 
Cane or beet sugar and chemically pure sucrose, 
in solid form 284,6 100,0 7977,2 100,0 317,4 100,0 20,8 100,0 
which from:                 
CIS Countries 2,0 0,7 4,5 0,1 22,8 7,2 1,0 4,8 
Russia 0,6 0,2 0,2 0,0 20,4 6,4 0,6 2,8 
Ukraine 1,4 0,5 4,3 0,1 2,4 0,8 0,4 1,9 
EU Countries 221,0 77,7 7950,4 99,7 266,8 84,1 13,6 65,4 
Austria 200,1 70,3 100,2 1,3 250,0 78,8 0,0 0,0 
Belgium 0,0 0,0 100,0 1,3 0,0 0,0 0,0 0,0 
Czech Republic 3,0 1,1 4222,0 52,9 0,0 0,0 0,0 0,0 
France 0,4 0,1 0,2 0,0 0,1 0,0 0,4 1,9 
Germany 5,3 1,9 7,0 0,1 9,2 2,9 3,9 19,3 
Italy 1,4 0,5 0,2 0,0 0,2 0,1 0,3 1,4 
Netherlands 9,1 3,2 6,8 0,1 7,3 2,3 5,6 26,9 
Slovakia 0,0 0,0 3514,0 44,1 0,0 0,0 0,0 0,0 
Central and East European  Countries* 4,9 1,7 1,8 0,0 6,3 2,0 - - 
Romania* 4,9 1,7 1,8 0,0 6,3 2,0 3,3 15,7 
Other 56,7 19,9 20,5 0,3 21,5 6,8 16,2 80,8 
Brazil 25,0 8,8 0,0 0,0 0,0 0,0 0,0 0,0 
China 0,1 0,0 0,1 0,0 0,0 0,0 0,0 0,0 
Mauritania 0,0 0,0 0,0 0,0 0,3 0,1 0,0 0,0 
Mauritius 0,0 0,0 0,2 0,0 0,1 0,0 0,2 1,0 
Serbia 0,0 0,0 0,0 0,0 0,0 0,0 0 0,0 
Switzerland 2,2 0,8 0,8 0,0 0,5 0,2 2,0 9,6 
Turkey 0,3 0,1 0,4 0,0 0,0 0,0 0,0 0,0 1701 
USA 29,1 10,2 19,0 0,2 20,6 6,5 14,0 67,3  
  G/SG/N/8/MDA/2 
G/SG/N/10/MDA/2 
G/SG/N/11/MDA/3 
Page 8 
IMPORTS OF SUGAR OF TH E REPUBLIC OF MOLDOVA   
During 2004-2007 years   
2004 2005 2006 2007 est. 
Quantity Share Quantity Share Quantity Share Quantity Share HS 
Code  Description 
tonne % tonne % tonne % tonne % 
Other sugars, including ch emically pure lactose, 
maltose, glucose and fructose, in solid form; sugar syrups not containing added flavoring or coloring matter;  artifici al honey, whether or not 
mixed with natural honey;  caramel 437,3 100,0 1947,9 100,0 3228,5 100,0 2000,5 100,0 
which from:                 
CIS Countries 98,9 22,6 1657,8 85,1 2965,5 91,9 1963,3 98,1 
Russia 0,2 0,0 1326,4 68,1 282,9 8,8 5,9 0,3 
Ukraine 98,7 22,6 331,4 17,0 2682,6 83,1 1957,4 97,8 
EU Countries 27,1 6,2 13,2 0,7 27,4 0,8 25,1 1,3 
Austria 3,1 0,7 2,4 0,1 1,3 0,0 2,0 0,1 
Belgium 0,0 0,0 0,0 0,0 4,6 0,1 0,0 0,0 
Finland 0,2 0,0 0,3 0,0 0,7 0,0 1,6 0,1 
France 5,5 1,3 0,0 0,0 0,0 0,0 0,0 0,0 
Germany 10,9 2,5 1,8 0,1 4,2 0,1 1,2 0,1 
Italy 4,1 0,9 3,0 0,2 0,0 0,0 0,0 0,0 
Netherlands 1,5 0,3 4,6 0,2 0,0 0,0 0,4 0,0 
Poland 0,8 0,2 0,0 0,0 15,3 0,5 0,0 0,0 
Central and East European Countries* 311,1 71,1 263,5 13,5 230,2 7,1 - - 
Romania * 311,0 71,1 263,5 13,5 230,2 7,1 19,9 1,0 
Other 0,2 0,0 13,4 0,7 5,4 0,2 12,1 0,6 
China 0,0 0,0 6,2 0,3 0,5 0,0 10,8 0,5 1702 
USA 0,0 0,0 6,1 0,3 3,9 0,1 1,2 0,1 
          
*NOTE:  From 2007 Romania is calculated as part of EU.           
  G/SG/N/8/MDA/2 
 G/SG/N/10/MDA/2 
 G/SG/N/11/MDA/3 
 Page 9 
  
  III. DESCRIPTION OF THE PRODUCT INVOLVED 
 Cane or beet sugar and chemically pure sucro se, in solid form are classified under the tariff 
heading 1701.   
 
• Raw sugar not containing added fl avoring or coloring matter:   
• Containing added flavoring or coloring matter 
• Other 
  Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form;  
sugar syrups not containing added flavoring or colo ring matter; artificial honey, whether or not mixed 
with natural honey;  caramel classified under the tariff lines:    
 
• 1702 90 790 
• 1702 90 990 
  Other, including invert sugar and other sugar and sugar syrup blends containing in the dry 
state 50 per cent by weight of fructose classified under the tariff line:    
• 2106 90 590 
 Description of domestic product
 
  The Moldovan sugar industry produces " beet sugar " classified under tariff position 1701.99.  
The beet sugar is derived from juices obtained by  extraction from the root of the sugar beet.   
 
Technical data, description of characteristics and form of use
 
  Technical data :  White granulated beet sugar, GOST 21-94.   
 
Description of imported product
 
  The imported products are like products of the domestic product.     The imported product is classified under the ta riff headings 1701 - "Cane or beet sugar and 
chemically pure sucrose, in solid form" than  the Moldovan product, "Other sugars, including 
chemically pure lactose, maltose, glucose and fructo se, in solid form;  sugar syrups not containing 
added flavoring or coloring matter;  artificial hone y, whether or not mixed with natural honey;  
caramel" classified under the tariff lines:  1702 90  790, 1702 90 990 and "Other, including invert 
sugar and other sugar and sugar sy rup blends containing in the dry state 50 per cent by weight of 
fructose classified under the tariff line 2106 90 590.   
 
IV. PRECISE DESCRIPTION OF THE PROPOSED MEASURE 
(i) The proposed safeguard measure consists of a dditional duty to be paid on imports of products 
classified as follows:   G/SG/N/8/MDA/2 
G/SG/N/10/MDA/2 G/SG/N/11/MDA/3 
Page 10 
  
  • Cane or beet sugar and chemically pure sucrose, in solid form – tariff lines:   
  
• Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form – 
tariff lines: 1702 90 790, 
1702 90 990.   
 
• Food preparations not elsewhere specified or included:  2106 90 590.   
  The additional import duty will be applied for a period of 4 years, declining through the 
period of application as follows:   
 
1-st year 2-nd year 3-rd year 4-th year 
39% 38% 37% 36% 
 
(ii) This measure will be applied to all imports of  sugar.  The imports of sugar, originating from 
developing countries, except Brazil and Cuba will be exempted from additional import duties.   
 
V. PROPOSED DATE OF INTRODUCTION OF THE MEASURE 
 The measure will be introdu ced on 16 February 2008.   
 VI. EXPECTED DURATION OF THE MEASURE 
 The safeguard measure is expected to apply for a period of 4 years.   
 
VII. PROPOSED DATE FOR REVIEWING THE MEASURE 
If it is decided that the measure will indeed remain effective for a period of 4 years, it will be 
reviewed in each year.   
 
VIII.  EXPECTED TIMETABLE FOR PR OGRESSIVE LIBERALIZATION 
 See above in item 4.   
 
IX. INFORMATION RELATING TO THE EXTENSION OF THE MEASURE 
(i) Evidence that the industry conc erned is adjusting and that the sa feguard measure continues to be 
necessary to prevent or remedy serious injury 
  Safeguard measures adopted through the Law nr. 8-XV from 5 February 2004 as a special 
duty at the sugar import will expire on 15 February  2008.  During the 4 years of implementation of 
this measure, the industry succeeds to register progresses on the efficiency development and on 
competitiveness.  The situation of agricultural fa rms was improved through the implementation of 
advanced technologies of beet sugar cultivation.  Thus, the harvest of beet of 2006 year reached 
32.5 tonnes/ha comparing to 17 tones/ha in 2003 .  The created conditions resulted from safeguards 1701 11 100 1701 12 100 1701 91 000 
1701 11 900 1701 12 900 1701 99 100 
  1701 99 900  G/SG/N/8/MDA/2 
 G/SG/N/10/MDA/2 
 G/SG/N/11/MDA/3 
 Page 11 
  
  application permitted to sugar producers to invest  more then 19 mil. USD that has as result the 
reduction of energy consumption with 24 per cen t and production loses with 18 per cent.   
 
 The sugar industry during fifteen years before the safeguard measure did not benefit of any 
investments and of development conditions and the caused injury was to o significant for being 
eliminated in just four years period of safeguards.     The branch investment program for the next  5-8 years requires a financial effort of 
120 mil. USD.  The mentioned program foresees  investment both in the industrial sector and 
agricultural one.  The purpose of the investments is  to improve the beet processing efficiency, the 
reduction of ecological risks and the implementation of advanced technologies in the agriculture.    (ii) Reference to the WTO document that noti fied the initial application of the measure 
 
 The document that notified the initial app lication of the safegu ard measure dated to 
30 September 2003 were:    (iii) Duration of the measure from initial appli cation till the date at wh ich it will be extended 
 
 The application of safeguard measure of sugar imports in Mol dova was initiated at 
16 February 2004 and will be ex tended until 16 February 2012.   
 (iv) Precise description of the meas ure in place prior to the date of extension (in this context, please 
note that the last sentence of Article 7.4 states th at:  "A measure extended under paragraph 2 shall not be 
more restrictive than it was at the end of the initi al period, and should contin ue to be liberalized"). 
 
 The Law of the Republic of Moldova nr. 8 from 05 February 2004 establish an exceptional special tax for products under tariff lines:    
• Cane or beet sugar and chemically pure sucrose, in solid form – tariff lines: 
  
 
   
• Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid 
form – tariff lines: 1702 90 790, 
1702 90 990.   
 
• Food preparations not elsewhere specified or included:  2106 90 590.   1701 11 100 1701 12 100 1701 91 000 
1701 11 900 1701 12 900 1701 99 100 
  1701 99 900 G/SG/N/8/MDA/2 
G/SG/N/10/MDA/2 G/SG/N/11/MDA/3 
Page 12 
  
  NOTIFICATION UNDER ARTICLE 9, FOOTNOTE 2 
 
I. DESCRIPTION OF THE MEASURE 
 The proposed safeguard measure consists of a dditional duty to be paid on imports of products 
classified within HS 1701, 1702, 2106 90 590.  The a dditional import duty will be applied for a period 
of 4 years, declining through the period of application as follows:    
1-st year 2-nd year 3-rd year 4-th year 
39% 38% 37% 36% 
 
 This measure will be applied to all imports of sugar.  Import of sugar, originating from 
developing countries, except Brazil and Cuba will be exempted from additional import duties.   
 II. DESCRIPTION OF THE PRODUCT CONCERNED BY THE MEASURE 
• Cane or beet sugar and chemically pure sucrose, in solid form – tariff lines:   
  
• Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid 
form – tariff lines: 1702 90 790, 
1702 90 990.   
 
• Food preparations not elsewhere specified or included:  2106 90 590.   
  
III. DEVELOPING COUNTRIES TO WHICH THE MEASURE DOES NOT APPLY 
PURSUANT TO ARTICLE 9.1 OF THE AGREEMENT ON SAFEGUARDS, AND 
THE IMPORT SHARES OF THESE COUNTRIES INDIVIDUALLY AND 
COLLECTIVELY 
 Pursuant article 9.1 the safeguard measure will not be applied to developing and least 
developed countries of the WTO.    
IV. CHANGE IN THE LIST OF DEVELOPI NG COUNTRIES EXEMPTED FROM THE 
SAFEGUARD MEASURE PURSUANT TO ARTICLE 9.1 
 Not applicable.   
  
__________ 
 
 1701 11 100 1701 12 100 1701 91 000 
1701 11 900 1701 12 900 1701 99 100 
  1701 99 900