RUSSIA – MEASURES CONCERNING TRAFFIC IN TRANSIT OF UKRAINIAN PRODUCTS REQUEST FOR CONSULTATIONS BY UKRAINE
Document: REQUEST FOR CONSULTATIONS BY
Date: 21 September 2016
Document codes: WT/DS512/1; G/L/1151
Complainant: Ukraine
Respondent: Russia
Third parties: Australia, Bolivia, Plurinational State of, Brazil, Canada, Chile, China, EU, India, Japan, South Korea, Moldova, Norway, Paraguay, Saudi Arabia, Singapore, Turkey, U.S.
Dispute stage: Panel
Agreements cited: Art. V:2  GATT 1994  Protocol of Accession, Art. V:4, V:5, XI:1, X:1, X:2, X:3(a)  GATT 1994

RUSSIA – MEASURES CONCERNING TRAFFIC IN
TRANSIT OF UKRAINIAN PRODUCTS
REQUEST FOR CONSULTATIONS BY UKRAINE
The following communication, dated 14 September 2016 , from the delegation of Ukraine to the
delegation of Russia and to the Chairperson of the Dispu te Settlement Body, is circulated in
accordance with Article 4.4 of the DSU.

 My authorities have instructed me to request consultations with the Government of the
Russian Federation pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU") and Article XXII of the General Agreement on
Tariffs and Trade 1994 ("GATT 1994") concerning multiple restrictions on traffic in transit from the
territory of Ukraine through the territory o f the Russian Fede ration to third countries
("the restrictions on traffic in transit").

I. Background

The restrictions on traffic in transit that the Russian Federation has recently adopted and
implemented following Ukraine's decision to start the implem entation of the Deep and
Comprehensive Free Trade Area with the European Union on 1 January 2016 constitute measures
inconsistent with the Russian Federation's WTO obligations.

Ukrainian exports to countries in Central/Eastern Asia and Caucasus have been significant
and growing. In order to reach those markets, most Ukrainian exports have traditionally transited
from the territory of Ukraine through the territory of the Russian Federation to those countries
(See picture 1).
 •

Picture 1
Transit through the territory of the Russian Federation (mln. USD)

Source: National statistics 2015, State Fiscal Service of Ukraine.

Since the measures at issue are applied to Ukrainian products, trade to countries in
Central/Eastern Asia and Caucasus in January -June2016 decreased by 35,1 % in comparison with
the same months of 2015.

Almost all the trade affected by the Russian Federation's restrictions on traffic in transit
takes place by means of road and railway and passes through the territory of the Russian
Federation.

The commitments undertaken by the countries that have joined the WTO which are
receiving Ukrainian goods in transit through the Russian Federation, in particular the commitments
made by the Republic of Kazakhstan and the Kyrgyz Republic, created addit ional market access
opportunities for Ukrainian producers. The actions of the Russian Federation, in particular the
transit restrictions covered by this Request for Consultations, seriously undermine the active
efforts of the Ukrainian Government and busin esses to open those markets and will impede
Ukraine's ability to seize the new opportunities obtained through the WTO accession negotiations.

On 1 January 2016, the Decree of the President of the Russian Federation No.1 1 was issued
"in connection with the suspension from 1 January 2016 of the Treaty on a Free Trade Area … with
regard to Ukraine". It is set forth that "in accordance with the Federal Law of the Russian
Federation No. 281-FZ of 30 December 2006 "On the Special Economic Measures" it is resolved "to
establish that the international road and railway transit of goods from the territory of Ukraine to
the territory of the Republic of Kazakhstan through the territory of the Russian Federation …can be

1 Decree of the President of the Russian Federation of 1 January 2016 No. 1 "On measures to ensure
economic security and national interests of the Russian Federation in international cargo transit from the
territory of Ukraine to the territory of Kazakhstan through the territory of the Russian Federation" (through the
Decree of the President of the Russian Federation of 1 July 2016 No. 319, the title of the Decree of the
President of t he Russian Federation of 1 January 2016 No. 1was amended by adding the words "or to the
Kyrgyz Republic" after the words "to the territory of the Republic of Kazakhstan").
WT/DS512/1 • G/L/1151

carried out only from the territory of the Republi c of Belarus...". The above -mentioned Decree
No.1 also requires the application of special identification means (seals) using the technology of
global satellite navigation system GLONASS to cargo areas (compartments) and requires drivers to
obtain certain registration cards when entering the territory of the Russian Federation, which must
be kept during the trip and returned when leaving the territory of the country. This Decree "shall
enter into force from the date of its publication (on 1 January 2016) and is valid until 1 July 2016".

On 3 July 2016, two days after the restrictive measures set forth in the Decree of the
President of the Russian Federation of 1 January 2016 No. 1 were scheduled to expire, the Decree
of the President of the Russian Federati on of 1 July 2016 No. 319 "On amendments to the Decree
of the President of the Russian Federation of 1 January 2016 No. 1 "On measures to ensure
economic security and national interests of the Russian Federation in international cargo transit
from the terr itory of Ukraine to the territory of Kazakhstan through the territory of the Russian
Federation" was published.
This Decree prolonged the original restrictions set forth in the Decree of the President of the
Russian Federation of 1 January 2016 No. 1 unti l 31 December 2017 and imposed additional
measures as follows:
- transit of goods not only to the territory of the Republic of Kazakhstan but also to the
territory of Kyrgyz Republic shall be carried out according to the requirements of the
Decree of the President of the Russian Federation of 1 January 2016 No. 1;
- ban of transit of goods affected by the tariffs rates higher than zero according to the
Common Customs Tariff of the Eurasian Economic Union;2
- ban of transit of goods which are under embargo p ursuant to the Resolution of the
Government of the Russian Federation No. 778 of 7 August 2014 "On measures for
implementation of the Decree of the President of the Russian Federation No. 560 of 6
August 2014 and No. 320 of 24 June 2014".3
The Government o f the Russian Federation issued Resolution No. 1 of 1 January 2016 4 in
which it designates "the permanent and mobile checkpoints and the checkpoints which are located
at the railway stations and used in the road and railway transit of goods from the territ ory of
Ukraine to the territory of the Republic of Kazakhstan through the territory of the Russian
Federation" and requires that "the Federal Service for Supervision of Transport shall ensure the
use by the vehicles performing transit of the goods, as per paragraph 1 of this Resolution,
identification means (seals), including those functioning on the basis of the technology of global
satellite navigation system GLONASS". The annex lists two checkpoints in the Russian Federation –
 Republic of Belarus border and three in the Russian Federation – Republic of Kazakhstan border
(See picture 2). This Resolution also entered into force on 1 January 2016.

Only on 27 February 2016, i.e. approximately two months after the entry into force of the
Decree No. 1 and its related Resolution, the Government of the Russian Federation issued a
Resolution No. 147 "approv[ing] [….] requirements to the identification means (seals) including
those functioning on the basis of the technology of the global satellite navigation system
GLONASS"5.

2 http://www.eurasiancommission.org/ru/act/trade/catr/ett/Pages/default.aspx.
3 Resolution of the Government of the Russian Federation No.778 of 7 August 2014 "On measures for
implementation of the Decree of the President of the Russian Federation No.560 of 6 August 2014 and No.320
of 24 June 2014 " concerning the application of certain sp ecial economic measures in order to protect the
national security of the Russian Federation.
4 Resolution of the Government of the Russian Federation No.1 of 1 January 2016 "On the measures
related to the implementation of the Decree of the President of the Russian Federation of 1 January 2016 No. 1
"On measures to ensure economic security and national interests of the Russian Federation in international
cargo transit from the territory of Ukraine to the territory of Kazakhstan through the territory of the Russian
Federation".
5 Resolution of the Government of the Russian Federation No.147 of 27 February 2016 "On approval of
the requirements to the identification means (seals) including those functioning on the basis of the technology
of the global satellite navigation system GLONASS ". This Resolution was adopted "in compliance with the
Decree of the President of the Russian Federation of 1 January 2016 No. 1 "On measures to ensure economic
security and national interests of the Russian Federation in internat ional cargo transit from the territory of
Ukraine to the territory of Kazakhstan through the territory of the Russian Federation".
WT/DS512/1 • G/L/1151

The transit route imposed by the above -referred normative acts through the Republic of
Belarus increases considerably the length and duration of trips as well as costs. Administrative
procedures have also become more cumbersome as a result of having to cross an additional
border (Ukraine – Republic of Belarus). The need to obtain additional transit permits for Ukrainian
trucks to enter into the territory of the Republic of Belarus further limits the ability to access the
territory of the Russia n Federation for traffic in transit. Moreover, the new measures imposed
through Decree No. 319 effectively ban the transit of the majority of goods from the territory of
Ukraine.

Picture 2
Checkpoints of international freight as per Resolution No.1

According to the Instruction of the Federal Service for Veterinary and Phytosanitary
Surveillance of the Ministry of Agriculture of the Russian Federation (Rosselkhoznadzor) of
11 November 2014, the transit of goods subject to the application of the Resoluti on of the
Government of the Russian Federation No.778 of 7 August 2014 cannot be carried out "through
the checkpoints of the Republic of Belarus". 6 It also requires that "such goods in transit through
the territory of the Russian Federation to the Republi c of Kazakhstan and to third countries as of
30 November 2014, can cross the border of the Russian Federation only through the checkpoints
located in the Russian part of the external border of the Customs Union: [list of checkpoints] and
Russian ports". Pu rsuant to the provisions of this act, transit is subject to an additional
requirement: "the transit of such goods … to third countries shall take place upon
Rosselkhoznadzor permits" with indication of the Russian checkpoints on the external border of the
Customs Union. Evidence collected by the Ukrainian state bodies shows that since the start of
2016 the Russian Federation applies restrictions set forth under these instructions to goods
shipped by Ukrainian producers, through the territory of the Russian Federation, to third countries.

Furthermore, traffic in transit from the territory of Ukraine through the territory of the
Russian Federation to countries in Central/Eastern Asia and Caucasus is subject to restrictions
beyond those contained in the above -referred normative acts. Restrictions referred to in this
paragraph include, as a matter of example:

- the application of the restrictions set forth in Decree No. 1 and Resolution No. 1 to traffic in
transit from the territory of Ukraine to international transit of goods to countries in

6 Instruction of the Federal Service for Veterinary and Phytosanitary Surveillance of the Ministry of
Agriculture of the Russian Federation ("Rosselkhoznadzor") No.FS-NV-7/22886 of 21 November 2014.
WT/DS512/1 • G/L/1151

Central/Eastern Asia and Caucasus, other than the Republic of Kazakhstan and the
Kyrgyz Republic;
- the requirement that trucks in transit from the territory of Ukraine move in caravan and that
they be accompanied by a conv oy through the whole territory the Russian Federation. Such
caravans move twice a week and payment of a fee is required;
- the obstacles posed (or the refusal to allow) Ukrainian drivers to access the territory of the
Russian Federation via the Republic of Belarus–Russian Federation border.

The restrictions covered by this paragraph are the result of actions which are directly
attributable to the Government of the Russian Federation or to governmental bodies and agencies
from the Russian Federation.

Those restrictions are discriminatory in nature and appear to be applied only to traffic in
transit from the territory of Ukraine. Moreover, they are applied in an unpredictable manner; the
legal bases for these actions and restrictions have not been notified to the Ukrainian Government
and, at least in some instances, do not appear to have been published promptly.

Traffic in transit – i.e. the traffic covered in this Request for Consultations – is subject to the
rules provided on the provisions of Chapter 32 of the Customs Code of the Customs Union. 7 The
Report of the Working Party on the Accession of the Russian Federation sets forth that "goods in
customs transit were exempted from any customs taxes and duties or application of any economic
restrictions or prohibitions…"and "any foreign merchandise could be subject to international
customs transit…".8 The Russian Federation committed broadly to apply its "laws, regulations and
other measures governing transit of goods … in conformity with the provisions of Article V of the
GATT 1994 and other relevant provisions of the WTO Agreement".9 This commitment is reflected in
Article 31 of the Federal Law No 164-FZ of 8 December 2003 "On the Fundamentals of State
Regulation of Foreign Trade Activity".10

Ukraine has endeavoured, in good faith, to address the matter raised in this Request for
Consultations through numerous bilateral contacts with the Russian Federation as well as within
relevant WTO bodies (Communications submitted by Ukraine on this matter were distri buted by
the WTO Secretariat on 13 January 2016 and on 11 July 2016; this issue was moreover raised in
the following meetings of WTO bodies: General Council of 24 February 2016, Committee on
Agriculture of 9 March 2016, Council for Trade in Goods of 15 Apr il 2016, Committee on Technical
Barriers to Trade of 15-16 June 2016, Council for Trade in Goods o f 14 July 2016, General Council
of 27 July 2016).

II. Measures at issue

The measures at issue are the following:
II.1. Decree of the President of the Russian Federation of 1 January 2016 No. 1 "On measures
to ensure economic security and national interests of the Russian Federation in
international cargo transit from the territory of Ukraine to the territory of Kazakhstan
through the territory of the Russian Federation" as amended by the Decree of the
President of the Russian Federation of 1 July 2016 No. 319 "On amendments to the
Decree of the President of the Russian Federation of 1 January 2016 No. 1 "On measures
to ensure economic security and national int erests of the Russian Federation in
international cargo transit from the territory of Ukraine to the territory of Kazakhstan
through the territory of the Russian Federation";

7 Document WT/ACC/RUS/70 and WT/MIN(11)/2, para. 1146. Procedures on trade in transit are
developed through national legislation. The Customs Code of the Customs Union is available
at:http://bit.ly/1Q6TSN1.
8 Document WT/ACC/RUS/70 and WT/MIN(11)/2, para. 1147. The Protocol on the Accession of
Kazakhstan contains the same description of the currently applicable normative framework (Document
WT/ACC/KAZ/93, para. 952).
9 Document WT/ACC/RUS/70 and WT/MIN(11)/2, para. 1161. In this regard, Kazakhstan committed to
ensure that "all goods, …, entering the [Eurasian Economic Union] territory for import in Kazakhstan would
benefit from the rules on transit a s they are set out in the WTO Agreement, including Article V of the
GATT 1994, irrespective of prohibitions or restrictions of imports into its own territory that a specific [Eurasian
Economic Union] member may apply" (Document WT/ACC/KAZ/93, para. 307).
10 Procedures on freedom of transit are developed through national legislation. Document is available
at:http://economy.gov.ru/minec/activity/sections/foreigneconomicactivity/fz164.
WT/DS512/1 • G/L/1151

II.2. Resolution of the Government of the Russian Federation No. 1
of 1 January 2016 "On the measures related to the implementation of the Decree of the
President of the Russian Federation of 1 January 2016 No. 1 "On measures to ensure
economic security and national interests of the Russian Federation in international cargo
transit from the territory of Ukraine to the territory of Kazakhstan through the territory
of the Russian Federation";
II.3. Resolution of the Government of the Russian Federation No. 147 of 27 February 2016
"On approval of requirements to the identification means ( seals) including the ones
functioning on the basis of the technology of global satellite navigation system
GLONASS";
II.4. The Federal Law No. 281-FZ of 30 December 2006 "On the special economic measures";
II.5. Instruction of the Federal Service for Veter inary and Phytosanitary Surveillance of the
Ministry of Agriculture of the Russian Federation ("Rosselkhoznadzor") No. FS-NV-
7/22886 of 21 November 2014;
II.6. The restrictions on traffic in transit from the territory of Ukraine to countries other than
the Republic of Kazakhstan through the territory of the Russian Federation applied by
the Russian Federation since January 2016, as evidenced by the information available to
the Government of Ukraine referred to in Section I;
II.7. The failure to publish pro mptly the measures made effective by the Russian Federation
restricting traffic in transit from the territory of Ukraine through the territory of the
Russian Federation to countries other than Kazakhstan;
II.8. The failure to officially publish the measure or measures restricting traffic in transit from
the territory of Ukraine through the territory of the Russian Federation to countries other
than the Republic of Kazakhstan before such measures are enforced.
Due to the fundamental lack of transparency conc erning some of the measures at issue and
the Russian Federation's failure to observe the transparency and publication obligations of the
GATT 1994 and of its Protocol of Accession, this Request for Consultations also covers: legal
instruments or any other form of a measure adopted and/or implemented by the Russian
Federation aimed at restricting, inconsistently with paragraphs 2 to 5 of Article V of the GATT 1994
and commitments undertaken in the Protocol on the Accession of the Russian Federation, traffic in
transit from the territory of Ukraine to countries in Central/Eastern Asia and Caucasus through the
territory of the Russian Federation, whether of, inter alia, a legislative, regulatory, administrative,
executive or judicial nature; and, notices or gui dance issued to Governmental bodies and agencies
or importers in the Russian Federation to assist them with the implementation and/or application
of all legal instruments or any other form of measure adopted and/or implemented by the Russian
Federation aimed at restricting traffic in transit.

In addition, this Request also covers in whatever form: any amendments, supplements, or
extensions to or of the measures referred to in this Section; any measures replacing, renewing or
implementing the measures referred to in this Section; and, any measures related to the measures
referred to in this Section.

III. Legal basis for the complaint

Ukraine considers that the measures referred to in section II above are inconsistent with
several of the Russian Federation's WTO obligations, including, but not limited to:
III.1. Article V:2 of the GATT 1994 because, after the adoption and application of the
measures at issue, the Russian Federation denies freedom of transit through the
territory of the Russian Federation, vi a the routes most convenient for international
transit, for traffic in transit from the territory of Ukraine and because the Russian
Federation makes distinctions based on the flag of vessels, the place of origin,
departure, entry, exit or destination, or on any circumstances relating to the ownership
of goods, of vessels or of other means of transport;
III.2. Article V:3 of the GATT 1994 because, as a result of the adoption and application of the
measures at issue, traffic in transit coming from Ukraine is subject to unnecessary
delays and restrictions;
WT/DS512/1 • G/L/1151

III.3. Article V:4 of the GATT 1994 because the charges and regulations imposed by the
Russian Federation on traffic in transit from the territory of Ukraine through the
measures at issue are not reasonable and have no regard to the conditions of the traffic;
III.4. Article V:5 of the GATT 1994 because, as a result of adoption and application of the
measures at issue, the Russian Federation fails to accord no less favourable treatment to
traffic in transit f rom the territory of Ukraine than the treatment accorded to traffic in
transit to or from any third country;
III.5. Article X:1 of the GATT 1994 because laws, regulations, judicial decisions and
administrative rulings of general application, made effective by the Russian Federation,
have not been published promptly in such a manner as to enable the Ukrainian
Government and traders to become acquainted with them;
III.6. Article X:2 of the GATT 1994 because the Russian Federation is enforcing a measure or
measures of general application imposing new or more burdensome requirements,
restrictions or prohibitions on imports before such measure or measures have been
officially published;
III.7. Article X:3 (a) of the GATT 1994 because the Russian Federation fails to administer in a
uniform, impartial and reasonable manner all its laws, regulations, decisions and rulings
of the kind described in Article X:1 of the GATT 1994;
III.8. Article XI:1 of the GATT 1994 because the measures at issue establish quantitative
restrictions;
III.9. Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization
because the Russian Federation, through the adoption and application of the measures
at issue, is not ensuring the conformity of its laws, regulations and administrative
procedures with its obligations as provided in the annexed Agreements; and
III.10. Paragraph 2 of Part I of the Protocol on the Accession of the Russian Federation
(WT/MIN(11)/24 and WT/L/839) ("the Accession Protocol"), which incorporates
commitments in paragraphs 1161, 1426 (first sentence), 1427 (first and third
sentences), and 1428 of the Report of the Working Party on the Accession of the Russian
Federation (WT/ACC/RUS/70 and WT/MIN(11)/2) ("Working Party Report").
These violations nullify or impair benefits accruing to Ukraine directly or indirectly under the
covered agreements and impede the attainment of objectives thereunder, within the meaning of
Article XXIII:1 of the GATT 1994. In addition to violating covered agreements, the measures of the
Russian Federation referred to in section II are frustrating Ukraine's legitimate market access
expectations to countries other than the Russian Federation.

Ukraine reserves the right to request the Russian Federation to produce further inform ation
and documents regarding the measures in question. In light of the lack of transparency on the
adoption and implementation of measures affecting, limiting, restricting, impeding or banning
traffic in transit from the territory of Ukraine, Ukraine also reserves its right to raise additional
facts and claims and address additional measures during the course of these consultations and in
any future request for panel proceedings.

Ukraine looks forward to the Russian Federation's reply to this request, and to fixing a
mutually acceptable date to hold consultations.