UKRAINE – DEFINITIVE SAFEGUARD MEASURES ON CERTAIN PASSENGER CARS REQUEST FOR THE ESTABLISHMENT OF A PANEL BY JAPAN
Document: REQUEST FOR THE ESTABLISHMENT OF A PANEL
Date: 14 February 2014
Document codes: WT/DS468/5
Complainant: Japan
Respondent: Ukraine
Third parties: EU, India, South Korea, Russia, Turkey, Australia, U.S.
Dispute stage: Panel
Agreements cited: Art. 12.1, 12.2, 12.3, 12.5, 8.1, 3.1, 4.2(c), 2.1, 11.1(a), 5.1, 7.1, 7.4, 4.2(a), 4.2(b), 4.1(a), 4.1(b)  SafeguardsArt. X:3(a), XIX:1, II:1(b)  GATT 1994

UKRAINE – DEFINITIVE SAFEGUARD MEASURES ON CERTAIN PASSENGER CARS
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY JAPAN
The following communication, dated 13 February 2014, from the delegation of Japan to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On 30 October 2013, Japan requested consultations with the Government of Ukraine ("Ukraine")
pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes ("DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994
("GATT 1994") and Article 14 of the Agreement on Safeguards regarding the definitive safeguard
measures imposed by Ukraine on imports of certain passenger cars and the investigation that led
to the imposition of those measures.
1

Japan held consultations with Ukraine on 29 November 2013 and 21 January 2014. Unfortunately
those consultations failed to resolve the dispute.

I. BACKGROUND AND MEASURES AT ISSUE

1. Initiation of the safeguard investigation

On 30 June 2011, the Inter-Departmental Commission for International Trade (hereinafter referred
to as "the Commission") adopted decision No. SP-259/2011/4402-27 whereby it initiated an
investigation with a view to the application of the safeguard measures on imports of certain
passenger cars to Ukraine regardless of their country of origin or their country of export. The
Commission decision was taken further to a complaint lodged by the Association of Ukrainian
Vehicle Manufacturers "UkrAvtoprom" on behalf of three Ukrainian automobile manufacturers.
A Notice of the Commission decision of initiation was published in the "Uryadoviy Kuryer" No. 118
of 2 July 2011.

2. Investigation and Final Determination

In the course of the investigation, the Commission adopted on 6 March 2012 decision No.
SP-272/2012/4423-08 whereby it extended the duration of the investigation by 60 days. A Notice
concerning this decision was published in the "Uryadoviy Kuryer" No. 44 on 7 March 2012.

On 11 April 2012, the Ministry of Economic De velopment and Trade of Ukraine sent to the
Embassy of Japan a document called "Main Conclusions of Report and Materials prepared by the
Ministry".

On 28 April 2012, the Commission approved decision No. SP-275/2012/4423-08 (hereinafter
referred to as the "Decision") according to which the safeguard measures shall be imposed on
imports of the product concerned to Ukraine, in the form of the following two additional duties:

1 WT/DS468/1, G/L/1055, G/SG/D46/1.

– for cars of a cylinder capacity exceeding 1000 cm 3 but not exceeding 1500 cm 3:
6.46%

– for cars of a cylinder capacity exceeding 1500 cm 3 but not exceeding 2200 cm 3:
12.95%

The product concerned involved motor cars and other motor vehicles principally designed for the
transport of persons (category M1 – vehicles with no less than 4 wheels and no more than 8 sitting
places except the driver's sitting place), with spark-ignition internal combustion engine and crank
gear of a cylinder capacity exceeding 1000 cm
3 but not exceeding 2200 cm3, new, classified under
UKTZED codes 8703 22 10 00 and 8703 23 19 10.

The Notice concerning the Decision was published in the "Uryadoviy Kuryer" No. 48 on
14 March 2013. The Decision itself has not been published.

The safeguard measures entered into force 30 days after the publication of the Notice. It provides
that the measures will have a duration of three years.

The measures at issue in this dispute cover all decisions and notices of the authorities mentioned
above as well as any related measures and amen dments or replacement measures taken by the
authorities in relation to this investigation and/or the imposition of the safeguard measures.

II. LEGAL BASIS FOR THE CLAIMS

Japan is deeply concerned by the safeguard measures imposed by Ukraine and the underlying
investigation that led to the imposition of those measures. Specifically, Japan considers that:

(1) Ukraine failed to comply with Article 12.1 of the Agreement on Safeguards since it
failed to notify immediately the Committee on Safeguards upon (a) initiating an
investigation relating to serious injury or threat thereof and the reasons for it;
(b) making a finding of serious injury or threat thereof caused by increased imports;
and (c) taking a decision to apply or extent a safeguard measure.

(2) Ukraine failed to comply with Article 12.2 of the Agreement on Safeguards as it failed
in making the notifications referred to in paragraphs 1(b) and 1(c) of Article 12 of the
Agreement on Safeguards to the Committee on Safeguards to provide all pertinent
information including, but not limited to, evidence of serious injury or threat thereof
caused by increased imports and timetable for progressive liberalization.

(3) Ukraine failed to comply with Article 12.3 of the Agreement on Safeguards since it
failed to provide adequate opportunities for prior consultations on the proposed
measure, with a view to reviewing the information provided under Article 12.2 with
WTO Members having a substantial interest as exporters of the product concerned.
Ukraine also failed to comply with Article 12.5 of the Agreement on Safeguards since
it did not notify immediately to the Council for Trade in Goods the results of any
consultations referred to in Article 12 of the Agreement on Safeguards.

(4) Ukraine failed to comply with Article 8.1 of the Agreement on Safeguards since it did
not endeavour to maintain a substantially equivalent level of concessions and other
obligations to that existing between Ukraine and Japan under the GATT 1994 in
accordance with Article 12.3 of the Agreement on Safeguards.

(5) Ukraine failed to publish a report setting forth its findings and reasoned conclusions
reached on all pertinent issues of fact and law and a detailed analysis of the case
under investigation as well as a demonstration of the relevance of the factors
examined, thereby acting inconsistently with Articles 3.1 and 4.2(c) of the Agreement
on Safeguards.

(6) Ukraine applied the safeguard measures more than two years after the end of the
investigation period, and therefore failed to have determined the increased import on
the basis of the increase in imports that must have been sudden and recent, thereby
acting inconsistently with Articles 2.1 and 11.1(a) of the Agreement on Safeguards

and Articles X:3(a) and XIX(a) of the GATT 1994. When applying the safeguard
measures, Ukraine also failed to properly conduct, on the basis of such data, the
investigation that includes reasonable public notice to all interested parties and the
opportunities for them to present evidence and their views, and failed to publish a
report and a detailed analysis of the case as well as a demonstration of the relevance
of the factors examined, thereby acting incons istently with Articles 3.1 and 4.2(c) of
the Agreement of Safeguards.

(7) Ukraine imposes the safeguard measures beyond the extent necessary to prevent or
remedy serious injury and to facilitate adjustment. Ukraine did not provide for a
timetable for progressive liberalization to facilitate adjustment , inter alia , in its
determination and its WTO notification, at regular intervals during the period of
application. Therefore, Ukraine acts inconsiste ntly with Articles 3.1, 4.2(c), 5.1, 7.1,
7.4, 11.1(a) and 12.2 of the Agreement on Safeguards and Article XIX:1(a) of the
GATT 1994.

(8) Ukraine failed to make reasoned and adequate findings and conclusions in its
determination with respect to the alleged unforeseen developments and explanation of
how those alleged unforeseen developments resulted in increased imports of the
specific products covered by the safeguard measures, causing serious injury.
Therefore, Ukraine acts inconsistently with Articles 3.1, 4.2(c) and 11.1(a) of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.

(9) Ukraine failed to make reasoned and adequate findings and conclusions in its
determination as to the alleged effect of obligations incurred under the GATT 1994
and as to how that effect has resulted in increased imports of the specific products
covered by the safeguard measures, causing serious injury. Therefore, Ukraine acts
inconsistently with Articles 3.1, 4.2(c) and 11.1(a) of the Agreement on Safeguards
and Article XIX:1(a) of the GATT 1994.

(10) Ukraine failed to make reasoned and adequate findings and conclusions in its
determination with respect to the alleged increase in imports of the specific products
under investigation, in absolute terms or relative to domestic production. Therefore,
Ukraine acts inconsistently with Articles 2.1, 3.1, 4.2(a), 4.2(c) and 11.1(a) of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.

(11) Ukraine failed to make reasoned and adequate findings and conclusions in its
determination as to the existence of an alleged serious injury and/or threat of serious
injury. Therefore, Ukraine acts inconsistently with Articles 2.1, 3.1, 4.1(a), 4.1(b),
4.2(a), 4.2(b), 4.2(c) and 11.1(a) of the Agreement on Safeguards and Article
XIX:1(a) of the GATT 1994.

(12) Ukraine failed to make reasoned and adequate findings and conclusions in its
determination as to the causal link between the alleged increase in imports and the
alleged serious injury and/or threat of inju ry of the domestic industry. In particular,
there are no reasoned and adequate findings and conclusions substantiating the
causal relationship between the alleged increased imports and the alleged serious
injury and/or threat of injury to the domestic industry nor explanations as to how the
alleged injury and/or threat of injury to th e domestic industry caused by factors other
than imports was not attributed to the increased imports. Therefore, Ukraine acts
inconsistently with Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.2(a), 4.2(b), 4.2(c) and 11.1(a)
of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.

(13) Through the safeguard measures, Ukraine imposes duties which are in excess of those
set forth in its schedule, thereby violating Article II:1(b) of the GATT 1994.

Ukraine's measures therefore nullify and impair benefits accruing to Japan under the Agreement
on Safeguards and the GATT 1994.

Accordingly, Japan respectfully requests that, pursuant to Article 6 of the DSU, Article XXIII of the
GATT 1994 and Article 14 of the Agreement on Safeguards, the Dispute Settlement Body establish

a Panel to examine this matter, with the standard terms of reference as set out in Article 7.1 of
the DSU.

In view of the 3-year validity of the safeguard me asures at issue and to ensure that the dispute
settlement system provides an effective solution to this dispute, Japan hopes that the panel will
issue the final report to the parties as soon as possible, and in any case not later than the period
of six months from the date that the composition and terms of reference of the panel were agreed
upon, as stipulated in Article 12.8 of the DSU.

Japan asks that this request be placed on the agenda for the meeting of the Dispute Settlement
Body to be held on 26 February 2014.