В статье исследуются антидискриминационные меры, которые могут применяться Украиной за дискриминационную или недружественную практику на иностранных рынках стран, не являющихся членами ВТО (Всемирной торговой организации). Авторы сравнивают эффективность таких мер с другими возможными мерами противодействия подобной практике.
Needless to say, after accession to the WTO .a 2008, Ukraine has acquired additional tools aimed at removing trade barriers for its national industries on foreign markets (WTO members only) by gaining access to an efficient dispute settlement system. At the same time, Ukraine enjoys rather limited “tools” in relations with non-WTO members, first of all with post-Soviet countries (even with those countries with which it has free trade agreements (the FTA) since most of the FTAs concluded by Ukraine do not stipulate efficient dispute settlement instruments, except for bilateral consultations. Hence, in order to fill in the above “loophole”, anti-d’scriminatory measures may be applied against the discriminatory or unfriendly actions of other countries. Notably, the above measures are frequently used by other CIS countries, including Belarus, Russia, Kazakhstan.
In this article we aimed to focus on the “nature” of the anti-discriminatory n leasures, outlining a brief overview of the relevant preconditions to be met for the imposition thereof as well as commenting on the pertinent procedures.
Legislative framework
The issues of anti-discrimina-tory measures are addressed by Article 29 of Foreign Economic Activity Act of 16 April 1991 (the Act), which generally regulates counteractions that can be applied against discriminatory and unfriendly actions of foreign countries, customs unions or economic groupings (foreign countries). A detailed regulation of the relevant proceedings is provided by the Resolution of the Cabinet of Ministers of Ukraine On Approval of the Order for Conducting Investigations aimed at Establishment of the Facts of Discriminatory and/or Unfriendly Acts on the Part of Foreign States, Customs Unions or Economic Groupings in respect of Legal Rights and Interests of Subjects of Foreign Activity of Ukraine[1] (the Resolution). The Resolution stipulates that the anti-discriminatory measures may be applied only as a result of the relevant anti-discriminatory investigations to be conducted under the provided procedure.
Discriminatory and/or unfriendly actions
The Act is silent on what should be understood by discriminatory or unfriendly actions that can be subject to anti-discriminatory measures. However, the Resolution provides that any actions that can result in worsening the position of Ukrainian legal entities as compared to foreign legal entities and in limiting their lawful rights and interests on the territory of the foreign countries shall be regarded as discriminatory or unfriendly actions. It goes without saying that such wording is ambiguous.
Thus, it is worth focusing on the relevant practice of the Ukrainian authorities. Based on the publicly available information on the anti-discriminatory investigations conducted in Ukraine, the following actions of foreign countries were regarded as discriminatory and/ or unfriendly actions: application by Belarus of a 15% tax to the imported confectionary products and 5% tax to the like domestic product; application by Uzbekistan of different rates of excise duties to motor vehicles originating from Uzbekistan, Russia and other countries, including Ukraine; hindering by Belarus the Ukrainian companies to protect their interests during an anti-dumping investigation; application by Kazakhstan of unjustifiably high rates of safeguard duties to confectionary products originating from, among others, Ukraine.
State authorities involved
The following comp°tent state authorities are involved in anti-discriminatory proceedings:
(i) The Parliament of Ukraine is authorized to impose anti-discriminatory measures, including (a) partial or full embargo on trade; (b) deprivation of the
most favored nation (MFN) treatment or preferential special treatment;
(ii) The Cabinet of Ministers of Ukraine is authorized to impose the licensing regime as an antidiscriminatory measure;
(iii) The Ministry of Economic Development and Trade of Ukraine (the Ministry) is responsible for conducting anti-discriminatory investigations, participating in negotiations with foreign countries aimed at settling any dispute as well as drafting the relevant agreements to be entered into with foreign countries so as to eliminate discrimination;
(iv) The Interdepartmental Committee on International Trade (the Committee) is responsible for taking a decision on the existence/absence of any discriminatory actions as well as taking the necessary anti-discriminatory measures “within the competence as set forth by laws”. Notably, at the present time there are no laws setting fourth such competence. Hence, it is unclear what exact anti-discriminatory measures the Committee is authorized to impose;
(v) The Ministry of Foreign Affairs of Ukraine (the Ministry of Foreign Affairs) is responsible for conductinp negotiations with foreign countries along with the Ministry to solve the dispute.
Stages of anti-discriminatory investigation
The anti-discriminatory investigations go through the following stages:
(i) The submission of an application in which a Ukrainian legal entity would point to the existence of discriminatory and/or unfriendly actions imposed by the relevant foreign country;
(ii) During the subsequent 60 days, the Ministry shall conduct an anti-discriminatory investigation, after which it shall submit its report to the Committee;
(iii) The Committee shall adopt a decision on the existence/absence of any discriminatory or unfriendly actions on the part of the relevant foreign countries;
(iv) Based on the Committee’s decision, the Ministry and the Ministry of Foreign Affairs shall approach state authorities of the relevant foreign countries with a proposal to settle the dispute on mutually beneficial conditions;
(v) In case the proposal to settle is warmly received, the Ministry and the Ministry of Foreign Affairs will conduct negotiations and enter into the relevant international agree.nents/treaties. If a mutually agreed settlement cannot be reached, anti-discriminatory measures may be applied pursuant to the relevant decision of the respective authorities (please see above).
Anti-discriminatory mearsures
The Act and the Resolution provide for the following list of anti-discriminatory measures that can be applied (a) a complete ban (complete embargo) on trade; (b) partial ban (partial embargo) on trade; (c) deprivation of MFN treatment or preferential special treatment; (d) application of special import duties; (e) application of licensing and/or quantitative restrictions on foreign economic transactions; (f) application of quotas, etc.
It is worth emphasizing that at the present time Ukrainian legislation does not provide the identity of the state body which would be empowered to apply special import duties, quantitative restrictions on foreign economic transactions, quotas and other anti-discriminatory measures. Thus, the imposition of any such measures can be legally challenged in court as violating Article 19 of the Constitution of Ukraine stipulating that government and municipal agencies as well as their officials shall act o: ily on the basis of, in the conduct of their powers and in a manner set out by the Constitution of Ukraine and the laws of Ukraine.
Notably, the vast majority of anti-discriminatory investigations in Ukraine were terminated without the adoption of any measures since the countries managed to settle all disputes through negotiations. An almost “unique” example of anti-discriminatory measures that were actually adopted is the investigation against Uzbekistan. The respective resolution provided for the application of quotas on imports of the motor vehicles originating from Uzbekistan into Ukraine2. However, the said Resolution was in effect for a very limited period (i.e. about 2 months) since Uzbekistan quickly terminated the discrimination3.
Why anti-discriminatory measures?
In our view, anti-discriminatory measures may be quite an efficient “tool” aimed at counteracting discriminatory or unfriendly actions on foreign markets (non-WTO members only) due to the following reasons (as compared to other possible remedies):
— Following an anti-discriminatory investigation, quite a wide range of different measures (even very restrictive) may be adopted. Notably, measures may be applied not only on by products similar to the ones discriminated against the foreign country, but also on any other products imported into Ukraine in the highest volumes (and it is within the ambit of the Ukrainian bodies to decide which measures can be applied);
— The Ministry, the Committee and the Cabinet of Ministry of Ukraine have already gained positive experience in conducting anti-discriminatory investigations and the adoption of anti-discriminatory measures;
— In practice, anti-discriminatory measures are more efficient than dispute settlement mechanisms set for by the relevant FTAs. Moreover, it takes about 4 months between the submission of the application for the initiation of the anti-discriminatory investigation and the imposition of the respective measures or voluntarily abolition of the discrimination by the foreign country.
Unfortunately, Ukrainian companies often undervalue the importance of anti-discriminatory measures as a useful “tool” capable of protecting their interests on foreign markets (non-WTO members only). However, business must remember that all is fair in love and war…
[1] Of 22 November 1999.
Resolufion ot the Cabinet of Ministers ot Ukraine On Application of Licensing Regime and Establishment of Quotas for Imports of Motor Cars Originating from Uzbekistan, No. 1073.
Resolution of the Cabinet of Ministers of Ukraine On Recognition the Resolution of the Cabinet of Ministers of Ukraine of 12 October 2011 No. 1073 as Nullified of 22 February 2012 No. 147.
Авторы: Nataliya Y. MYKOLSKA, Anzhela M. MAKHINOVA
Источник: The Ukrainian Journal of Business Law. – 2012. – № 10. – Р. 27 – 28.