Trade barriers
Government authoritiesWhat government office handles complaints from domestic exporters against foreign trade barriers at the WTO or under other agreements?
Normally, the Ministry of Economy is responsible for handling complaints against trade barriers and relevant World Trade Organization (WTO) issues. In 2014, the Cabinet of Ministers through Regulation No. 550 appointed the Deputy Minister of Economy – Trade Representative of Ukraine. The Trade Representative, among other things, deals with issues of ensuring the promotion of Ukrainian economic interests in European and global markets and the coordination of trade missions abroad, and provides for analysis of status and trends of international trade, proposals concerning priorities of Ukraine’s trade policy development, the impact of trade remedies on trade development and proposals for improving the efficiency of their usage to achieve economic growth. The Trade Representative’s key objective with respect to the WTO and foreign trade barriers is that they are in charge of monitoring WTO member compliance with their WTO commitments to protect Ukrainian rights and interests and its enterprises. To this end, the Trade Representative provides for such actions as, inter alia, identification of the facts or the threat of application by foreign countries, customs unions or economic groups, anti-dumping, countervailing and safeguard measures with respect to products originating in Ukraine, and the conducting of investigations to establish the facts of discriminatory or hostile actions by other states, customs unions or economic groups with respect to the legitimate rights and interests of the foreign economic activity of Ukraine.
The Trade Representative also performs the function of Ukrainian representative to the WTO and the Black Sea Trade and Development Bank, and reports directly to the Minister of Economy. The Trade Representative ensures the predictability and transparency of Ukraine’s trade policy.
Within the Ministry’s structure, there is an independent structural unit – Department for Foreign Economic Activity and Trade Protection, which has the following structure divisions:
- internal market protection division;
- import research division;
- applicants division;
- division of research of a condition of branches of domestic production.
Its objectives include:
- measures to protect the interests of Ukrainian businesses in anti-dumping, countervailing and safeguard investigations carried out by foreign states with respect to Ukrainian products;
- protecting the rights and interests of Ukraine in the trade and economic sphere, using WTO instruments and Ukrainian international agreements; and
- representing Ukraine at the WTO Dispute Settlement Body.
In 2017, by way of a resolution, the Cabinet of Ministers established the International Trade Council as an interim consultative and advisory body of the Cabinet of Ministers. It is composed of the heads of the highest executive Institutions, including the Deputy Minister of Economy – Trade Representative of Ukraine. Among the main objectives of the Council are the:
- formation and implementation of the basic principles and position of the Ukrainian side on issues arising within the WTO membership framework;
- solving of problematic issues of Ukraine’s cooperation within the WTO, and Ukrainian participation in activities within the WTO framework; and
- a determination of ways and mechanisms of dispute settlement related to the protection of the rights and interests of Ukraine in the trade and economic sphere, including within the WTO framework.
In addition, the Ministry of Justice has the authority to represent Ukraine in foreign and international courts and jurisdictional authorities. Consequently, if the WTO dispute enters the stage of panel establishment and composition, the Ministry of Justice cooperates with the Ministry of Economy.
Complaint filing procedureWhat is the procedure for filing a complaint against a foreign trade barrier?
The company concerned addresses the respective department within the Ministry (through the particular department and Trade Representative) with a letter outlining the scope of the trade barrier. The general term of response to the complaint letter of the concerned company is one month. Upon examination of the complaint, the Ministry may either initiate a meeting with the company to discuss the barrier in question or refuse to initiate the proceedings. If the complaint is well grounded, the Trade Representative may initiate the establishment of working groups to prepare draft legal acts on this issue or to convene meetings regarding the particular trade and foreign economic issues concerned.
Moreover, in early June 2016, the Ukrainian government adopted the procedure of trade protection and economic rights and interest of Ukraine within the WTO framework. The procedure is approved by Cabinet of Ministers Decree No. 346, of 1 June 2016. If Ukrainian interested authorities or diplomatic missions reveal any measures taken by other economies being inconsistent with WTO commitments, they must respectively inform the Ministry for Development of Economy, Trade and Agriculture of these measures within five days. Along the same lines, the interested organisations (companies) must submit the relevant communication to the Ministry, providing formal requisites of the companies as well as sufficient evidence and materials supporting the alleged violation. Upon considering the communications, the Ministry may either find this allegation substantiated and decide on the establishment of an interdepartmental working group or find the allegation groundless.
The interdepartmental working group is responsible for:
- cooperation between interested authorities and interested organisations;
- it elaborates on, and submits to, the Ministry possible mechanisms and instruments of settlement concerning the trade-distortive measures faced by interested Ukrainian authorities and organisations;
- it participates in the drafting and preparation of documents and materials pursuant to the procedures prescribed by the Dispute Settlement Understanding of the WTO; and
- it submits to the Ministry the recommendations on engagement of legal and economic advisers and independent experts in the consultations or dispute settlement, or both.
The interdepartmental working group is jointly headed by the Ministry for Development of Economy, Trade and Agriculture, and the Trade Representative.
Grounds for investigationWhat will the authority consider when deciding whether to begin an investigation?
Formally, the Ministry of Economy first considers whether the application contains all sufficient grounds for initiating the WTO case. Furthermore, the authority normally considers trade policy and relations with the member imposing the trade barrier, the volume of production, the export or import of the subject merchandise, and the injury that is caused by the trade barrier. A particular role in this process is performed by the Trade Representative of Ukraine, who deals with issues of analysis, proposals and recommendations concerning illegitimate foreign trade barriers. In accordance with article 4.19 of Regulation No. 550 of the Cabinet of Ministers of 16 October 2014 (with amendments of 6 November 2019), it may initiate investigations concerning such measures.
Measures against foreign trade barriersWhat measures outside the WTO may the authority unilaterally take against a foreign trade barrier? Are any such measures currently in force?
Ordinary procedure against non-WTO membersUkraine may find the facts of discriminatory or hostile actions of non-WTO members. The procedure for finding such facts (or their absence) is set forth in the ‘Law on Foreign Economic Activity and in the Order of Conducting Investigations Aimed at Establishing Facts of Discriminatory and/or Hostile Actions of Other States, Customs Unions or Economic Groups Concerning Legitimate Rights and Interests of Business Entities of Ukraine’, adopted by Decree No. 2120 of the Cabinet of Ministers of Ukraine, 22 November 1999. Such an investigation is conducted by the Ministry of Economy (it may be initiated by the Trade Representative) upon application of a business entity or executive agency of Ukraine, which may be submitted to the Ministry, to the office of the Trade Representative, or through trade missions and diplomatic and consular institutions. Upon receipt of a duly executed application followed by evidence and documents and in accordance with Order No. 2120, the Ministry conducts an investigation lasting 60 days. The Ministry submits its report on the results of the investigation to the Interdepartmental Commission on International Trade for making a decision on the presence or absence of facts of discriminatory actions. The decision of the Commission is published in the Official Gazette. The applicant may withdraw the application. In this case, the application is deemed as not submitted.
According to the Law on Foreign Economic Activity, Ukraine may introduce such measures in the form of a partial or full trade embargo, cancellation of most-favoured-nation status and special preferential regime, imposition of special duties and quotas, foreign economic operations licensing.
‘Fast-track’ procedure against a state recognised as an aggressor or occupantSince December 2015, the Cabinet of Ministers is entitled to take unilateral countermeasures against a state that is recognised as an aggressor or occupant (articles 9 and 29 of the Law on Foreign Economic Activity). Herewith, such measures can be taken pursuant to the decision of the Cabinet of Ministers without completing the previous investigation and consultation stages.
Private-sector supportWhat support does the government expect from the private sector to bring a WTO case?
Typically, to bring a WTO case the companies concerned should be prepared to handle lawyers’ fees, translations and supporting documents containing, inter alia, all necessary information about the facts and statistics concerning the alleged violation, the foreign state competent authority allegedly violating the rules and procedures, etc. Having prepared the position paper, companies address the Ministry and the Trade Representative with the issue. Trade statistics are compiled by the State Statistics Committee. More rarely, the Ministry engages other state enterprises, including expert institutions or economic research institutes. The fees for such state enterprises’ services are expected to be borne by the company concerned. As transparency in relations and permanent dialogue between business and the government act as a cornerstone in the protection of the private sector’s interests, in pursuing such goals in Ukraine special trade councils help to establish such communication
Notable non-tariff barriersWhat notable trade barriers other than retaliatory measures does your country impose on imports?
Every year, the government compiles a list of products subject to an import or export licensing and quotas regime. The 2020 list of such products can be found in Regulation No. 1329 of the Cabinet of Ministers dated 28 December 2020.
In practice, one of the most notable barriers for imports may be regarded as the practical determination of the customs valuation of goods. Although the WTO Customs Valuation Agreement has direct effect in Ukraine and the provisions of the Customs Code incorporate the procedures for customs valuation, importers face the problem of declaring higher prices for goods than their transaction value.