International Trade News - December 2011 - 15 January 2012

ЗАГРУЗИТЬ ТЕКСТ НА РУССКОМ/ЗАВАНТАЖИТИ ТЕКСТ УКРАЇНСЬКОЮ

I. HOT ISSUE

New Customs Code of Ukraine was vetoed by President of Ukraine

The President of Ukraine vetoed the Law of Ukraine "Customs Code of Ukraine" with suggestions in respect of limitations of the customs brokers' activity, requirements for guarantees of customs payments, transparency of the customs value definition procedure etc. Moreover, pursuant to the President’s proposals the new Customs Code of Ukraine shall enter into force on January 1, 2013.

II. REGIONAL TRADE LIBERALIZATION

Ukraine ratified FTA with EFTA States

On December 7, 2011 the Parliament of Ukraine adopted the Law of Ukraine “On Ratification of the Agreement on Free Trade between Ukraine and EFTA States, the Agreement on Agriculture between Ukraine and Norway, the Agreement on Agriculture between Ukraine and Iceland, the Agreement on Agriculture between Ukraine and Switzerland” No. 4091-VI concluded in June 2010. Just to remind: the EFTA-Ukraine FTA has a comprehensive coverage, including trade in goods, trade in services, investment, trade facilitation, competition, protection of intellectual property rights and government procurement as well as stipulates dispute settlement mechanisms.

First round of FTA negotiations between Ukraine and Turkey¹

On December 6-7, 2011 Ukraine and Turkey held the first round of negotiations on conclusion of the free trade agreement. It was agreed that the FTA shall cover not only trade in goods, but also trade in services, competition, dispute settlement mechanism, intellectual property protection etc. In addition, it was preliminary arranged to hold the next round of negotiations in February-March 2012.

Cooperation agreement ratified with Cyprus

On December 9, 2011 the Parliament of Ukraine adopted the Law of Ukraine "On Ratification of the Agreement between the Government of Ukraine and the Government of the Republic of Cyprus on Economic, Scientific, Technical and Industrial Cooperation" No. 4097-VI. The said Agreement is expected to facilitate development of bilateral cooperation in areas of mutual interest of the states mentioned, in particular, through the sharing of technological and scientific information, creation of industrial complexes, modernization of industrial enterprises and other variables of interstate cooperation.

FTA with EU²

On December 19, 2011 the 15th EU – Ukraine Summit took place. Even though the Agreement of Association and its integral part – free trade agreement was not signed during the Summit, completion of negotiations in respect of the said agreement was officially announced. Besides, on December 22, 2011 the protocol on completion of the technical verification of the draft Association Agreement between the EU and Ukraine in the part relating to the Free Trade Area was signed in Brussels.

III. UKRAINE & WTO

Modification by Ukraine of its WTO market access commitments³

The Ukrainian Agrarian Confederation submitted its proposals for modification of Ukraine’s WTO market access commitments. Particularly, the Confederation requested to increase import duties "at least" twice mainly for the following products: non-meat parts of pig carcasses, by-products and raw pork fat. Besides, import duties for motor cars and sugar are to be modified⁴. Just to remind: on November 9, 2011 the Government of Ukraine reserved its rights under Article XXVIII:5 of the GATT 1994 to modify its schedule of market access commitments for the duration of the next three-year period beginning on January 1, 2012.

New WTO members: Russia, Montenegro and Samoa

On December 16, 2011 Russia cleared the final hurdle to become a WTO member. WTO Ministers adopted Russia’s WTO terms of entry at the 8th Ministerial Conference in Geneva. Russia will have to ratify the deal within the next 220 days and would become a fully-fledged WTO member 30 days after it notifies the ratification to the WTO⁵. Besides, on December 17, 2011 the WTO Ministers adopted Samoa’s and Montenegro’s WTO terms of entry at the 8th Ministerial Conference in Geneva. Samoa will have until June 15, 2012 to ratify its accession package and Montenegro until March 31, 2012. Both countries will become fully-fledged WTO members 30 days after they notify ratification of their respective accession packages to the WTO⁶.

8th Ministerial Conference in WTO⁷

During 15 to 17 December 2011 the Eighth Ministerial Conference was held in Geneva ended with decisions on: (a) extending the moratorium on “non-violation” complaints in intellectual property; (b) extending moratorium on import duties on electronic transmissions (electronic commerce); (c) special provisions for small economies; (d) extending the deadline for least developed countries to protect intellectual property; (e) speeding up least developed countries’ membership negotiations; (f) services waiver for least developed countries; (g) fourth appraisal of the Trade Policy Review Mechanism.

US appeals clove cigarettes dispute panel report8⁸

On January 5, 2012, the United States notified the Dispute Settlement Body of its decision to appeal the panel report in dispute case DS406, United States — Measures Affecting the Production and Sale of Clove Cigarettes initiated by Indonesia.

Just to remind⁹: the measure introduced by the Family Smoking Prevention and Tobacco Control Act bans the production and sale of clove cigarettes, as well as most other flavoured cigarettes, in the United States. However, the measure excludes menthol-flavoured cigarettes from the ban. Indonesia is the world's main producer of clove cigarettes, and the vast majority of clove cigarettes consumed in the United States prior to the ban were imported from Indonesia. The panel in its report made the following key finding: the ban is inconsistent with the national treatment obligation in Article 2.1 of the TBT Agreement because it accords clove cigarettes less favourable treatment than that accorded to menthol-flavoured cigarettes.

IV. PERSONAL DATA PROTECTION

Introduction of penalties for violation of personal data protection legislation postponed

On January 13, 2012 the Parliament of Ukraine adopted the Law of Ukraine “On Amending Final Provisions of the Law of Ukraine “On Amending Certain Legislative Acts of Ukraine Regarding Violations of Legislation on the Personal Data Protection” related to Postponing Entering into Force” (the Draft Law No. 9624 of December 20, 2011). Pursuant to the Law introduction of penalties for violation of personal data protection legislation shall be postponed until July 1, 2012. Just to remind: starting from January 1, 2012 the Law of Ukraine “On Amending Certain Legislative Acts of Ukraine Regarding Violations of Legislation on the Personal Data Protection” No. 3454-VI should have entered into force. The said Law sets forth liability administrative or criminal for the violation of legislation on personal data protection and stipulates the following penalties: (a) fine from 100 to 1000 nontaxable minimum individual incomes (approximately 150-1500 EUR), (b) corrective work up to 2 years, (c) arrest up to 6 months, (d) confinement up to 5 years, (e) imprisonment up to 5 years.

Clarifications of personal data protection legislation

On December 21, 2011 the Ministry of Justice of Ukraine issued Clarifications “Some Issues related to Practical Enforcement of the Law of Ukraine “On Personal Data Protection”¹⁰ clarifying such issues as terms “personal data”, “personal data bases”, “controller”, “processor”, peculiarities of data bases registration, of obtaining data subject consent for processing his/her personal data, notification requirements etc.

Access to State register of personal data bases

Pursuant to the Resolution of the Cabinet of Ministers of Ukraine “On Approval of Instructions on the State Register of Personal Data Bases and the Order of its Maintenance” of May 25, 2011 No. 616 starting from January 1, 2012 state authorities, different legal entities and individuals are allowed to access the State register of personal data bases in part of the following information: data base name; information on data base controller; purposes of personal data processing; registration number of the data base in the said register.

V. CUSTOMS RELATED ISSUES

Customs Tariff of Ukraine to be amended shortly

The Law of Ukraine “On Amending the Customs Tariff of Ukraine Approved by the Law of Ukraine “On Customs Tariff of Ukraine”, other Laws of Ukraine in respect of Description and Import Duty Rates for Certain Products” of December 22, 2011 No. 4234-VI enters into force on January 22, 2011. The said Law detalizes description and codes for clothes, introduces classification of air conditioners, amends customs tariffs pursuant to the respective Ukraine’s WTO market access commitments etc.

VI. PRODUCT SAFETY LEGISLATION

Stricter liability for poor quality products

On December 8, 2011 the Draft Law ''On Amending Certain Legislative Acts of Ukraine" was published on the official web-site of the Ministry of Economic Development and Trade of Ukraine¹¹ aimed at strengthening liability of distribution networks for quality of products sold therein. For these purposes the Draft Law stipulate a penalty equal to 500% of the supplied products, but not less than 100 nontaxable minimum individual incomes (approximately 215 USD) for sale of products that are forbidden for production and sale, including falsified products.

GMO labeling

The Ministry of Economic Development and Trade of Ukraine published on its official website the Draft Resolution of the Cabinet of Ministers of Ukraine “On Approval of Order for Labeling Food Products with GMO Content”¹². According to the said Draft Resolution food products containing GMO, food products produced from raw materials containing GMO (irrespective of the GMO amount therein) as well as food products without GMO should be labeled with marks “with GMO” and “without GMO” respectively. Besides, the Draft Resolution stipulates detailed rules, how marks “with GMO” or “without GMO” should be placed on the food products.

Mandatory registration of producers’ declarations of conformity may be canceled

The Ministry of Economic Development and Trade of Ukraine published on its official website the Draft Law “On Amending Some Laws of Ukraine in respect of Canceling Registration of Producer’s Declaration of Conformity” ¹³. Even though the said Draft Law cancels mandatory registration of producers’ declarations of conformity, it sets forth additional requirements to use of such declarations.

Audits to be conducted by market surveillance and product control authorities

The Ministry of Economic Development and Trade of Ukraine published on its official website the Draft Resolution of the Cabinet of Ministers of Ukraine “On Approval of Order for Elaborating and Revising Sectoral Audit Plans to be Conducted by State Market Surveillance, Monitoring and Reporting on Their Performance”¹⁴. The Draft Resolution stipulates the detailed rules for elaborating the sectoral audit plans. Particularly, the sectoral audit plans should be elaborated taking into account quantity of end consumers’ claims on product safety, of accidents and damages caused to human health by poor quality products, information received from other state authorities etc. Besides, pursuant to the Draft Resolution draft sectoral audit plans should be published on the official website of the relevant state market surveillance authorities in advance so that the parties concerned are in position to voice their objections and proposals.

Risk degrees of non-food products

The Ministry of Economic Development and Trade of Ukraine published on its official website the Draft Resolution of the Cabinet of Ministers of Ukraine “On Approval of Risk Degrees for Non-Food Products and Criteria, based on which Non-Foods Products are Attributed to Particular Risk Degrees”¹⁵. The Draft Resolution specifies the list of criteria to be used for attributing non-food products to the particular risk degree, to name but a few: usage of the products by certain groups of end consumers (e.g. children of different age, pregnant women etc.); usage in products of chemical or biological materials that may negatively influence human health or environment; occurrence in products of physical, mechanical or radiation factors threatening human health and life. Besides, the Draft Resolution defines:

• low risk degree non-food products i.e. non-food products that are safe and do not threaten social interests under ordinary conditions of usage thereof subject to due installation and maintenance thereof;

• high risk degree non-food products i.e. non-food products that are safe, but may threaten social interests under ordinary conditions of usage thereof subject to due installation and maintenance thereof.

Restrictive (corrective) measures to be employed to unsafe non-food products

The Ministry of Economic Development and Trade of Ukraine published on its official website the Draft Resolution of the Cabinet of Ministers of Ukraine “On Approval of Methodology to Employ Restrictive (Corrective) Measures”¹⁶. The Draft Resolution sets forth criteria to estimate risks, conditions and circumstances, subject to which the state market surveillance authorities shall apply restrictive (corrective) measures (i.e. (a) restriction of products sale on the market; (b) prohibition to sell products on the market; (c) withdrawal of products from circulation; (d) product recall) if the products are not in line with applicable requirements and pose a threat.

VII. MEDICINE & PHARMACEUTICALS

Green light to import of unregistered medicines used for pharmaceutical development

On December 10, 2011 the Law of Ukraine «On Amending Article 17 of the Law of Ukraine "On Medicines" (with respect to Ensuring Pharmaceutical Development of Medicines» No. 4056-VI of November 17, 2011 entered into force. Just to remind: the Law allows import of unregistered medicines destined for pharmaceutical development. Therefore, the companies that have received a license for production of medicines as well as research institutions involved into medicine development are allowed to import limited quantities of the unregistered medicines for the purposes of pharmaceutical development.

Additional requirements to advertising of medicines, food products for special dietary consumption, functional nutrition products and dietary supplements

On December 20, 2011 the Parliament of Ukraine adopted the Law of Ukraine “On Amending Some Laws of Ukraine in the Health Care Sphere related to Strengthening Control under Circulation of Medicines, Food Products for Special Dietary Consumption, Functional Nutrition Products and Dietary Supplements” No. 4196-VI with the effect from January 13, 2012. The said Law, among others, sets forth additional requirements to advertising of medicines, food products for special dietary consumption, functional nutrition products and dietary supplements, to name but a few: (a) it is forbidden to advertise medicines sold with prescription or inserted into the register of medicines forbidden for advertising; (b) it is forbidden to indicate in the adverting of food products for special dietary consumption, functional nutrition products and dietary supplements that they have any curative qualities; (c) the Law sets forth both the information allowed to be placed in advertising of the respective products and the information forbidden for use in advertising; (d) disclaimers to be used in advertising etc.

New licensing conditions of medicines production, wholesale and retail sale entered into force

On December 29, 2011 the Order of the Ministry of Healthcare of Ukraine “On Approval of Licensing Conditions of Conducting Commercial Activity related to Production of Medicines, Wholesale, Retail Sale of Medicines” of October 31, 2011 No. 723 as well as the Order of the Ministry of Healthcare of Ukraine “On Approval of the Order of Controlling Compliance with Licensing Conditions of Conducting Commercial Activity related to Production of Medicines, Wholesale, Retail Sale of Medicines” of October 31, 2011 No. 724 entered into force.

State control under imported into Ukraine medicine quality

The Ministry of Healthcare of Ukraine published on its official website the Draft Resolution of the Cabinet of Ministers of Ukraine “On Certain Issues of Medicines Circulation” 17 for public consideration. The Draft Resolution stipulates detailed order for conducting state control under imported into Ukraine medicine quality.

Import of unregistered medical products into Ukraine

The Ministry of Healthcare of Ukraine published on its official website its Draft Order “On Approval of Order of Import into the Customs Territory of Ukraine of Medical Products” ¹⁸ for public consideration. Pursuant to the Draft Order unregistered medical products are allowed for import into Ukraine for the following purposes: (a) state registration (reregistration) of such medical products; (b) exhibitions at different events, conferences etc.; (c) clinical trials; (d) participation in technical assistance programs, international cooperation programs; (e) in case of acts of God, crash, epidemic, ecological or technological catastrophe (based on the relevant decision of the Cabinet of Ministers of Ukraine); (f) provision of humanitarian assistance. Besides, the Draft Order stipulates requirements to be met for importing unregistered medical products.

VIII. AGRICULTURE

State support of agriculture

On January 13, 2012 the Law of Ukraine “On Amending Article 13 of the Law of Ukraine “On State Support of Agriculture of Ukraine” of December 22, 2011 No. 4216-VI entered into force. According to the Law the state support of agriculture of Ukraine will be made in the following forms: (a) subsidization of part of interests paid for credits obtained by agricultural enterprises and (b) compensation of leasing payments for purchase of agricultural equipment.

Agricultural products insurance with state support

On December 22, 2011 the Parliament of Ukraine adopted the Law of Ukraine “On Peculiarities of Agricultural Products Insurance with State Support” (the Draft Law No. 5063 of September 6, 2009). The said Law stipulates state support of agricultural enterprises by paying insurance premiums for insurance of yield, farm animal, birds etc. against the lost or damage caused by human activities or natural disasters. The Law is pending signature by the President of Ukraine.

IX. OTHERS

UAH use in settlements with non-residents

On January 12, 2012 the Law of Ukraine “On Introduction of Amendments to Article 7 of the Decree of the Cabinet of Ministers of Ukraine “On System of Currency Regulation and Currency Control” of December 20, 2011 No. 4205-VІ entered into force. The Law allows using Ukrainian hryvna for settlement between residents and non-residents without obtaining individual licenses of the National Bank of Ukraine.

Offshore operations¹⁹

The Cabinet of Ministers of Ukraine proposed to elaborate a Draft Law extending the list of offshore zones from the current 33 to 68 and introducing a 12% tax on offshore operations.

For more information please, contact Tatyana Slipachuk or Nataliya Mykolska.

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¹http://me.kmu.gov.ua/control/uk/publish/article?art_id=175460&cat_id=38461

²http://wto.in.ua/?lang=en&get=3&id=2346

³http://wto.in.ua/index.php?start=1&get=3&id=2332

⁴http://wto.in.ua/index.php?lang=ua&&page=1&get=3&id=2359

⁵http://www.wto.org/english/news_e/news11_e/acc_rus_16dec11_e.htm

⁶http://www.wto.org/english/news_e/news11_e/acc_wsm_17dec11_e.htm

⁷http://www.wto.org/english/thewto_e/minist_e/min11_e/min11_e.htm

⁸http://www.wto.org/english/news_e/news12_e/dsapl_05jan12_e.htm

⁹http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds406_e.htm

¹⁰http://zakon1.rada.gov.ua/cgi-bin/laws/main.cgi?nreg=n0076323-11

¹¹http://me.kmu.gov.ua/file/link/175468/file/Proekt0812.doc

¹²http://www.me.gov.ua/file/link/176212/file/Pr34_2.doc

¹³http://www.me.gov.ua/file/link/176169/file/Pr34_2212.doc

¹⁴http://www.me.gov.ua/file/link/175927/file/pkmu.doc

¹⁵5http://www.me.gov.ua/file/link/175919/file/pkmu.doc

¹⁶http://www.me.gov.ua/file/link/175949/file/Proekt3504.doc

¹⁷http://www.moz.gov.ua/ua/portal/Pro_20111223_0.html

¹⁸http://moz.gov.ua/ua/portal/dn_20111226_ppp.html#2

¹⁹http://korrespondent.net/business/economics/1286352-kabmin-oblozhil-ofshory-12-nym-nalogom