WT/TPR/M/334/Add.1 14 June 2016

144 Pages·2016·0.81 MB·English

WT/TPR/M/334/Add.1

14 June 2016
(16-3251) Page: 1/144
Trade Policy Review Body Original: English/Spanish
19 and 21 April 2016 anglais/espagnol
inglés/español

TRADE POLICY REVIEW
UKRAINE
MINUTES OF THE MEETING
Addendum
Chairperson: Ms. Irene Young (Hong Kong, China)
This document contains the advance written questions and additional questions by WTO
Members, and replies provided by Ukraine.1

Organe d'examen des politiques commerciales
19 et 21 avril 2016
EXAMEN DES POLITIQUES COMMERCIALES
UKRAINE
COMPTE RENDU DE LA RÉUNION
Addendum
Présidente: Mme. Irene Young (Hong Kong, Chine)
Le présent document contient les questions écrites communiquées à l'avance par les
Membres de l'OMC, leurs questions additionnelles, et les réponses fournies par Ukraine.1

Órgano de Examen de las Políticas Comerciales
19 y 21 de abril de 2016
EXAMEN DE LAS POLÍTICAS COMERCIALES
UCRANIA
ACTA DE LA REUNIÓN
Addendum
Presidenta: Sra. Irene Young (Hong Kong, China)
En el presente documento figuran las preguntas presentadas anticipadamente por escrito y
las preguntas adicionales de los Miembros de la OMC, así como las respuestas facilitadas por
Ucrania.1

1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.
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REPLIES TO ADVANCE WRITTEN QUESTIONS SUBMITTED BEFORE THE DEADLINE
ARGENTINA
Informe de la Secretaría (WT/TPR/S/334)
1. Entorno económico
El párrafo 1.21 refiere a la crisis económica y su impacto en el empleo y en los ingresos reales.
Asimismo se menciona que, según el FMI, comienzan a observarse signos de estabilización.
- ¿Podría Ucrania indicar si se han adoptado medidas específicas destinadas a alentar el
empleo?

Answer: Ukrainian authorities have taken all possible steps to raise the employment level after
the economic crisis in Ukraine:
 On January 1, 2013 the new version of the Law "On Employment" came into force. The Law
concerned introduces new tools to stimulate employment and improve population's
competitiveness.
 In March 2016 the Government approved the Poverty Reduction Strategy (Resolution of the
Cabinet of Ministers No. 161-p as of March 16, 2016), which defines mechanisms for poverty
reduction for the period until 2020. This documents provides for inter alia the increase of
employment policy efficiency (by restructuring public employment assistance system;
subsidizing job creation in enterprises that hire unemployed persons; creating national
vacancies register with free on-line access and updating in real time; expanding types and
scope of public works etc.)
 In July 2015 Ukraine adopted the Resolution of the Cabinet of Ministers of Ukraine as of
July 8, 2015 "On Approval of the Guidelines for solving the employment problems of
internally displaced persons in 2015-2016 years". This document provides for the provision
of employment opportunities for internally displaced persons.
 Ukraine also adopted the Resolution of the Cabinet of Ministers No. 473 as of July 8, 2015
"On Amendments to the Procedure for the Registration, Re-registration and Holding Records
of Unemployed Persons Looking for a Job", the Resolution of the Cabinet of Ministers
No. 696 as of September 8, 2015 "On Approving Measures to Promote Employment, Ensure
Return of Funds to Finance Such Measures in the Case of Job Security Violation for Internally
Displaced Persons".
 The Ministry of Social Policy developed a draft Law "On Amendments to Some Legislative
Acts of Ukraine on Government Control of Employment and Social Insurance in the Case of
Unemployment". The draft Law provides for the modernization of state employment agency
and establishment of the National Agency of Employment on its basis.
 On April 7, 2016, the Ministry of Social Policy of Ukraine, a range of all-Ukrainian employers'
organizations and the International Labour Organization have signed a Memorandum of
Mutual Understanding to implement the ILO Program of Worthy Labour for Ukraine for
2016-2019. This document is based on three main priorities: promoting employment and
sustainable business for stability and growth, promoting effective social dialogue,
improvement of social protection and working conditions.

2. Régimen de comercio e inversión
En el párrafo 2.52 se menciona que los inversores extranjeros pueden establecer una oficina de
representación para gestionar sus actividades.
- ¿Podría Ucrania detallar cuál es el procedimiento que debe seguir una empresa extranjera
para establecerse en el país?

Answer: A representative office in Ukraine should be opened and registered in accordance with
the Instruction on Registration of Representatives of Foreign Business Subjects in Ukraine, as
approved by the Order of the Ukrainian Ministry of Foreign Economic Relationships and Trade as of
January 18, 1996.
A representative office of a foreign business entity is not a legal entity and it does not carry out
any independent economic activity. In all cases it acts in the name and on behalf of the non-
resident and only in the latter's interests. Registration of representative offices is performed by the
national agency on economic policy (Ministry of Economic Development and Trade).
In order to register a representative office of a foreign business entity that has no intention to
conduct business in Ukraine one should submit particular documents (such as a registration
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application in any form; an excerpt from the trade (banking) register of the country, where the
foreign business entity has a formally registered office; a certificate from the bank, where the
applicant has an account; and an authorization for representation functions in the form pursuant to
the legislation of the country where such foreign business entity is officially registered).
All the documents should be notarized at the place of issue, properly legalized, translated into the
Ukrainian language and verified with the translator's seal. The state fee for registration of
representative offices is established in the amount of USD 2,500.
The certificate of registration is issued no later than within 60 working days after payment of the
state fee. Starting from the date of registration, the representative office is deemed open. The
Ministry of Economic Development and Trade maintains a registry of the registered representative
offices.
Within the 10-day period following the registration with the Ministry of Economic Development and
Trade, the registration certificate, a power of attorney to act as a representative, the regulation on
operation of the separate division and a completed registration form should be submitted to an
office of the Ministry of Statistics in order to be included in the Register. The certificate of Unified
State Register of Enterprises and Organizations of Ukraine is issued within a 5-day period.

En los párrafos 2.59 y 2.60 se menciona que Ucrania creó organismos destinados a atraer
inversión extranjera (entre ellos, se señala que el Ministerio de Desarrollo Económico y Comercio
estableció un grupo de trabajo encargado de formular iniciativas sobre los modos de atraer
inversión extranjera) y que estos esfuerzos se vieron reflejados en los indicadores internacionales.
- ¿Podría Ucrania especificar cuáles fueron las medidas que se tomaron para mejorar el clima
de inversión?

Answer: According to 2015 Investment Report of Ministry of Economic Development the following
achievement were accomplished:
 canceled 16 inefficient regulatory restrictions; harmonized system of land lease; set
deadlines for registering businesses for no more than two days; implemented issuance of
permits through the centers of administrative services;
 abolished licensing for 26 types of economic activity; identified an exhaustive list of
economic activities subject to licensing; established a unified procedure for licensing,
supervision and control in the field of licensing;
 approved the Action Plan for deregulation of economic activities and simplify the regulatory
framework that aims to eliminate excessive administrative regulation of economic activity,
creating favorable conditions for business;
 ensured adaptation of Ukrainian legislation to European ones concerning takeover bids and
adequate protection of minority shareholders (the Law of Ukraine "On Amendments to
Certain Legislative Acts of Ukraine regarding investor protection" of 07.04.2015
number 289-VIII);
 ensured validity and transparency of decisions on financing public investment projects,
efficient use of public funds and the impact of public investment projects (Law of Ukraine
"On Amendments to the Budget Code of Ukraine on public investment projects" of
07.04.2015 number 288-VIII);
 approved plans for the implementation of certain legislative acts of the EU in the field of
intellectual property (the Cabinet of Ministers of Ukraine of 04.03.2015 number 164);
 to allign Ukrainian technical regulation system with EU a unified legal and organizational
principles for the development, adoption and application of technical regulations and
conformity assessment procedures were adopted by the Law of Ukraine "On Technical
Regulations and Conformity Assessment" of 15.01.2015 number 124-VIII; established
conditions for the functioning of the national standardization body;
 approved the list of objects of state ownership of strategic importance to the economy and
national security (Cabinet of Ministers of Ukraine of 04.03.2015 number 83);
 approved Guidelines to ensure the transparency of the entities in the public sector (Order of
the Minister of 11.02.2015 number 116);
 eliminated monopoly SE "Ukrecoresursy" (Ukrainain Eco Resourses) (Cabinet of Ministers of
Ukraine of 18.03.2015 number 128);
 approved the basic standard deduction of share of profit used for dividend payments by
results of financial and economic activity in 2014 of economic companies whose authorized
capital is the corporate law of the State (Cabinet of Ministers of Ukraine of 22.04.2015
number 241);
 approved the list of state property that is planned to be privatized in 2015 (Cabinet of
Ministers of Ukraine of 12.05.2015 number 271);
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 ensured conditions for quality and independent auditing of the largest state-owned
companies (Cabinet of Ministers of Ukraine of 04.06.2015 number 390);
 ensured implementation of the pilot project in public procurement for implementation of
electronic procurement (Cabinet of Ministers of Ukraine "On the implementation of the pilot
project in the field of public procurement on the implementation of e-procurement" of 20.05.2015
number 501-p);
 launched a public access to information on procurement (bi.prozorro.org);
 launched help-desk (help.vdz.ua) to support customers and participants of public
procurement, which provides continuous, prompt and professional support on public
procurement.

3. Políticas y prácticas comerciales, por medidas
En el párrafo 3.67 se señala que el Consejo de Ministros aprobó una resolución destinada a aplicar
un plan de acción con el objeto de ayudar a las empresas ucranianas a ampliar los mercados para
sus productos en el extranjero.
- ¿Podría Ucrania detallar las medidas de apoyo a las exportaciones tomadas en el marco de
este plan acción y especificar cuáles son los sectores que reciben apoyo?

Answer: The Action Plan until 2015 approved by the Cabinet of Minister's Resolution No. 1206 of
16 November 2011 provides for basic export promotion and trade facilitation measures, such as
providing information on export-related matters, conducting analysis on export potential,
enhancing protection of domestic producers under the WTO Dispute Settlement Mechanism,
establishment of trade offices within diplomatic missions abroad, and improving of transport
infrastructure and others. The Action Plan is not sector specific.

En el párrafo 3.108 se describe el estado de situación de la legislación en materia de OGM y el
compromiso de armonizarla con la reglamentación comunitaria. En este sentido, se menciona que
Ucrania no tiene un registro de OGM pero que en el futuro deberán registrarse las variedades de
plantas y animales basadas en OMG, los OMG para productos alimenticios y los OMG para piensos.
- ¿Podría Ucrania comentar cuándo comenzará a funcionar el nuevo registro?

Answer: The new GMO regime is expected to be implemented as soon as laws adopting
EU directives come into force.
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AUSTRALIA
Report prepared by Ukraine
2 ECONOMIC ENVIRONMENT
2.3.2 Regional and preferential agreements
Page 27, paragraph 2.20

1) Australia notes that Ukraine has indicated it will gradually align its technical regulations and
standards with those of the EU.
Does the Ukraine have a timeframe in mind for the gradual alignment of regulations and standards
with the EU? Has the subcommittee on SPS matters already been established? If so, who does it
report to?

Answer: The timeframe for the gradual alignment of regulations and standards is XX as per Annex
III of the Agreement.
The SPS Subcommittee has been established, and it reports to Ukraine-EU Trade Committee.

3 TRADE POLICIES AND PRACTICES BY MEASURE
3.4.3 Sanitary and phytosanitary measures
Page 67, paragraph 3.99

2) The report states that an import risk analysis may be initiated by the competent authorities.
What would the import risk analysis assessment process involve?

Answer: Apart from information on pests and diseases concerning exporting country, import risk
analysis considers the history of compliance of traders, transport conditions and physical
examination of goods. The analysis entails hazard identification, hazard characterization, exposure
assessment and risk characterization.

4 TRADE POLICIES BY SECTOR
4.1 Agriculture
4.1.5 Level of support
Page 89, paragraph 4.20

3) Australia notes that Ukraine has not provided any agricultural domestic support notifications
for the years after 2011.
When will Ukraine be in a position to lodge these notifications?

Answer: Notifications on agricultural domestic support for 2012-2014 are currently under
development and will be submitted to the WTO Secretariat after their completion.

Report by the Secretariat
4 TRADE POLICIES BY SECTOR
4.3 Mining and Energy
Page 96, paragraph 4.48

4) To what extent do Ukraine's policy priorities and initiatives influence or support Ukraine's
mining equipment, technology and services (METS) sector?
Answer: The Energy Strategy up to 2030 is focused on creating favorable conditions so as to
attract foreign investors into the energy and mining sector, with the main focus on renewable
resources, coal, gas, oil and electricity. Updated draft of the Energy Strategy up to 2035 indicates
the need for tax reforms in the mining sector to ensure fair business environment and create an
attractive investment climate.
With respect to mining sector, the current situation in Donbass area, which is the centre of the
national coal industry, requires rebuilding the system of relations in the coal industry and its
operating principles virtually from scratch. The infrastructure destruction and the shutdown of coal
producers in several districts of Donetsk and Luhansk regions make Ukrainian coal industry face
the threat of losing its role in ensuring the country's energy security. Ensuring the efficient
operation of the coal industry in the long term requires the transition to the market environment,
completion of privatization processes, and the introduction of a competitive coal market.
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BANKING SERVICES
Page 108, paragraph 4.99

5) The Secretariat Report states that the National Bank of Ukraine issued a 'Programme for
Development of the Financial Sector 2015-2020' on 23 March 2015.
Could Ukraine please provide more information on this program, particularly with regard to its
implications for trade and investment in financial services?

Answer:
In 2015, the National Bank of Ukraine developed and adopted the Comprehensive Program of
Ukraine Financial Sector Development Until 2020 (the "Comprehensive Program"). Its provisions
set forth the stages, directions and the pace of reforms in the Ukrainian financial sector.
A trigger tode devevelopment the Comprehensive was signing of the Association Agreement with
European Union. The choice of the European development model and building up a financial sector
capable of ensuring sustainable development and market competitive environment required a
systemic resolution of accumulated problems, major among which were the rapid growth of share
of distressed assets in banks' balance sheets, considerable outflow of deposits, high dollarization of
loans and deposits, insufficient amount of equity and regulatory capital of banks etc.
The main objective of the Comprehensive Program is to establish a fully-fledged, efficient and
effective financial market in Ukraine, build its infrastructure, and strengthen its resilience to crisis
developments on the global financial markets. Implementation of the Comprehensive Program
would enable Ukraine to speed up the economic development and its integration in the European
Economic Area on a competitive basis.
Main directions of implementation of the Comprehensive Program are set as follows:
A. Ensuring financial stability and dynamic development of financial sector;
B. Development of institutional capacity of financial sector regulators;
C. Protection of rights of financial market consumers and investors.
The overall implications of the Comprehensive Program shall be a gradual liberalization of capital
flow as provided in the Association Agreement with European Union.
For more details of the Comprehensive Program of Ukraine Financial Sector Development Until
2020 please visit the official website of the National Council of Reforms
(http://reforms.in.ua/sites/default/files/upload/docs/strategy2020_18062015-
eng_june_2015_1.pdf).

INSURANCE SERVICES
Page 109, paragraph 4.104

6) The Secretariat Report states that 'in 2015, a draft Law No. 1797-1 of 6 February 2015 "on
Insurance" was submitted for consideration to the Verkhovna Rada'.
Could Ukraine please provide an overview of this new insurance law, particularly with regard to its
implications for foreign investment in insurance services in Ukraine and the provision of insurance
services to Ukrainian entities on a cross-border basis.

Answer: The new draft law "On Insurance" No. 1797-1 was recently adopted in the first reading.
This draft Law aims, among others, at enhancing consumers rights protection, bringing Ukrainian
legislation in line with the EU legislation and standards, improving monitoring and strengthening
the control over the insurance sector, improving the licensing regime and introducing international
standards of corporate governance and prudential supervision, and developing long-term life
insurance.
The new law will introduces a new order of legislative regulation of the insurance (reinsurance) and
brokerage activities for both residents and non-residents. It will improve legal system so as to
ensure further development of insurance market, relevant state regulation and supervision. The
adoption of the new insurance law will help to create a more competitive environment by
introducing equal conditions for both resident and non-resident insurers, and, thus, improve the
quality of insurance services and reduce their costs for consumers.
With respect to providing insurance services on a cross-border basis, Articles 3 and 4 of the new
draft law maintain the previously existed restrictions providing for the exhaustive list of services
that can be provided by the non-resident insurer (mode 1), in particular: i) insurance of risks
related to maritime shipping and commercial aviation and spaceships and freight (including
satellites), with such insurance to cover any or all of the following: goods being transported, the
vehicle transporting the goods and any liability arising therefrom; ii) reinsurance; iii) ancillary
insurance services such as consulting services, valuation of actual risks and satisfaction of claims;
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as well as iv) insurance mediation subject to valid licenses issued for this type of service in their
home country.

TELECOMMUNICATIONS SERVICES
Page 121, paragraph 4.168

7) The Secretariat Report states that Ukraine is in the process of implementing number
portability to stimulate competition, referring to NCCIR Decision No. 394 of 31 July 2015.
Could Ukraine please provide an update on its implementation of this policy on number portability?

Answer: The implementation of the number portability services in Ukraine is at the stage of
selecting the relevant equipment supplier by the Administrator of the ported numbers centralized
database (the UCRF) with competitive bidding results being currently reviewed.
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CANADA
Government Report (WT/TPR/G/334)
Part III. Trade Related Reforms; 3.1 Trade Performance; paragraph 3.19, page 11
The Government Report states that the Government of Ukraine aims to create an export-credit
agency and establish an export promotion agency, and plans to open eight trade representative
offices around the world.

1. Could Ukraine please elaborate on the status of this initiative, including where these offices
would be located, and when these offices will be established?

Answer: According to the draft Presidential Decree (approved by the Cabinet of Ministers),
developed by the Ministry of Economic Development and Trade, eight trade representative offices
are to be established in the following preliminary identified locations: the EU (Brussels), the
WTO (Geneva), Turkey, China, Egypt, Poland, Germany and the USA. This Decree is being
considered by the President of Ukraine. Funding for establishment of the respective offices is also
foreseen in the 2016 State Budget.
In regard to creation of export-credit agency the Government of Ukraine is in the process of
concept approval and development of respective draft law. With respect to the establishment of an
export promotion agency, so far the Ministry of Economic Development and Trade is developing a
project plan. Currently the donor-funded project team is assisting the Ministry with its export
promotion activity.

2. Could Ukraine please elaborate on whether additional offices will be considered in future and, if
so, where?

Answer: The Government of Ukraine will make a final decision on initial and additional offices
after abovementioned Presidential Decree comes into force.

Part III. Trade Related Reforms; 3.4 Government Procurement; paragraph 3.49, page 14
The Government Report notes that "On 29 December 2015, the Verkhovna Rada adopted new law
on public procurement and by autumn 2016 all public tenders will be transferred into electronic
format and will be conducted through the electronic procurement system "Prozorro"
(http://www.prozorro.org)." Canada warmly welcomes this development.

3. Will there be summary notices in English for procurement covered under Ukraine's GPA market
access schedule?

Answer: Summary notices will be posted on Prozorro for bids exceeding EURO 133 thousands.
The notice will at least include the subject matter of the procurement; the final date for the
submission of tenders, and the address from which procurement documents may be requested.

4. Will this website be used by the government of Ukraine to centralize all information relevant to
government procurement, such as award information, laws and regulations, etc.?

Answer: The Prozorro website will be used by the government of Ukraine to centralize all
information relevant to government procurements including award information as well as public
procurement related laws and regulations.

5. Does Ukraine foresee any challenges to its plan to publish all procurement opportunities on this
website in the fall of 2016?

Answer: Ukraine does not presently foresee any challenges to its plan to publish all procurement
opportunities on this website in the fall of 2016.

Secretariat Report (WT/TPR/S/334)
PART III. TRADE POLICIES AND PRACTICES BY MEASURE; (3.2) MEASURES DIRECTLY
AFFECTING IMPORTS; (3.2.2) Ordinary customs duties:
PARAGRAPH 3.14; PAGE 41
As the Secretariat report explains, Ukraine levied an import surcharge of 10% on agricultural
products and 5% on industrial goods from February-December 2015. Imports from all trading
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partners, including those with preferential trade agreements with Ukraine (and within tariff
quotas), were subject to the measure, and by the end of 2015, the surcharge had raised
Hrv 25 billion according to the Ukrainian Ministry of Finance. The report states that the import
surcharge would have been abolished from 1 January 2016.

6. Could Ukraine please confirm that import surcharges have been removed effective
1 January 2016 and indicate whether any import surcharges are in effect now or being planned for
implementation this year?

Answer: Ukraine confirms that import surcharges have been removed effective 1 January 2016.
No import surcharges are currently in effect or being planned for implementation this year.

PART III. TRADE POLICIES AND PRACTICES BY MEASURE; (3.2) MEASURES DIRECTLY
AFFECTING IMPORTS; (3.2.6) internal taxes:
PARAGRAPH 3.26; TABLE 3.9; PAGE 47
In its discussion of internal Ukrainian taxes, the Secretariat Report states that "…VAT exemptions
may also be accorded on a temporary basis." In Table 3.9, "grains and other industrial crops" are
listed to be VAT exempt until the end of 2017. The Secretariat report notes on page 90 that
Ukraine's production of grains was in the range of 60-65 million tonnes in recent years, with
approximately half of that total exported. It also states that Ukraine ranks among the major
exporters of maize, feed wheat and barley.

7. Could Ukraine describe explain the criteria used to determine which activities/groups of
products will be granted temporary VAT exemption? In particular, could Ukraine explain its
rationale for granting the VAT exemption to "grains and other products"?

Answer: The tax code allows the application of special VAT regime for agriculture, fishery, and
forestry (now valid only until 1 January 2017, See 2.15 in the Government Report). To qualify, the
cost of goods and services related to agriculture provided by the entity should be at least 75% of
total costs.
Due to overload of requests for compensation received from the agriculture producers, the
Government was forced to implement this necessary and temporary measure of exempting grain
and industrial crops so as to release the burden from the budget.
Currently export of grain and industrial crops is subject to zero rate and is subject to VAT refund
together like other products.

PART III. TRADE POLICIES AND PRACTICES BY MEASURE; (3.3) MEASURES DIRECTLY
AFFECTING EXPORTS; (3.3.5) Export promotion and marketing assistance: PARAGRAPHS
3.67 – 3.68; PAGE 59
According to the Secretariat report, Ukraine passed a resolution with the objective of assisting
Ukrainian enterprises in expanding the markets for their products abroad in 2011. The resolution
calls on central and local authorities to implement an action plan for the development and
employment of Ukraine's export potential. According to the Ukrainian authorities, the action plan
introduces effective mechanisms of government support to national producers.
Further, the Cabinet of Ministers introduced a system of government support to Ukrainian
exporters in August 2013. The stated purpose of the legislation is to develop export-oriented
industries, improve the quality and competitiveness of exported goods, improve Ukrainian
exporters' positions in promising markets and increase the volume of foreign trade.

8. Could Ukraine provide more details as to the above-mentioned action plan for the development
and employment of Ukraine's export potential and to the type of government support that is being
granted to Ukrainian exporters in the Ukrainian Cabinet of Ministers Resolution No. 568-r "On
Approval of the Concept of Government Support System for Ukraine's Exports"?

Answer: Both the Action Plan up to 2015 (referred to in para. 3.67 of the Secreteriat Report) and
the Concept foresee measures that were to be realized during 2013-2015. The 2016 State Budget
of Ukraine does not foresee any financial support for the implementation of these plans.
The Action Plan up to 2015 approved by the Cabinet of Minister's Resolution No.1206 of
16 November 2011 provides for basic export promotion and trade facilitation measures, such as
providing information on export-related matters, conducting analysis on export potential,
enhancing protection of domestic producers under the WTO Dispute Settlement Mechanism,
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establishment of trade offices within diplomatic missions of Ukraine abroad, improving transport
infrastructure and logistics, and others.
In accordance with the Cabinet of Minister's Resolution No. 568, the Concept of the Government
Support System for Ukraine's Exports foresees measures aimed at development and
implementation of an effective policy of the state support for export, in particular institutional,
organizational, informational and financial measures. The above-mentioned measures are not
contingent upon export and refer to a number of sectors, among them, high-tech industries
(aviation, shipbuilding, defence and space industries), pharma, transportation and logistics
services.

PART III. TRADE POLICIES AND PRACTICES BY MEASURE; (3.4) MEASURES AFFECTING
PRODUCTION AND TRADE; (3.4.11) Price Controls:
PARAGRAPH 3.147; PAGE 78
The Secretariat report outlines the price control regime that has been in place in Ukraine for spirits
since 2008. It states that minimum prices were introduced with the stated aim of combatting
illegal production and trade. The minimum prices, set for sales at the wholesale and retail level,
originally applied only to domestically produced beverages. However, the system has been
extended to imported alcoholic beverages since June 2014. The minimum prices were adjusted
upward with effect from 1 September 2015, but retain a substantial differential between similar
products. The minimum price for whiskey, for instance, is very nearly double the minimum price
for vodka. The report also notes that there is a substantial domestic production of vodka.

9. Could Ukraine please explain the rationale for having a lower minimum price for vodka as
compared to similar products, such as whiskey, rum, gin, and other spirits?

Answer: The average market price of vodka brands consumed in Ukraine is generally lower than
the average market prices for whisky, rum, gin and other spirits.

PART IV. TRADE POLICIES BY SECTOR; (4.1) AGRICULTURE (4.1.4) Export measures:
PARAGRAPH 4.18; PAGE 89
The Secretariat Report notes that Ukraine effectively taxes agricultural exports by failing to refund
VAT to exporters of agricultural products. Conversely, agricultural producers selling domestically
are entitled to VAT refunds as outlined in paragraph 4.12 (pages 87-88).

10. Could Ukraine outline whether it plans to introduce legislation to subject all agricultural
producers to the same taxation regime?

Answer: The special VAT regime for agriculture has been sunset to expire on 1 January 2017.

PART IV. TRADE POLICIES BY SECTOR; (4.1) AGRICULTURE (4.1.6) Selected agricultural
products: PARAGRAPH 4.26 GRAINS; PAGE 91
The Secretariat report states that, "it appears that the Agrarian Fund has carried out intervention
purchases of grains in most marketing years since accession…" For the marketing year 2013/14,
purchase targets for public intervention were set for wheat, rye, barley, sugar, maize, milk
powder, butter, buckwheat, oats, millets and peas.

11. Could Ukraine explain the procedure for the purchase of these commodities, outline the prices
at which these products were procured and provide the expenditures for these purchases?

Answer: The Agrarian Fund priority is the formation of public intervention fund - the state reserve
of certain agricultural products, which should guarantee the country's food security. Filling the
state intervention fund is through intervention measures such as spot and forward purchases.
Purchases made at prices no lower than the guaranteed minimum, providing the appropriate level
to agricultural production efficiency. The purchases are made under the contracts with the agrarian
producer which should fulfill several conditions i.e. providing documents relating to its registration,
certificate of the payer of VAT, annual balance sheets and financial statements of producers in the
last two calendar years with a mark of statistics, certificate of absence of arrears of taxes and fees
etc