Safeguard investigations in Ukraine, Special measures in Ukraine, Surge imports

General overview.
The basic Ukrainian law which governs safeguard (special) investigations in Ukraine is the Law “On Imposition of Safeguard (special) Measures to Import” (the Act). The Act regulates the principles and procedure of initiation and execution of special investigations of the facts of surge imports into Ukraine from other countries, which cause serious damage, or threaten to cause serious damage, to national producers and may result in application of safeguard (special) measures. Investigations shall be performed in the state language of Ukraine, i.e. Ukrainian.

If a trend of increased imports into Ukraine may require application of special measures, an appropriate body of the executive power of Ukraine shall notify the Ministry thereof. The Ministry may, at its initiative, start to gather information in question. The national producer may direct to the Ministry an application with a claim to apply the measures against imports into Ukraine.

Definition of key terms:
1) directly competitive product shall mean a product, which directly competes with a product under special investigation;
2) exporter shall mean a subject of the legal and economic relations, which exports the product (products) from the country;
3) interested party shall be any person notifying the central body of executive power in the field of economic policy (hereinafter — the Ministry) of his interest to be involved in a special antidumping investigation. The interested parties could be:
Foreign producer, exporter or importer of the product under investigation, or corporation (association), where the majority of its members are foreign producers, exporters or importers of the product under investigation;
the empowered authorities of a country exporting products under investigation;
national producers, producers or wholesale seller of the like products in Ukraine;
the corporation (association) where the majority of its members produce or carry out wholesale trade in like products in Ukraine; a trade union comprising employees of enterprises producing or carry out wholesale trade in like products in Ukraine;
bodies of the executive power within their remit;
4) import shall mean importation of product (products) into the customs territory of an importing country for consumption in this country;
5) importer shall mean a subject of economic and legal declaring delivery of product (products) to the customs territory of Ukraine;
6) national producer shall mean an aggregate number of producers of like products or directly competitive products or those producers whose aggregate production of such a product constitutes the major portion of the total amount of these products being manufactured in Ukraine.
7) like product shall mean an identical product i.e. alike in all aspects to the product under investigation, or in the absence of such product, another product which although not alike in all aspects, has distinguishing characteristics closely resembling those of the product under investigation;
8) special investigation shall mean the investigation of the facts of increased imports into Ukraine which causes serious damage, or threaten to cause serious damage, to national producers of like or directly competitive products.

Conducting special investigation
A special investigation shall be carried out for the purpose of establishment on the basis of the factors if the imports cause or threaten to cause serious damage to national producers in Ukraine.

A period of duration of an investigation shall normally be from six months to one year. In some cases such a period can exceed one year.

The Ministry shall begin an investigation and within five days from the date on which an appropriate decision by the Commission was made and gives public notice in the newspaper.

The interested parties shall have the right to apply to the Ministry in writing, within the time limits specified in the notification of initiation of a special investigation, with a requirement for the hearing to be held at the Ministry in matters of a special investigation with their participation therein.

The interested parties may supply their comments to such information, which shall be accounted by the Ministry, provided that such comments are well grounded and have been supplied to the Ministry within fixed time limits. The information and evidence supplied to the Ministry by one of the interested parties in the course of a special investigation shall be also supplied to all other interested parties involved.

In the course of a special investigation the Commission may make a decision on application of special provisional measures and/or surveillance measures. For the purpose of completion of a special investigation the Ministry shall submit a report to the Commission on the results thereof.

Application of special provisional measures
Not earlier than 45 days from the date of initiation of a special investigation the Commission may make a decision by a simple majority vote on application of special provisional measures by means of imposition of a special duty. A rate of a special duty payable by an importer of products into Ukraine shall be established in an appropriate decision of the Commission on application of special provisional measures. A special duty shall be paid in cash or non-cash form or by means of cash deposits or bonds equal to the amount of duty if not otherwise established by Ukrainian legislation.

If in the course of a special investigation the Ministry establishes a threat to cause serious damage, the Commission shall, at the recommendation of the Ministry, make a decision to apply in the course of such investigation surveillance measures. The importation of a product into the customs territory of Ukraine, to which the surveillance or regional surveillance measures against imports to Ukraine has been applied, pursuant to the appropriate decision of the Commission, shall be carried out if an appropriate import license issued by the Ministry under established order and form, within seven working days from the date of submission by an interested importer of an appropriate application, has been supplied to the appropriate customs authority of Ukraine.

Application of special measures
Where an increase in imports into Ukraine is taken place in the amounts and/or within terms or under conditions, which cause or threaten to cause serious damage, the Commission, for the purpose of protection of the national interests, may decide to apply special measures:
1) limit the period of validity of import licenses;
2) assignment of a quota on imports.
3) establishment of a special duty for imports into Ukraine, which are under special investigation.

The special duty determined by the Commission shall be paid by the importer of the goods into Ukraine regardless of other taxes and fees (mandatory payments) paid on imports into Ukraine. The rate of the special duty shall be determined in percentage points to the customs value of the goods under special investigation. Customs value of these goods is calculated according to the basic terms of delivery CIF-Ukrainian border. The special duty is to be paid in a corresponding amount and separately in every case with no discrimination and regardless of the exporting country. The special duty shall be paid in cash or through a bank transfer or by depositing the amount of duty on a deposit account or registering a respective debt liability, if otherwise not stated by Ukrainian legislation.

If quotas are assigned, the Commission shall take into account the support of the traditional flow of goods and/or the volumes of sales under contracts signed for imports into Ukraine on which the Ministry and Service have informed the Commission.

The special measures shall be applied for a period of time as deemed necessary to prevent serious damage or remedy serious damage caused to national producers, and to adjust the status of national producers in the appropriate market. This period shall not exceed four years including the period of application of the surveillance measures. The period of application of the special measures necessary to prevent serious damage or remedy serious damage caused to national producer may be extended by a decision of the Commission. A decision on application of safeguard measures may be challenged against in court within one month from the date of application of such measures.