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Ukraine takes tobacco and alcohol dispute with Armenia to WTO


INTERFAX–UKRAINE
Kyiv. September 20, 2010

Fοr t?е first time since Ukraine became a World Trade Organization (the WTO) member, іt ?аѕ requested t?аt WTO Dispute Settlement Body establish a Panel tο settle a dispute wіt? Armenia concerning less favourable conditions fοr the import οf Ukrainian tobacco and alcohol t?аn for like products οf national origin.
The respective request was posted on WTO's web site.
According to Ukraine’s statement, Armenia gave no response to Ukraine’s request for consultations. As such, there was no way to settle the dispute through negotiations.
"In case where a country refuses from consultations or does not go on them, a WTO member having placed a request for the consultations enjoys the right, under Article 4.3 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes, to immediately request the establishment of a panel to settle a dispute," Andrii Zablotskyi, an Associate from Volkov Koziakov & Partners, reported to Interfax-Ukraine.
He also highlighted that having reviewed the case, the Panel issues recommendations for the county, which has violated the WTO agreements, to bring its legislation in line with the respective WTO standards.
The Ukraine’s request on Creation of the Panel includes the following information: according to the Law “On Presumptive Tax for Tobacco Products” of March 24, 2000, the excise rate in Armenia is AMD6,500 ($17.7) per 1,000 imported cigarettes and AMD4,750 ($12.9) per 1,000 like domestic cigarettes. Moreover, Armenia imposes different excise taxes on alcoholic beverages, protecting domestic producers via discrimination of the products imported from Ukraine.
At the same time, Ukraine considers that such Armenia’s actions violate paragraphs 1, 2, 4 of Article III, of the General Agreement on Tariffs and Trade 1994 (GATT 1994), which stipulates that “the products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin” (national regime).
As it was reported earlier, in July 2010, Ukraine, for the first time exercised its right for consultations within WTO and placed a request for the consultations with Armenia to the WTO Dispute Settlement Body.
Pursuant to the application of Ukraine, Armenia applies the so-called “presumptive tax” to Ukrainian tobacco products and creates less favourable regime for Ukrainian products comparing to national treatment of goods.

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