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Possible cancellation of decision on safeguard investigation on imports of certain oil derivatives may become a precedent

Kiev. April 7, 2011

Possible cancellation of the decision of the Interdepartmental Commission on International Trade (Commission) on initiation and conduct of safeguard investigation as regards imports to Ukraine of certain oil derivatives by the District Administrative Court of Kiev threatens to create a precedent. This is the common view of lawyers polled by Interfax-Ukraine.
"If the court overturns the decision of the Commission, it will set a precedent, which will allow foreign manufacturers, exporters and importers of products to Ukraine to take advantage of it," says Associate with Volkov & Partners Law Firm, Andrii Zablotskyi.
Head of West Ukrainian Branch of Arzinger Law Firm, attorney Markian Malskyy also admits chances a precedent to be set, however, adds that challenging of the Commission’s decision cannot in any way mean that it strips its power.
Lawyers agreed that it would be extremely difficult to challenge the decision on initiation and conduct of the investigation. They explained that it would be virtually impossible to prove that there were no formal reasons for its initiation, in particular, due to the fact that the decision contains many subjective components, as it was noted by M. Malskyy.
Reportedly, the Association of Operators on the Ukrainian Market of Petroleum Products has filed a lawsuit demanding cancellation of the safeguard investigation that was launched by the Interdepartmental Commission on International Trade concerning importation of certain types of oil products. The court hearing will take place on April 7.
The safeguard investigation concerning import of certain oil derivatives to Ukraine regardless of country of origin and export was initiated at the end of January 2011. Notably, the Ministry of Energy and Coal Industry of Ukraine called for introduction of import duties of EUR 80 per ton of diesel fuel and EUR 130 per ton of gasoline.
However, on March 14 the Minister of Energy and Coal Industry Yuriy Boyko stated that Ukraine was not going to impose any duties on imports of oil products.
Experts argue that import quotas may be introduced instead of taxes. Ukrainian oil refineries numerously claimed that they buy oil products at world prices, while the member countries of the Customs Union, in particular, Belarus, which is the major exporter of oil to Ukraine, buy crude oil which is not levied by taxes. Local plants are of the view that imposition of taxes will allow to boost the volumes of oil refinery and conduct modernization of production.
Major petrol filling stations that predominantly import oil products criticized the possibility of import taxes imposition, as it may lead to the market monopolization. In addition, the embassies of Lithuania, Romania and Poland expressed their concerns on the situation in their joint letter to the Prime-Minister of Ukraine.

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