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Ukraine: to respond Russia with utilization fee means to breach international obligations - Lawyer

Kyiv. September 4, 2012
“Prime-Minister of Ukraine, Mykola Azarov suggested introducing vehicle utilization fee for imports from Russia in return to the similar measure introduced by Russia, which may result in violation of international obligations and lead to complaints from Russia and other trade partners of Ukraine,” informed head of the international trade department of Volkov and Partners Law firm, Andrii Zablotskyi to the Interfax-Ukraine agency.
“Countermeasures (or “mirror measures”) are often used by the members as political pressure leverage, however being frequently contrary to the applying country’s obligations. Thus, to introduce similar measures in return for Russian restrictions may result in violation of Ukraine’s international obligations,” said he.
Mr. Zablotskyi explained: for example, if Ukraine introduced utilization fee for the specified products and the fee would be binding only for foreign companies, Ukraine might be regarded as a country in breach of non-discrimination principle. The above, in its turn, is already constituted a violation of international obligations and, all in all, may lead to Russia’s and other trade partner’s complaints.
Ukraine better not to apply “an eye for an eye” policy with regard to international relations, as there exists a number of regulatory agreements on international trade between Ukraine and Russia, including agreements establishing dispute settlement procedure,” considers Mr. Zablotskyi.
According to him, the WTO rules provide for countermeasures only in case if the Dispute Settlement Body decides that any of measures is inconsistent, and if a breaching party fails to timely comply with the WTO’s decision to cancel such measure.
The Lawyer believes that for Ukraine one of the ways to solve existing conflict is to file a request for consultations with Russia under the WTO. “Moreover, it is by no means necessary for a dispute to progress to the stage of tribunal, because most disputes are usually resolved at the stage of consultations,” said Mr. Zablotskyi.
Reportedly, on the 1st of September the new RF’s government order “On utilization fee with regard to vehicles” entered into force. That means utilization fee will be paid for each vehicle imported to or produced in the Russian Federation in order to ensure environmental safety.
Mr. Azarov in his turn told about an intention to consider whether to introduce utilization fee for the items imported from the Russian Federation, which are subject to utilization fee in Russia.
As government source informed to “Interfax-Ukraine”, on September 5 the Cabinet of Ministers during its session will consider draft resolution “On Introduction of 30% vehicle utilization fee for imports from Russia”.
According to Mr. Zablotskyi, during Monday session the government determined main approaches to the introduction of the fee.
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