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Ukraine must settle the issues of certification of grain and elevators, the activities of the Guarantee Fund for the grain warehouse receipts

Kyiv. July 18, 2013

Ukraine taking into account the feedback from the participants of the grain market in the near future has to resolve all the issues of certification of grain and its storage services, as well as the activities of the Guarantee Fund obligations under warehouse receipts for grain.
This opinion was expressed by the head of the practice of the international trade law of Volkov & Partners Andriy Zablotskiy during a press conference at the Interfax-Ukraine agency on Tuesday.
"Despite the fact that, in general, the legislation is moving in the right direction, we believe that these two issues - the certificate of quality and Guarantee Fund – are to be adopted in the near future," - he said, commenting on today existing laws ruling these issues.
According to A.Zablotskiy, in particular, the bill number 2459 presented by MPs on amending the law on grain and grain market in relation to deregulation is the most optimal for today.
In addition, the bill number 2436, initiated by the president, on the total abolition of grain and its storage services certification may have a positive impact on the market, provided it is revised according to the comments of market operators.
At the same time, the bill number 2361a, initiated by the government, comprising the necessity of the examination on GMOs  to be reflected in the certificate of quality "will let the government control exports."
"Today, the issue of GMO in Ukraine is governed in a complicated way, no GMO has been registered. This suggests that if the lawmaker is trying to fix the necessity of obtaining a certificate for each shipment on the presence or absence of GMO, they will be able to control exports. We do not believe it is appropriate at this time because the country lacks registered GMO ", - he said.
Commenting on the initiative to establish a guarantee fund obligations under warehouse receipts for grain, A.Zablotsky said: "In Ukraine, this mechanism is turned on its head."
"Today, there remain a number of open questions regarding the activity of grain warehouses that are required to enter the Guarantee Fund. In our view, they are incorrect, since they create the possibility of the influence of the fund on the warehouses if the current legislation is not changed. We would want the comments of the market participants to be accepted, because, given the potentially large export forecasts, the activity of the warehouses can pause at one point, "- he said.
As reported, the Ukrainian Agrarian Association has critically evaluated the prospects of implementation of the law on the establishment of the Guarantee Fund commitments on warehouse documents. In February, they appealed to the Ministry of Agrarian Policy and Food requesting to amend the law and to create for this a special working group comprising experts of the market.
The Verkhovna Rada on December 6, 2012 adopted the Law № 5462-VI, which ammended the requirements for certification of the warehouse services for the period of one year and a mandatory certification of grain quality and its products both in domestic transportation, and in the export-import operations.
Before that, in July 2012, the Cabinet of Ministers simplified the procedure of certification of the grain warehouses on compliance of the services for the storage of grain and products introducing an unlimited duration of the certificate, and also gave the right to certify the grain warehouses to the persons who use them under the contract of rent and lease.
By another ruling in September of the same year, the Cabinet abolished the mandatory registration of the certificate of quality of grain and its products when moving within the country, including in the directions of ports (except for the purchase of grain at the expense of state and local budgets).

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