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Viewing cable 07KYIV1338, UKRAINE: GOU RUSHES WTO LEGISLATIVE PACKAGE

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Reference ID Created Released Classification Origin
07KYIV1338 2007-06-01 13:28 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Kyiv
VZCZCXRO2870
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHKV #1338/01 1521328
ZNR UUUUU ZZH
P 011328Z JUN 07
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 2543
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHGV/USMISSION GENEVA 0077
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBI/AMCONSUL MUMBAI 0043
UNCLAS SECTION 01 OF 02 KYIV 001338 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTA 
STATE PLEASE PASS TO USTR FOR KLEIN/MOLNAR 
USDOC FOR 4201/DOC/ITA/MAC/BISNIS 
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYCK 
GENEVA FOR USTR 
MUMBAI FOR WKLEIN 
 
E.O.: 12958: N/A 
TAGS: ETRD WTRO ECON PGOV UP
SUBJECT: UKRAINE: GOU RUSHES WTO LEGISLATIVE PACKAGE 
THROUGH PARLIAMENT AMID POLITICAL CRISIS 
 
REF: A. MOLNAR-PYATNYTSKIY EMAILS OF 5/29 AND 5/30 
     B. KYIV 1314 
     C. KYIV 897 
     D. KYIV 790 
 
KYIV 00001338  001.2 OF 002 
 
 
1. (SBU) Summary: Ukraine's Rada (parliament) voted on May 
31 to adopt 11 laws considered necessary for WTO accession. 
The drafting process was rushed to meet the timeline for 
the Rada's planned dissolution, however, and close scrutiny 
will be necessary to ensure the adopted laws are WTO 
consistent.  In parallel, the Rada "re-passed" a group of 
53 laws that had previously been adopted under legal 
ambiguity in April and May.  Among these laws were several 
that may not be consistent with WTO rules, especially one 
reinstating mandatory certification for imported 
agricultural products.  While these newly adopted laws may 
not be perfect from a WTO standpoint, Ukraine's pro-WTO 
forces recognized that they had a narrow window to push 
through legislation, and by so doing should help push 
Ukraine's accession into the final stages.  End Summary. 
 
2. (U) Ukraine's Rada (parliament) on May 31 adopted a 
package of 11 laws identified as necessary for WTO 
accession.  The vote came after President Viktor Yushchenko 
extended the suspension of his decree dissolving the Rada, 
part of the compromise meant to resolve the country's 
political crisis (ref B). 
 
A Rushed WTO Package 
-------------------- 
 
3. (U) The following bills made up the adopted WTO package: 
-- Amendment to the law "On Value Added Tax" (regarding 
taxation of agricultural enterprises); 
-- Law "On the Establishing, Testing, Transportation and 
Use Of Genetically Modified Organisms" (to create a 
framework for the creation, testing, and use of products of 
biotechnology); 
-- Amendment to the law "On Insurance" (to cancel 75% limit 
for insurance in case of marine, aviation, and transport 
insurance); 
-- Amendment to the law "On the Customs Duty of Ukraine" 
(to convert Ukraine's tariff nomenclature to HS 2002); 
-- Amendment to the law "On Safety and Quality of Food 
Products" (to change the time of advance notification of 
inspection from 48 hours to 60 days); 
-- Amendment to the law "On the Export Duty Rates for Seeds 
of Certain Oil Crops" (to cancel indicative prices for 
those products); 
-- Amendment to the law "On the Export Duty Rates for Scrap 
Ferroalloys" (to fix schedule of reductions to begin upon 
accession); 
-- Amendment to the law "On the Export Duty Rates for Scrap 
Nonferrous Metals and Semi-Finished Products Made of Those 
Metals" (to fix schedule of reductions to begin upon 
accession); 
-- Amendment to the law "On Standards, Technical 
Regulations, and Methods of Determining Compliance" (to 
ensure precedence of international over regional standards 
and introduce provisions related to conformity assessment 
recognition); 
-- Amendment to the law "On Procedures of Payments in 
Foreign Currency" (to extend payment period from 90 to 180 
days); and 
-- Amendment to the Civil Code of Ukraine to allow for the 
destruction of counterfeit and pirated goods, and 
equipment. 
 
4. (U) Post notes that most of these laws, with the 
exceptions of the customs duty amendment and the oil crop 
seeds amendment, were on USTR's most recent list of 
necessary legislation sent to the Ukrainians (ref A). 
 
5. (SBU) The vote followed hurried preparations by GOU 
officials once it became clear that the President intended 
to allow the Rada to function only for a matter of days.  A 
senior member of Ukraine's WTO team confided to us on May 
30 that the legislative package was indeed rushed through 
the drafting process.  According to this official, the 
Ministry of Economy was not able to review for WTO 
consistency many of the final drafts submitted to the Rada, 
 
KYIV 00001338  002.2 OF 002 
 
 
with the Presidential Secretariat and other Ministries 
doing their own last-minute drafting.  (Comment: Post also 
understands that Washington agencies had intended to 
provide additional comments on several of the draft bills. 
End Comment.) 
 
Additional Laws Pass as Part of Political Compromise 
--------------------------------------------- ------- 
 
6. (U) As reported by ref B, the Rada on May 29 "re-passed" 
53 laws that previously passed in April and May, after 
Yushchenko had formally dissolved the Rada.  Included among 
those 53 were several laws that may not be WTO-consistent. 
President Yushchenko has so far neither signed into law nor 
vetoed the bulk of the 53 bills (with a few exceptions not 
relevant to WTO accession), but media reports speculate 
that the President may have promised to sign all the laws 
without exception, as part of the deal meant to solve the 
political crisis. 
 
7. (U) Post has identified the following laws as of 
possible concern for WTO accession: 
-- Amendment to the law "On the Quality of Imported 
Agricultural Produce" (Establishes compulsory certification 
on imported agricultural goods in clear violation of WTO 
rules); 
-- Amendment to the law "On Sugar Production and 
Regulation" (Changes the authority from the Rada to the 
Cabinet of Ministers for establishing minimum and maximum 
prices for sugar, and could raise objections from 
Australia); 
-- Amendment to the law "On Grapes and Wine" (Relates to 
geographical indications and could raise European Union 
concerns); 
-- Amendment to the law "On the Basis of State Monitoring 
(Control) of Economic Activities" (Alters Ukraine's 
inspections regime); 
-- Two amendments to the law "On Licensing Economic 
Activities" (Changes some licensing procedures, in 
particular extends the term of inspection for licensing 
from 10 to 30 days for transportation services); 
 
8. (SBU) Ambassador sent a letter to President Yushchenko 
in April urging him not to sign the law concerning 
compulsory certification of imported agricultural goods. 
Lead WTO negotiator Valeriy Pyatnytskiy assured Ukraine's 
Working Party in Geneva in May that this particular bill 
would not enter into force, as the GOU recognized that it 
violated WTO rules.  Head of the Ministry of Economy's WTO 
Department Vyacheslav Tsymbal told Econoff on May 31 that 
he still hoped the President would veto this particular 
law.  (Comment: Despite the negative implications for 
accession, the President might not want to threaten a wider 
political deal by vetoing this law.  The GOU understands 
that the draft is not WTO compliant, however, and, should 
the President sign it, would likely seek its repeal once 
the Rada is again in session.  End Comment.) 
 
Comment: Making Lemonade 
------------------------ 
 
9. (SBU) Ukraine's political crisis threatened to delay 
work on the legislative front, as the GOU was facing the 
prospect of no sitting legislature until after fall 
elections.  The pro-WTO forces, with critical support from 
the President's office, therefore decided to push through 
everything they could now, during the narrow window of 
opportunity available.  What passed will likely prove to be 
imperfect, but at least should keep up the accession's 
momentum and bring Ukraine to the doorstep of the WTO.  And 
the fact that MPs voted in favor of several controversial 
measures, such as creating a framework for the products of 
biotechnology, demonstrates a strong, political-level 
commitment to complete accession as soon as possible. 
 
TAYLOR