UKRAINE: GOVERNMENT ANNOUNCES DECREE TO ELIMINATE

UNCLAS KYIV 000497 SIPDIS SENSITIVE STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTA STATE PLEASE PASS TO USTR FOR CKLEIN, PBURKHEAD, CMORROW USDOC FOR 4201/DOC/ITA/MAC/BISNIS USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYK USDA FOR FAS/ONA AND FAS/OCRA GENEVA FOR USTR E.O.: 12958: N/A TAGS: ETRD EFIN WTRO PGOV UP SUBJECT: UKRAINE: GOVERNMENT ANNOUNCES DECREE TO ELIMINATE IMPORT TARIFF SURCHARGE ON MOST PRODUCTS REFS: A) KYIV 425 B) STATE 17765 C) KYIV 349 ¶1. (SBU) Senior GOU officials announced to the press on March 18 that the Cabinet of Ministers eliminated the 13 percent import tariff surcharge recently introduced by Law No. 923-VI (ref C),except for imported refrigerators and cars. (Note: We assume the exceptions are HS codes 8418 and 8702-8704, although no press reports referred to specific HS codes. End note.) The move followed statements to us by several GOU officials that they opposed the tariff surcharge and were attempting to reverse the measure (ref A). ¶2. (U) The Cabinet of Ministers Resolution that was apparently approved on March 18 has not yet been published, however. Minister of Economy Bohdan Danylyshyn told the press that the tariff surcharge would be eliminated 10 days after publication of the Resolution. Volodymyr Baluta, head of the Ministry of Economy's WTO Department, told us on March 19 that he expected the Resolution to be published within a few days. ¶3. (SBU) PM Yulia Tymoshenko announced that the GOU would simultaneously introduce a draft law to the Rada (parliament) to cancel the tariff surcharge entirely. (Comment: It is not clear why the GOU would eliminate the tariff surcharge on some products through a Cabinet of Ministers Resolution, but on others through a law. End comment.) In fact, Our Ukraine MP Mykola Katerynchuk already submitted a draft law (No. 4206) to this effect on March 16. Comment: A Caveat -------------- ¶4. (SBU) Post cautions that, while the Cabinet of Ministers is apparently attempting to repeal the tariff surcharge, at least for the majority of goods, the government's legal authority to do so is not clear. The Constitution clearly states that only the Rada may alter import tariffs, so it is possible that an affected Ukrainian producer could seek a court injunction against the Cabinet of Ministers Resolution on the grounds that it, and the clause in Law No. 923-VI that purportedly grants the Cabinet of Ministers such authority, violate the Constitution. We therefore intend to encourage Ukrainian officials to support a draft law that fully and unequivocally repeals the import tariff surcharge. End comment. TAYLOR