LAW OF UKRAINE

of December 22, 1998 No. 331-XIV

About protection of national producer against the subsidized import

This Law determines the mechanism of protection of national producer against the subsidized import from other countries, custom unions or economic groups, regulates the principles and procedure for excitement and conducting antisubsiditsionny investigations, and also applications of countervailing measures.

Section I General provisions

Article 1. Determination of terms

In this Law terms are used in the following value:

1) antisubsiditsionny investigation - investigation according to this Law of the fact of provision of illegitimate subsidy;

2) conclusion positive conclusion about availability of subsidizing (damage) about availability of the fact of subsidizing (damage);

3) conclusion negative conclusion about availability of subsidizing (damage) about lack of the fact of subsidizing (damage);

4) state body - body of the legislative or executive authority of country of source or the country of export (custom union or economic group);

5) the exporter - the subject of economic legal relations exporting goods (goods) from the country of export;

6) damage - the essential damage caused to national producer or threat of causing essential damage to national producer, or essential preventing to creation or expansion of national producer of production of similar goods.

The procedure for determination of damage is established in article 13 of this Law;

7) import - import to customs area of the country of the commodity import (goods) intended for consumption in this country of import;

8) the importer - the subject of economic legal relations declaring revenues to customs area of Ukraine of goods (goods);

9) the compensatory duty (preliminary or final) special type of duties which are collected when importing to customs area of Ukraine of the goods which are subject to application of countervailing measures (preliminary or final);

10) countervailing measures - the provisional or final measures applied according to this Law in time or by results of antisubsiditsionny investigation;

11) competent authorities - the public authorities of the country of export or country of source (custom union or economic group) providing carrying out foreign and (or) external economic policy of said country within the powers;

12) the country of export - the country of goods' origin, imported to Ukraine. Also the intermediary country (custom union or economic group) can be considered as the country of export, except as specified, when the specified goods are conveyed as transit goods through this country, in it it is not made or in this country there is no comparable price for these goods;

13) country of source - the country (custom union or economic group) in which the goods were completely made or subjected to sufficient conversion or processing;

14) national producer - set of producers of similar goods or that from them which cumulative production constitutes the main part of all production volume in Ukraine of these goods. Features of determination of national producer are established in Article 14 and part eight of article 15 of this Law;

15) inquiry period - the period which is directly preceding initiation of antisubsiditsionny investigation for which the import subsidizing facts are investigated;

16) sale - cession of property one person in property or use and (or) in ownership and (or) in the order to other person, in particular transfer according to transactions of purchase and sale, lease of property, other civil transactions, and also when replacing one obligation with another or change of conditions of accomplishment of obligations;

17) the recipient - the subject of economic legal relations gaining sums of money or income from movement of goods which are subsidized in understanding of this Law;

18) the parties of antisubsiditsionny investigation - foreign producer, the exporter, the importer, consolidation (association), competent authorities of the country of export, national producer, etc. which were in accordance with the established procedure notified on initiation of antisubsiditsionny investigation;

19) the party interested - person who notified the central executive body concerning economic policy (further - the Ministry) on the interest in participation in antisubsiditsionny investigation according to part fourteen of article 15 of this Law and who takes active part in antisubsiditsionny investigation by submission in writing of proofs or the other information sufficient for the purposes of this investigation. Can be concerned parties:

foreign producer, the exporter, the importer of the goods which are object of investigation or consolidation (association) most of which of members is constituted by foreign producers, exporters or importers of the goods which are object of antisubsiditsionny investigation;

competent authorities of the country of export;

national producer, the producer or the wholesale seller of similar goods in Ukraine;

consolidation (association) most of which of members makes or sell wholesale similar goods in Ukraine;

the labor union combining employees of the companies which make or sell wholesale similar goods in Ukraine;

executive bodies in Ukraine within their competence;

20) subsidy - financial or other support by state bodies of production, conversion, sale, transportation, export, consumption of similar goods as a result of which the subject of economic legal relations of the country of export receives privileges (profit). Features of determination of subsidy are established in article 6 of this Law;

21) subsidy legitimate - subsidy which does not give the grounds for application of countervailing measures;

22) subsidy illegitimate - subsidy which gives the grounds for application of countervailing measures;

23) the subsidized import - import to customs area of the country of the commodity import (goods) using privileges from subsidy which is provided for production, conversion, transportation or export of such goods;

24) goods - any products, held for sale;

25) goods similar - identical goods, that is similar according to all characteristics on the goods which are object of investigation or, in the absence of these goods, other goods not similar according to all characteristics but having indicative signs, very similar to characteristic signs of the goods which are object of investigation;

26) the goods which are object of investigation - goods which import to Ukraine is object of antisubsiditsionny investigation and which are determined by it in the adequate notice about excitement and conducting this investigation;

27) the Ukrainian producers are producers of the similar or directly competing goods which are made in Ukraine.

Article 2. Scope of the Law

1. This Law is applied to the subsidized commodity import (goods) which is imported into Ukraine from the territory of the country of origin or from the intermediary country territory. In case the goods directly are not imported on customs area of Ukraine from country of source, and imported into Ukraine through the country of the intermediary by en route, one or more transactions are considered if it is possible, such which are performed between the country of goods' origin (goods) and Ukraine.

2. According to this Law countervailing measures can be applied to the subsidized import to Ukraine for the purpose of elimination of effects of subsidy which is is direct or indirectly provided for production, conversion, transportation or commodity export which import to customs area of Ukraine causes damage to national producer of similar goods.

Import to Ukraine of goods is considered object of countervailing measures if according to articles 6-9 of this Law these imported goods use privileges from illegitimate subsidy.

3. Operation of this Law extends to the subsidies specified in parts one and the second this Article which are provided by state body of country of source, the country of export or the intermediary country from which territory the specified goods are exported to Ukraine.

4. This Law does not exclude application:

1) special rules in industry of agricultural industry;

2) the measures applied within the General Agreement on Tariffs and Trade (further - GATT) and World Organization of trade (further the WTO);

3) the special rules established by international treaties of Ukraine which consent to be bound is this the Verkhovna Rada of Ukraine.

Article 3. Production language in antisubsiditsionny investigations

1. Production in antisubsiditsionny investigations according to this Law is performed in state language of Ukraine.

2. The data, written proofs and other information provided to the Ministry, the central executive body which realizing the state customs policy or Interdepartmental International Trade Commission (further - the Commission) according to this Law, are considered by them in the course of antisubsiditsionny investigation on condition of their statement in state language of Ukraine.

Article 4. Powers of the Commission on protection of national producer against the subsidized import

1. Conducting antisubsiditsionny investigation in Ukraine is performed according to this Law the Ministry, the central executive body realizing the state customs policy and the Commission.

2. The procedure for creation and work of the Commission is determined by the Law of Ukraine "About protection of national producer against dumped imports".

3. On commission sessions decisions are made about:

1) initiation of antisubsiditsionny investigation;

2) the positive or negative conclusions about availability of illegitimate subsidy and methods which give the chance to determine its amount;

3) positive or negative conclusions about availability of damage and its size;

4) determination of cause and effect relationship between the subsidized import and damage;

5) application of countervailing measures;

6) other questions within the powers provided by this Law.

4. If necessary the decision of the Commission on the questions specified in Item 6 parts three of this Article can be accepted routinely by vising by members of the commission of the draft of the relevant decision. At the same time the commission chairman or his deputy informs members of the commission and suggests them to state the point of view on this matter in time during which it can be considered and which does not exceed the terms established by this Law.

Article 5. Terms

1. Terms within which all actions according to this Law are made are established by this Law or determined by the Commission or the Ministry. The right to making of actions is lost upon termination of the specified terms. The documents submitted upon termination of these terms are not considered. The commission or the Ministry can make the decision on prolongation or renewal of terms in the presence of the bases sufficient for this purpose.

2. The terms established by this Law or determined by the Ministry or the Commission are estimated for years, months and days.

Term can be determined also by the reference to event which shall come inevitably.

3. The term estimated for years comes to an end in the corresponding month and number of the last year of this term.

The term estimated for months comes to an end the corresponding number of the last month of this term. If the end of the term estimated for months falls on month which has no corresponding number, this term comes to an end in the last day of this month.

If term is determined in the days, it is estimated from the date of, following behind day from which this term begins.

The term determined by the reference to event which shall come inevitably is estimated from the next day after approach of event or in other time after approach of the corresponding event.

If the end of term falls on non-working day, the first is considered after it the working day last afternoon of this term.

The last day of term comes to an end at the time of the termination of the working day in the Ministry, the central executive body, realizing the state customs policy or the Commissions.

Term is not considered passed if before its termination documents are submitted according to the Ministry, the central executive body, realizing the state customs policy, or the Commissions and are registered in accordance with the established procedure.

Section II Determination of Illegitimate and Legitimate Subsidy

Article 6. Determination of subsidy

1. For the purposes of this Law it is considered that the fact of provision of subsidy takes place if:

1) there is financial contribution of state bodies or support of budget receipts or support of the prices according to the provisions specified in appendices 1-4 and 7 to this Law is given in any form;

2) as a result of it the privilege is provided.

2. In the course of antisubsiditsionny investigation the facts of availability of financial contribution of state bodies are investigated and it is established:

Whether 1) the state body makes direct transfer of sums of money (in the form of donation, the grant, loan and participation in share capital, etc.) or whether undertakes the obligation about direct transfer of these amounts or monetary commitments (guarantee, etc.);

Whether 2) the state body refuses collection of taxes from the income which, as a rule, is subject to collection, or they are not levied (in case of establishment of tax benefits, in particular, of the tax deferral, etc.).

Release of transactions on commodity export from taxation, charges, etc. which are levied from similar goods if such intends for consumption in the domestic market of the country of export, or reduction of the amounts of these taxes and fees (obligatory payments), including customs duty, is not considered subsidy provided that such release or reduction is performed in accordance with the terms, provided in appendices 1-3 to this Law;

3) state body:

whether provides subjects of economic legal relations with property (including goods) or services, except intended for creation of general infrastructure or whether buys property (including goods);

4) state body:

whether takes part in financing of subjects of economic legal relations;

or whether charges to the non-state organization to perform one or more functions specified in Items 1-4 of part two of this Article which belong to powers of this state body;

or whether orders to the specified organization to perform such functions on conditions which actually do not differ from conditions on which these functions by state bodies are performed.

3. In case in the course of antisubsiditsionny investigation the rendering facts in any form of support of budget receipts or supports of the prices are investigated, it is established how specified forms are corresponded to the relevant provisions specified in appendices 1-4 and 7 to this Law.

Article 7. Principles of application of countervailing measures

If in the course of antisubsiditsionny investigation it is determined that the subsidy is specific, that is such which has the essential signs distinguishing legitimate subsidy from illegitimate subsidy countervailing measures are applied to import to Ukraine which uses privileges from illegitimate subsidy, as a rule.

Article 8. Illegitimate subsidies

1. The principles specified in this part are applied for the purpose of establishment whether the subsidy is specific to the company, industry or group of companies or industry cluster of the industry (further in this Section of the Law - certain companies) which are in limits of jurisdiction of the state body providing subsidy.

If:

1) the state body providing subsidy, or the legislation, on the basis of the who is acted by this body unambiguously provides access to subsidy only to the certain companies, such subsidy is considered specific, that is illegitimate;

2) the state body providing subsidy, or the legislation, on the basis of the who is acted by this body puts the right to use of subsidy and its amount into dependence on objective criteria or conditions, such subsidy is not considered specific under conditions that:

the right to use subsidy is obligatory;

the criteria stated above or conditions are steadily complied.

It is necessary to understand neutral criteria or conditions according to which benefits are not provided to certain companies at the expense of others and which are economically reasonable and same in application, in particular number of persons employed, the sizes of the company, etc. as objective criteria or conditions. These criteria or conditions shall be accurately formulated in legal or other regulatory legal acts so that there was opportunity to check them;

3) despite signs of lack of specificity in use of the general principles specified in Items 1 and 2 of this part, the weight of evidence suggests, that this subsidy is specific other factors can be taken into account, namely:

use of subsidies by limited number of certain companies;

preferential use of subsidies by certain companies;

provision of disproportionately considerable amounts of subsidies to certain companies;

method of implementation by the state body providing subsidy, discretional law in the decision on provision of subsidy.

In this case data on the frequency of variation or satisfaction of statements for subsidizing and the decision making bases on these questions are taken into account.

In case of application of Item 3 parts one of this Article are taken into account importance of diversification of economic activity in the field of powers of the state body providing subsidy, and also the period during which the subsidy is provided.

2. The subsidy to which only the certain companies located in geographically certain region within jurisdiction of the state body providing subsidy have access is specific.

3. Irrespective of the rules determined by parts one and the second this Article are considered as specific:

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