Ukraine: Agricultural News Digest. June – August 2016

Last Updated: 1 September 2016
Article by Sayenko Kharenko

Most Read Contributor in Ukraine, October 2017

INTERNATIONAL TRADE

UKRAINE SIGNED A FREE TRADE AGREEMENT WITH CANADA

On 11 July 2016, the First Vice Prime Minister of Ukraine Stepan Kubiv and the Minister of International Trade of Canada Chrystia Freeland signed the Canada-Ukraine Free Trade Agreement (the "CUFTA").

The CUFTA shall open up 98 per cent of the Canadian market for the Ukrainian goods. In particular, the import duties will be eliminated with regard to the following goods: (1) all agricultural goods, excluding 108 tariff lines, and (2) all industrial goods, except for passenger cars.

The groups of products not benefiting from the amended import duties are subject to tariff reductions over the transition period of seven years. Besides that, the agricultural goods falling within the mentioned above 108 tariff lines can be exported within the amount of a duty-free tariff quota.

Ukraine, in its turn, shall revoke customs tariffs on 80 per cent of Canadian goods with subsequent tariff elimination for the remaining portion of the products on a three-stages basis – over the periods of 3, 5 and 7 years. In addition, some Canadian products will also benefit from the duty-free tariff quotas and some of them are phased out of the CUFTA.

According to the Ministry of Agrarian Policy and Food of Ukraine, the state has already increased the import of Canadian beef and pork. The export of Canadian grains has increased by 19,4% in four months 2016.1

RESTRICTIONS ON TRANSIT OF THE UKRAINIAN GOODS THROUGH THE TERRITORY OF THE RUSSIAN FEDERATION TO THE REPUBLIC OF KASAHSTAN, KYRGYZ REPUBLIC AND OTHER COUNTRIES

The Presidential Decree No.319 dated 1 July 2016 introduced additional restrictions on transit of the Ukrainian goods through the territory of the Russian Federation. 2 The restrictions will remain in force from 1 July 2016 to 31 December 2017.

The Decree provides for:

  • the restrictions on the transit of the goods originating in Ukraine to the Kyrgyz Republic through the territory of the Russian Federation;
  • temporary ban on road and railway transportation of goods, (1) which are subject to the import duties in the Russian Federation other than "zero rate", and (2) which fall under the so called "food embargo"3; in other words, the restrictions apply to all the Ukrainian goods.

These changes can cause temporary suspension of transit of the Ukrainian goods through the territory of the Russian Federation, not only to the Republic of Kazakhstan, Kyrgyz Republic, but also to the third countries.4 Already on 13 July the 73 railway wagons, travelling to Kazakhstan and Kyrgyz Republic were stopped at the border of Ukraine and the Russian Federation.5

THE USE OF TARIFF QUOTAS ON GRAIN EXPORTS TO THE EU

At the end of July 2016 the Ukrainian exporters used 79,3% of the tariff quota for duty-free export of barley. At the same time, as of the beginning of July, only one third of the quota was used. The total amount of the tariff quota for barley constitutes 250 thousand tons.

Moreover, as of the end of May the quota for wheat (in the total amount of 950 thousand tons), barley oat and flour (total 6,3 thousand tons), malt and wheat gluten (in the total amount 7 thousand tons) was used in full.

The tariff quotas for cuts, waste and residues (in the total amount of 17 thousand tons) and grains processed products (total 2 thousand tons) have not been used in full.6

LEGISLATION IN THE AGRICULTIRAL SECTOR

PROJECT "UKRAINE AGRI-FOOD APPEX LOAN"

In July, the Parliament of Ukraine registered a Draft Law on ratification of the agreement with the European Investment Bank (the "EIB") on the credit line in the amount of EUR 400 million: the Draft Law No.0106 on ratification of the Financial Agreement (Project "Ukraine Agri-Food Appex Loan") between Ukraine and the European Investment Bank.7

The Financial Agreement between Ukraine and the EIB was executed on 28 December 2015. According to the Financial Agreement, Ukraine, represented by the Ministry of Finance of Ukraine, is a borrower of the funds. The Ministry of Finance of Ukraine will jointly with the Ministry of Agrarian Policy and Food of Ukraine and the PJSC "Ukreximbank" select the projects and monitor their practical implementation. The term of the loan shall be 12 years with the 4-year preferential period.8 The funds received from the EIB loan will be used for the development of the infrastructure projects, logistics, and improvement of the conditions of the dehydration and processing of the products of the agricultural households. The funds will be also used for the development of the small and middle business in Ukraine.9

PARLIAMENT OF UKRAINE IS TO CONSIDER A NUMBER OF THE DRAFT LAWS ON THE IMPROVEMENT OF LAND LEGISLATION

The Parliament of Ukraine will consider a number of draft laws devoted to the improvement of the land legislation and harmonisation of the Ukrainian laws with the EU rules.

The first reading:

  • Draft Law No.3190 "On Amendments to Certain Legislative Acts regarding Lifting of the Artificial Limitations on the Right to Privatisation and Receipt for Use of the Land Plots";10
  • Draft Law No. 2842 "On Amendments to Certain Legislative Acts of Ukraine regarding Elimination of the Inconsistencies in the Field of Licensing";11
  • Draft Law No. 3866 "On Amendments to Certain Legislative Acts of Ukraine on Fair Division of Lands in the Course of the Privatisation Process of the State Entities, Enterprises and Organisations";12
  • Draft Law No. 3157 "On Amendments to Certain Legislative Acts of Ukraine on Clarification of the Procedure for Transfer of the Water Objects in the Complex with the Land Plots for Lease ";13
  • Draft Law No. 4573 "On Amendments to Certain Legislation Acts of Ukraine on the Use of the Improved Lands and Land-Improvement Systems".14

Second reading:

  • Draft Law No.2150а "On Amendments to the Law of Ukraine "On Animal By-products" (on harmonization of its provisions in the field of treatment of the products of animal origin, which belong to the category II, with the requirements of the EU legislation)";15
  • Draft Law No.3006 "On Amendments to the Land Code of Ukraine and Other Legislative Acts regarding the Legal Fate of Land Lots, Whose Owners Have Deceased";16
  • Draft Law No.2920 "On Amendments to Certain Legislative Acts of Ukraine on Fixing of the Minimal Term of Lease of Land Plots of Agricultural Designation, at which the Hydraulic Melioration is Being Conducted".17

The Committee on the Matters of Agrarian Policy and Land Relations recommends all the aforementioned projects for consideration of the Parliament. All of them were included into the agenda of the Parliament in July, but have not been considered yet.

PROPOSAL ON GMO BAN IN UKRAINE UNTIL 2023

In July 2016, the Draft Law No.4968 regarding the introduction of moratorium on cultivation of genetically modified agricultural plants, production, processing, circulation, transit and import of GMO, capable of self-reproduction or transmission of hereditary factors, has been registered by the Parliament of Ukraine.18

The Draft Law provides for ban on industrial production, introduction into circulation of GMO and of products, produced with use of GMO, prior to their state registration, as well as ban on import into the customs territory of Ukraine of GMO and products produced with use of GMO, prior to their state registration.

The Draft Law also provides for administrative liability for violation of the respective requirements. It is proposed to set the duration term of the moratorium for at least 5 years from the date of the Law's entry into force (until 1 January 2023). The Draft Law also provides for the transition period of 1 year for entry into force of the moratorium.

OTHER NEWS

NEW RECORD ON GRAIN EXPORT SET

Ukraine has exceeded the previous year's grain export rate by almost 5 million tons.

According to the Ministry of Agrarian Policy and Food of Ukraine, the volumes of grain crops export within 2015/2016 marketing period amounted to 39415 thousand tons. In particular, the export was as follows:

  • wheat – 17354 thousand tons;
  • corn – 17396 thousand tons;
  • barley – 4409 thousand tons;
  • other grain crops – 256 thousand tons.19

GRAIN STORAGE FACILITIES ARE NOT SUBJECT TO REAL ESTATE TAX

Buildings of agricultural purpose such as grain storage facilities are not subject to real estate tax. Such clarification was provided in the Letter No.17901/6/99-9912-02-03-15 issued by the State Fiscal Service of Ukraine as of 17 August 2016 upon request from the American Chamber of Commerce in Ukraine.20

By eliminating an ambiguity on the matter, it allows companies operating in the agricultural sector to reduce their expenses on building maintenance and therefore leads to further improvement on business environment in Ukraine.

PROCEDURE OF MAINTAINING THE REGISTER OF ORGANIC PRODUCTS PRODUCERS APPROVED

The Cabinet of Ministers of Ukraine approved the procedure of maintaining the register of organic products producers. 21 The information database would make it possible to obtain information on: (1) all organic products producers; (2) conformity assessment of production process and availability of a certificate on these products. The register will be placed on the website of the State Food Safety and Consumer Protection Service. Access to the register will be free.22

REGISTER OF COMMERCIAL FISHING OBJECTS LAUNCHED

On 7 June 2016, the State Fishery Agency of Ukraine presented the newly established Register of commercial fishing objects and parts thereof. The Register constitutes the unified electronic database, which contains the information on all Ukraine's basins, which are suitable for commercial fishing activity or fish farming. In particular, the Register contains indications of title and location of a water object, its registration number, designated use, title of the user (lessee) of water object; the principal objects of commercial fishing activity (species of fish), water object or land lot lease agreement term.23

EXTENSION OF "AGRARIAN RECEIPTS" PROJECT

According to arrangements between the Ministry of Agrarian Policy and Food of Ukraine and the International Finance Corporation (IFC), the "Agrarian Receipts" project will be extended to four more regions of Ukraine – Ternopil region, Sumy region, Mykolaiv region and Khmelnytskyi region.24

GOVERNMENT HAS DEVELOPED THE CONCEPT OF THE NUT INDUSTRY DEVELOPMENT

The Ministry of Agrarian Policy and Food of Ukraine jointly with the Ukrainian Nut Association developed the concept of nut industry development in Ukraine. According to the document, in 2025 Ukraine plans to increase the area of industrial nut orchards to 25 thousand hectares and to plant shelterbelts of the nut plants on the total area of 10 thousand hectares. It is also noted that the special fund of the industry to be formed by means of 2 per cent levy of the value of the nuts exports, derived products and the wood may be an important source of investment. 25

Footnotes

1 http://minagro.gov.ua/uk/node/21766

2 Указ Президента Российской Федерации от 01.07.2016 № 319 "О внесении изменений в Указ Президента Российской Федерации от 1 января 2016 г. № 1 "О мерах по обеспечению экономической безопасности и национальных интересов Российской Федерации при осуществлении международных транзитных перевозок грузов с территории Украины на территорию Республики Казахстан через территорию Российской Федерации" http://publication.pravo.gov.ru/Document/View/0001201607030001

3 Указ Президента Российской Федерации от 06.08.2014 № 560 "О применении отдельных специальных экономических мер в целях обеспечения безопасности Российской Федерации". http://publication.pravo.gov.ru/Document/View/0001201408060033

4 http://www.me.gov.ua/News/Detail?lang=uk-UA&id=8d781a0f-c152-46c3-9715-2e6d427c41fe&title=InformatsiiaSchodoUskladnenniaTranzituUkrainskikhTovarivCherezTeritoriiuRosiiskoiFederatsiiDoRespublikiKazakhstanu-KirgizkoiRespublikiTaInshikhKrain

5 http://biz.liga.net/ekonomika/transport/novosti/3432735-rf-blokiruet-sotnyu-tranzitnykh-vagonov-i-fur-iz-ukrainy.htm

6 http://ec.europa.eu/taxation_customs/dds2/taric/quota_consultation.jsp?Lang=en&Country=UA&Year1=2016&Expand=true&Code=094306

7 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=59853

8 http://www.minfin.gov.ua/news/view/ukraina-zaluchyla-kredyt-ievropeiskoho-investytsiinoho-banku-u-rozmiri--mln-ievro-na-pidtrymku-ahrosektoru?category=mizhnarodne-spivrobitnictvo

9 http://minagro.gov.ua/uk/node/21907

10 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=56640

11 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=55117

12 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=58018

13 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=56566

14 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=58958

15 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=55696

16 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=56342

17 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=55263

18 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=59703

19 http://minagro.gov.ua/uk/node/21709

20 http://old.chamber.ua/files/documents/updoc/15/SFS_Response.pdf

21 http://minagro.gov.ua/node/18855

22 http://minagro.gov.ua/uk/node/22006

23 http://minagro.gov.ua/uk/node/21544

24 http://minagro.gov.ua/uk/node/21696

25 http://ukrprod.dp.ua/2016/06/15/ukraina-pravitelstvo-razrabotalo-koncepciyu-razvitiya-orexovoj-otrasli-2.html

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.