Cancellation of 13% Import Tax

Most importers applauded Ukraine's entry into the World Trade Organization in May 2008, which resulted in a decrease of import duty (including the duty for the automobiles) from 25% to 10%. When the financial crisis hit Ukraine, however, the Parliament promptly introduced additional duty on imported goods in the amount of 13%. On February 20, 2009, President Yuschenko approved this "temporary surcharge" of 13% by signing the law "On Amending Certain Laws of Ukraine with the Aim of Improving the Balance of Payments in Connection with the Global Financial Crisis."

Suddenly, on 18 March, 2009, the Ukrainian government came to its senses and reversed its prior decision by cancelling the 13% import duty for all products (except refrigerators and automobiles). Apparently the Ministry of Economy is also working on a draft law to totally cancel the extra import duty imposed by the Law No. 923. Thus, if the Parliament approves this bill, the13% duty import will be cancelled for the cars and refrigerators in the near future.

In conclusion, it appears that Ukrainian leaders finally recognized (belatedly) that imposition of a 13% import duty contradicts the requirements of World Trade Organization, and actually took measures to adjust their laws accordingly. And that is a sign of progress.

By Tatiana Dzyadok, Esq.
Tatyana Dzyadok is an associate with the Kiev-based law firm of Frishberg & Partners (www.frishberg.com). Ms. Dzyadok can be reached at [e-mail]