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Ukrainian Court Ruled That the Decree Imposing Importation Restrictions on Coking Coal and Coke is Illegal

14.06.2013

Industrial Union of Donbass, major Ukrainian steel producer, challenged in the court through its subsidiaries (Public Joint Stock Company “Alchevsk Iron and Steel Works” and Public Joint Stock Company “Alchevsk By-Product Coke Plant”) the Decree of the Cabinet of Ministers of Ukraine of March 13, 2013, imposing importation restriction on coking coal and coke (the “2013 Decree”).

Ukrainian court of the first instance ruled against the 2013 Decree and cancelled the decree on June 10, 2013. However, the judgment of the Ukrainian court has not come into force yet. If the Cabinet of Ministers of Ukraine does not file an appeal, the judgement will come into force ten days after the Cabinet of Ministers of Ukraine receives the full text of the judgement.

During the court hearings Industrial Union of Donbass argued that in the process of preparation and approval of the 2013 Decree the Cabinet of Ministers of Ukraine violated numerous Ukrainian laws (Law “On Cabinet of Ministers of Ukraine”, Law “On Foreign Economic Activity”, Law “On Basics of State Regulatory Policy in Sphere of Business Activity”) and international treaties to which Ukraine is a party (General Agreement on Tariffs and Trade 1994 and Agreement on CIS Free Trade Zone).

Violation of General Agreement on Tariffs and Trade 1994 by Ukraine as a result of introduction of importation restriction on coking coal and coke in accordance with the 2013 Decree was considered at the meeting of the World Trade Organization Committee on Import Licensing (April 22, 2013) and the meeting of the World Trade Organization Committee on Market Access (May 7, 2013). At the meetings Ukraine argued that it introduced coking coal and coke import restrictions in order to protect human life and health against alleged threat of self-inflammation of overladen Ukrainian coking coal storages, which was the only legal argument of Ukraine used by the government to justify implementation of import restrictions under General Agreement on Tariffs and Trade 1994. Ukrainian government intends to unload Ukrainian coal storages by limiting access to foreign coal and thus forcing Ukrainian producers to buy Ukrainian coal. However, during the court hearings, initiated by the Industrial Union of Donbass, Ukrainian Government failed to provide any evidences substantiating the danger of self-inflammation of the storages of Ukrainian coal.

 

 
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