Recently Ukraine initiated two WTO disputes against Armenia and Kyrgyzstan over the anti-dumping measures applied by the Eurasian Economic Union member states against certain steel pipes originating in Ukraine. This news triggered vivid interest within expert circles since the Ukraine’s requests for consultation addressed to Armenia and Kyrgyzstan partially reflect Ukrainian claims in the WTO dispute against Kazakhstan (that was initiated in September 2017 and is still in consultations).
Ukrainian products are subjects to seven out of sixteen anti-dumping measures currently applied in the Eurasian Economic Union (EAEU). There are two measures that had been in force in Russia since before the Customs Union/ EAEU. The first example refers to the abovementioned and highly discussed anti-dumping measures concerning Ukrainian steel pipes. The other example deserving attention is a 26%-rate anti-dumping duty applied to Ukrainian forged steel rolls.
Background of the anti-dumping duty application against Ukrainian forged steel rolls
In May 2011, the Government of the Russian Federation issues the Regulation №406 on imposition of the anti-dumping duty at the rate of 26% on imports of forged steel rolls originating in Ukraine. The competent investigating authority was the Ministry of Industry and Trade of Russia (the Russian Ministry). In July 2011, following the integration process of Russia with Belarus and Kazakhstan, the Russian Ministry executed a fast-track review and unilaterally expanded the scope of application of the measures to the territory of all the member states of the Customs Union. Since December 2011, the anti-dumping duty were applied pursuant to decision of the Commission of Customs Union that de-facto based its decision on the Russian Ministry’s findings within the original investigation and the fast-track review.
Shortcomings of the fast-track review
In April 2013, a Ukrainian producer affected by the anti-dumping duty made an attempt to challenge the Decision of the Customs Union Commission in the Court of the Eurasian Economic Community. The Claimant insisted (with good reason, in our opinion) that the Customs Union Commission failed to duly execute a full anti-dumping investigation assessing likeness of products, material injury, causal link and end-users’ interests from perspective of the whole Customs Union market rather than Russian producers only. In other words, the Ukrainian producer insisted on the need in conducting a changed circumstance review of the anti-dumping measures due to the market enlargement factor.
The claim was dismissed however. The Court when dismissing the claim stated that international treaties concluded within the Customs Union prevailed over those concluded within the WTO as lex specialis. The Appeals Chamber of the Court upheld such finding.
Meanwhile, in February 2015, the Eurasian Economic Commission (EEC), following the sunset review proceeding, prolonged the application of the anti-dumping duties until 25 June 2019.
Outlook of the Ukrainian forged steel rolls at the WTO
Unlike, the anti-dumping measures against the Ukrainian steel pipes, there is little likelihood that the case of Ukrainian steel rolls will become an international trade dispute on short-term horizon. Nevertheless, in our view, the 2015 EEC’s decision has certain shortcomings that would offers legal basis to Ukraine for challenging this decision before the WTO panel (both on substantial and procedural matters).
As for the 2011 fast-track review that led to unilateral expansion of the anti-dumping duties to the territory of the Customs Union, this procedure, in our opinion, does not comply with Art. 11.3 of the WTO Anti-Dumping Agreement). However, the fast-track review took place before Russia and certain other EAEU member states acceded to the WTO, so it falls outside the WTO law scope of application.
However, following the Panel report in US -DRAMS (DS99), Ukraine still could challenge some matters of the original anti-dumping investigation executed by the Russian Ministry – to the extent that such matters were part of the analysis within the review performed by the EAEU investigating authority in 2014.
In any case, Ukrainian forged steel rolls producers are not warranted from the sunset review initiated at the EEC by the Russian producers interested in prolongation of the anti-dumping duty or even increase of the duty rate for the next five years.
Nataliia Isakhanova, Partner with Sergii Koziakov & Partners
Olesia Kryvetska, Senior Associate with Sergii Koziakov & Partners