Temporal increase in ferrous metal export duty

Europeiska Pravda (European Truth) published an article by associate Olesia Kryvetska on the Draft Law №3868 that provides for temporal increase in export duty on ferrous scrap metal from €10/ton to €30/ton for a period of 1 year. The Draft law had been adopted on July 12, 2016 with consideration of proposals made by the President of Ukraine.

According to Olesia Kryvetska, this measure breaches international commitments of Ukraine. Pursuant to its WTO Accession Protocol, Ukraine had to gradually reduce export duties on certain products, including ferrous scrap metal. Moreover, the measure violates Article 31.1 of the EU-Ukraine DCFTA, that prevents the Parties from introducing any export duties or other measures having an equivalent effect.

The author considers €10/ton for scrap metal to be quite a low export duty rate from domestic interest perspective of Ukraine. The only way to change this level without Ukraine’s WTO commitment being violated – is to make appropriate amendments to the WTO Accession Protocol. It is hardly possible however. At the end of the day, the increased export duty on scrap metal can negatively affect Ukraine’s image at the WTO and count against the state.

Full text of the article in Ukrainian is available at the link: http://www.eurointegration.com.ua/experts/2016/07/14/7052058/.