Draft Law of Ukraine

"On Amendment of the Law of Ukraine "On Foreign Economic Activity"

This draft provides for alteration of the procedure of licensing of foreign economic activity by way of determination of automatic and non-automatic licensing.

Automatic licensing envisages granting permissions to the subjects of foreign economic activity to authorize export (import) of goods during a certain period provided such exports (imports) are not covered by established quotas (quantitative or other restrictions).

Non-automatic licensing provides for granting permissions to subjects of foreign economic activity to authorize export (import) of goods during a certain period provided such exports (imports) are covered by established quotas (quantitative or other restrictions).

This draft determines when exported and some imported goods are subject to licensing. In particular, licensing shall apply to exports if there is a substantial imbalance of certain goods in domestic market, or there is a need to ensure protection of health and life of people and animals, or to apply safeguard measures to protect national producer etc.

Licensing with regard to imported goods may be introduced if the situation in payment balance and repayment of the national debt drastically changes for worse, or there arises the need to ensure protection of life and health for people and animals, environment, or the need to apply safeguard measure to protect national producers, or the need to protect patents, trademarks and copyrights etc.

Application of licensing regime to exports (imports), including introduction of quotas shall be effected by the Cabinet of Ministers of Ukraine.

The main goal to adopt this draft law is to harmonize Ukrainian legislation with requirements of the General Agreement on Tariffs and Trade (GATT) in order to expedite the process of Ukraine’s accession to WTO. The draft law is aimed at adapting the national legislation on licensing export-import transactions to requirements of agreements within GATT framework. One of such Agreements is the Agreement on the Import Licensing Procedures (hereinafter - Agreement).

The principal WTO’s requirement to its countries-members and to countries wishing to accede this organization is application of imports licensing procedures, in particular non-automatic licensing on transparent and predictable basis in conformity with clearly defined rules and procedures.

The procedure envisaged in the draft law for both automatic and non-automatic imports licensing complies with the requirements of the Agreement and this allows to fulfill, if this draft is passed, obligations undertaken by Ukraine in this area and to move the country closer to full WTO membership.