Ukraine cancels special duties on imported cars

"Upon review of these materials [provided by Economy Ministry on the need to abolish said duties] and in accordance with the provisions of the agreement on the rules and procedures of the WTO dispute settlement, the commission has found that Ukraine's national interests require the abolition of special duties concerning imports of cars into Ukraine regardless of country of origin and exports," the reports says.

Read alsoPresident comments on tax system in UkraineAs UNIAN reported earlier, on April 28, 2012 the Interdepartmental Commission on International Trade adopted a decision to impose special duties on imports of cars at a rate of 6.46% for cars with engine capacity between 1,000 cc and 1,500 cc, and 12.95% for cars with engine capacity between 1,500 cc and 2,200 cc. The decision was made public in March 2013, and the special duties were imposed for a period of three years.

On April 14, 2014, for cars with petrol engines with the volume of 1-1.5 liters, the special duty rate was set at 4.31%, since April 14, 2015 – it was twice smaller - 2.15%. For cars with petrol engines with the volume of 1.5-2.2 liters, the special duty rate was set at 8.63% since April 14, 2014, and on April 14, 2015 it was 4.32%.

Read alsoUkraine’s car manufacturing collapses by 83%On the background of the fall of the Ukrainian economy and reducing the Ukrainian auto market, the decision led to a significant reduction of car imports, resulting in Ukrainian auto importers demanding complete abolition of special duties.

In addition, the decision was challenged by Japan. On October 30, 2013 the Government of Japan submitted a request to the WTO for consultations with the Government of Ukraine on the validity of the special import duties on cars. According to the Japanese side, Ukraine did not have sufficient reason to introduce special duties as imports of cars was not critical and did not represent a serious threat to the Ukrainian auto industry. The European Union also criticized Ukraine's actions, calling the adopted measures inconsistent with the WTO obligations.