Ukraine Retaliates by Imposing Import Duties on Russian Goods

What happened?

Ukraine will disallow a duty free regime regarding goods originating from Russia. Instead, Ukraine will continue to levy customs duties for importing any goods of Russian origin into the territory of Ukraine until 31 December 2017.¹

Import duties are kept at the rates fixed by the Customs Tariff of Ukraine.

Ukraine-Russia Free Trade Agreement

Both Russia and Ukraine are member states to the Free Trade Agreement between the Commonwealth of Independent States (the “CIS FTA”). The CIS FTA, among other things, provides for non-application of import duties in mutual trade between the CIS FTA member states.

As of 1 January 2016, Russia unilaterally suspended the application of CIS FTA with regard to Ukraine. In its turn, the Government of Ukraine introduced import duties on goods originating from Russia until 31 December 2016.

The decision to extend the application of import duties to Russian goods for one more year, until 2017, is yet another countermeasure taken by the Ukrainian Government against a number of restrictions imposed by Russia in relation to trade with Ukraine.

What this means for your business?

Companies whose business involves import of goods from Russia to Ukraine should be ready to pay import duties until the end of 2017. There is currently no information as to when a free trade regime between the two countries might be resumed.

We will keep you updated on any future developments in the matter.

¹Resolution of the Government of Ukraine "On Amendments to the Resolution of the Government of Ukraine No. 1146 dated 30 December 2015" No. 977 dated 21 December 2016, available in Ukrainian at: http://www.kmu.gov.ua/control/uk/cardnpd?docid=249614282

Additional notes

This LEGAL ALERT is issued to inform Baker McKenzie clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The comments above do not constitute legal or other advice and should not be regarded as a substitute for specific advice in individual cases.