UKRAINE: Joining the WTO

Aleksandra (Sasha) Williams, Pitt Law '10, files from Kiev:

On May 16, 2008, Ukraine became the 152nd country member of the World Trade Organization. Although the general Kiev population seemed rather unimpressed by this event, especially in light of the impending mayoral elections and the associated campaign bedlam, the legal community met the news both cheerfully and cautiously. While the merriment can easily be explained by, at the very least, beating Russia to the punch, the weariness is well founded as well. It appears that the Verkhovna Rada of Ukraine did little besides adopting a Protocol ratifying the WTO Accession Agreement - the existing legal framework for customs duties remains a confusing mystery to everyone involved. There is some doubt whether the government officials fully understood what was being adopted: the Ukrainian WTO negotiations package consisting of over 1500 pages was translated from English into Ukrainian only two days before the ratification.

Although the pertinent tax regulations were annexed to the Protocol, they were never added to the effective Tax Code. The Customs Service decided to lower the customs duties for import of goods by the WTO members without waiting for the legislature. The Service reasoned that until the respective laws are adopted, customs will be governed by the Protocol. The Verhovna Rada considered this decision to be well outside of the Service's authority, but did not offer any practical solutions. Instead, it proposed lowering customs duties only for certain types of goods - a law which is at variance with the Protocol and the annexed Agreement.

In keeping with the common Ukrainian idiom "god loves trinity" (similar to "three is a charm" or "troubles always come in three"), the Customs Service got hit with two additional problems on May 16: its server crashed and its Chief quit. Valerij Khoroshkovskyy, Head of the Customs Service of Ukraine, must have had to submit an old-fashioned ink-on-paper letter of resignation on Friday as the Service was completely cut off from Internet and electronic network access. Again, in keeping with the common Ukrainian tradition, while government officials boisterously herald the impending economic paradise (whether it is due to WTO membership or some other matter), businessmen are left without any idea about how import transactions should be conducted.

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