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Cablegate: Ukraine Takes Backward Step On Ag Import Rules

VZCZCXRO2198
PP RUEHBI
DE RUEHKV #0950/01 1101413
ZNR UUUUU ZZH
P 201413Z APR 07
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 2067
INFO RUEHRC/DEPT OF AGRICULTURE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHGV/USMISSION GENEVA 0067
RUEHBI/AMCONSUL MUMBAI 0024

UNCLAS SECTION 01 OF 02 KYIV 000950

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTA
STATE PLEASE PASS TO USTR FOR KLEIN/MOLNAR/OWEN
USDOC FOR 4201/DOC/ITA/MAC/BISNIS
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYCK
GENEVA FOR USTR
MUMBAI FOR WKLEIN

E.O.: 12958: N/A
TAGS: ETRD WTRO ECON PGOV UP
SUBJECT: UKRAINE TAKES BACKWARD STEP ON AG IMPORT RULES

REF: A. KYIV 897
B. KYIV 790

1. (SBU) Summary: Ukraine's Rada (parliament) passed a law
on April 10 reinstating mandatory certification of all
imported agricultural products. Should it enter into
force, this measure would undo progress made last November
and damage ongoing efforts to resolve problems with U.S.
meat imports. Ukraine's WTO negotiating team actively
opposes promulgation of this law. It is not clear if/when
the bill will enter into force given the ongoing political
crisis, and President Yushchenko's position thus far that
the Rada's legislative actions have no validity in the wake
of his April 2 dismissal decree. Post is pushing at the
highest levels of government, noting that the measure is
inconsistent with Ukraine's aspirations to join the WTO and
advocating that the GOU not let it enter into force. End
Summary.

Rump Rada Approves Draft Law on Certification of Ag Imports
------------------------ ----------------------------------

2. (U) On April 10 Ukraine's Rada (parliament) passed a
draft law, registered as number 2896, and entitled "On
Amending Laws of Ukraine Concerning the Quality of Imported
Food Products." The measure would reinstate mandatory
certification for all imported agricultural products
(except raw materials used in the manufacture of goods
already subject to mandatory certification). This measure,
should it go into effect, would repeal a key aspect of last
November's amendment to the Law on Veterinary Medicine, one
of the WTO-required bills, that was meant to eliminate a
barrier to imports. According to a local WTO expert, the
new law would result in an almost quadrupling of the number
of goods subject to mandatory certification.

3. (U) The Rada approved the draft in a single day, voting
in both the first and second reading simultaneously. The
vote was 243 for, 0 against, with 12 abstentions, winning
nearly unanimous support from the ruling coalition; the
opposition was almost entirely absent from the Rada.

Political Background
--------------------

4. (SBU) President Yushchenko on April 2 issued a decree
dissolving the Rada immediately and calling for new
elections. The majority coalition has refused to accept
the decree and the Rada has continued to operate, but
without the participation of the opposition. Yushchenko
does not consider the Rada legitimate, and has refused to
recognize any of the laws passed by the Rada since April 2.
The legal status of such laws remains unclear. According
to the Constitution and Rada rules, if the President fails
to veto or sign a bill within 15 days of passage, the Rada
should promulgate the bill, at which point it becomes law
(i.e., there is no "pocket veto"). However, a coalition MP
and a member of the Rada's Secretariat told us that the
Rada may decide not to promulgate any laws without
Yushchenko's signature (refs A and B).

Vote is a Step Backward
-----------------------

5. (SBU) This bill runs counter to Ukraine's pledge to its
WTO Working Party to reduce the number of goods subject to
mandatory certification. It also appears to be a major
violation of the WTO TBT Agreement, as it subjects all
agricultural goods to mandatory certification, rather than
listing goods for certification individually.

6. (SBU) The Rada vote came as the GOU was attempting to
resolve problems with U.S. meat imports, caused by the
State Standards Committee's insistence that importers
continue to receive a certificate from them, even though
the Ukrainian Veterinary Service had finally agreed to
recognize U.S. certificates. Indeed, the November
amendment to the Law on Veterinary Medicine removed the
requirement for the State Standards Committee to duplicate
the function of the Veterinary Service by issuing separate
certificates. Post recently complained to the Ministry of
Economy, providing examples of how importers were

KYIV 00000950 002 OF 002


nonetheless still facing requirements from customs
officials for both types of certification. Our GOU
counterparts recognized this was a problem and agreed to
fix it, noting the hitch appeared to be that implementing
regulations for the new law are not yet complete.
(Comment: Issuing separate certificates benefits the State
Standards Committee financially thanks to costly additional
testing. The State Standards Committee therefore opposed
the November WTO amendment and is likely behind this latest
law. End Comment.)

WTO Team Opposed Bill, Seeking Veto
-----------------------------------

7. (SBU) Zhanna Pastovenska, from the Ministry of Economy's
WTO Department, admitted to Econoff on April 16 that the
new law would be problematic for WTO accession. She said
that the Ministry of Economy had formally opposed the bill,
which had been introduced in January by a group of MPs but
which initially did not move forward. Pastovenska promised
Ukraine's WTO team would request that President Viktor
Yushchenko veto the bill.

8. (SBU) A complicating factor is that, given President
Yushchenko's position on the Rada's illegitimacy, he is
unlikely to veto this particular bill. The legal status of
this WTO-related law, therefore, is uncertain. The
Constitutional Court is currently hearing the petition on
Yushchenko's decree; a decision could shed light on the
validity of legislation passed in April.

Comment: Need to Push Back
--------------------------

9. (SBU) The quick Rada vote caught most observers,
including apparently Ukraine's WTO negotiating team, by
surprise. This law is unquestionably a step backward for
Ukraine's accession. The vote by members of the ruling
coalition is inconsistent with the Yanukovych government's
pledge to pursue accession at the earliest possible date.
We are already raising the matter at the highest levels of
the GOU to alert the GOU to the WTO implications and to
prevent this bill from becoming law. The Ambassador has
sent letters to the President, Prime Minister, Minister of
Foreign Affairs, and Minister of Economy urging that this
measure not become law or that it be promptly repealed.

TAYLOR

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