One of the main trends in 2018-2019 is shifting the focus of the Ukrainian internal market’s protection policy from products with large volumes of imports or great added value to products with small import volumes.
Under these circumstances, domestic producers usually handle the matter on their own or with the assistance of Ukrainian trade law boutiques, while foreign industries with small import volumes consider the Ukrainian market insignificant.
Such attitude towards great import volumes industries and numerous procedural issues in conducting trade investigations have resulted in the loss of interest by foreign business in the Ukrainian market.
The above has also led to a rise in product prices on the domestic market, indicating an insufficient level of consideration in the interests of consumers.
The change in the internal market protection policy increased the number of trade investigations. Currently, government support is provided to domestic producers, which previously could not count on it due to small production volumes.
Among the means of trade defense, we also see the application by Ukraine of embargoes on separate types of products, as well as application of sanctions under the Law On Sanctions. Furthermore, special sanctions under the Law On Foreign Economic Activity, that were abolished in February 2019, are still relevant for those companies to which they were applied.
Today, legal counsels not only provide legal assistance, but also act as business consultants who understand the market situation and can represent the interests of the business in negotiations with government authorities.
There is also a tendency to challenge decisions on the application of trade remedies in court or at the WTO. Therefore, legal counsels also have to think a few steps ahead and start collecting all the necessary evidence during a trade investigation for use later in proceedings.
Currently in Ukraine three draft laws on trade remedies are under consideration by the Ukrainian Parliament: anti-dumping, countervailing, and safeguard laws. The draft bills are intended to update existing trade investigation procedures and implement progressive international experience. Among other things, the draft laws provide for increasing the importance of the national interests of consumers and clarification of the powers of the Interdepartmental Commission. The draft bills are expected to balance the position of all parties involved and have a positive effect on current practice.
Eugene BLINOV|Eterna Law
Commodities markets are continuing their trend of consolidation with the effect that the number of active traders continues to fall.
The soft commodities sector is being dominated by multinationals in terms of access to port infrastructure and transshipment facilities. Ukrainian traders and mid-market foreign trading companies have experienced certain hardships in keeping up with the volumes of shipments due to the volatility on the freight markets in the Azov and Black Seas. These trends, along with vibrant price volatility in markets, produced a substantial amount of legal work including the bread and butter for external counsel like commodity arbitrations. GAFTA has introduced important revisions to its arbitration rules and standard contracts intended to reflect the changing market situation and answering to historical challenges of the trade in soft commodities in the Black Sea area. FOSFA followed suit and adjusted its arbitration rules in terms of limitation periods and the number of arbitrators and arbitration costs.
Trends in the hard commodities sector were dispersed depending on the type of specific commodity. The crude oil and petroleum products markets maintained its stability. The coal market kept adapting to the net importer model. Following a string of disputes and political scandals over the import of coal into Ukraine the system appears to have settled and fewer disputes are anticipated. The market for metals and ores continues on a “business as usual” basis.
The exceptionally well-positioned international trade practice of Sayenko Kharenko is involved in the most sophisticated projects encompassing numerous anti-dumping and safeguard investigations both in Ukraine and abroad, WTO disputes, agency and franchising agreements, customs and product liability issues, sanctions and other matters. The team stands out as a result of its unique expertise in WTO dispute settlement proceedings, where it works alongside leading international law firms. The team rendered legal support in two WTO disputes on transit and on anti-dumping measures applied to imports of ammonium nitrate with origin in Russia. The recognized strength in trade defense proceedings is exemplified by a series of representations, to name a few: representing Adama Rus and Adama Manufacturing Poland S.A. in anti-dumping investigation related to imports into the customs territory of the Eurasian Economic Union of herbicides originating in the EU; representing Azovstal Iron and Steel Works, Ilyich Iron and Steel Works, Avdiivka Coke and Chemicals Plant, SMA INKOR & C, Zaporozhkoks (Group Metinvest) in the safeguard investigation related to imports into Ukraine of nitric acid notwithstanding the country of origin and export; representing the DF Group (Ostchem) companies in the course of interim review of anti-dumping measures applied to imports into Ukraine of some nitrate ammonium originating in the Russian Federation. The firm has an extensive track record in contractual matters, as well as in free trade agreements and sanctions. Recent work highlights also include acting as a legal counsel to Marks and Spencer Plc on new franchising arrangements for Ukraine; advising Industria Veneta Lavorazione Elettrodomestici S.p.A. on peculiarities in the application of agency agreements in Ukraine. After Dr. Tatyana Slipachuk joined Ukraine’s Central Electoral Commission, experienced partner Anzhela Makhinova took over the practice. Andrew Zablotskyi, counsel, has been active across sanctions advisory and regulatory aspects of trade in agricultural goods, as well as trade defense investigations.
Ilyashev & Partners rapidly expands the scope of its international trade practice, as it is extremely well-versed for trade investigations in Ukraine and abroad, and handling export control and market access, free trade regimes, WTO regulations. In 2018 the firm demonstrated an extensive portfolio of anti-dumping and safeguard investigations and reviews. Selected highlights include successful defense in the EU of Zaporozhye Ferroalloy Plant and the Ukrainian Association of Producers of Ferro-alloys and other Electrometallurgy Products in an anti-dumping investigation related to imports of ferro-silicon originating in Egypt and Ukraine; representing Swisspan Group in an anti-dumping investigation related to imports into Ukraine of certain urea-formaldehyde from Russia. Among significant ongoing representations is acting for CRH Ukraine, Dyckerhoff Ukraine, HeidelbergCement Ukraine and PJSC Ivano-Frankivskcement in initiated anti-dumping investigation related to imports into Ukraine of cement from Russia, Belarus and Moldova, respectively. Another area of recent growth is international and domestic sanctions advice, where the firm acted for a range of industrial and agrarian clients. Practice head Olena Omelchenko has been promoted to partner. Ivan Bozhko, Yevgenia Makarenko, Oleksiy Gorbatiuk are the key members of her practice team.
Asters continued to expand its market position with high-profile anti-dumping and safeguard investigations. In the recent portfolio of the firm there is acting for China Iron and Steel Association (CISA) and leading Chinese producers and exporters of corrosion-resistant steels in an anti-dumping investigation against imports into Ukraine of corrosion-resistant steels originating from the People’s Republic of China; representing the Association of Market Operators of Medical Devices and leading Ukrainian importers, Chinese and Turkish producers and exporters of medical devices in the anti-dumping investigation against imports of syringes from India, Turkey and China. The team is led by Alexey Pustovit, partner, and recently promoted counsel Dmytro Vidsota. The international trade practice was significantly strengthened with the past year merger with Egorov Puginsky Afanasiev & Partners Ukraine. The team of Gleb Bialyi and Anton Sintsov is referred for consistent expertise in trade remedies, and represented Avgust Crop Protection in anti-dumping investigation against imports of herbicides originating from the EU into the Eurasian Economic Union. This team is known for being a legal counsel to EuroChem Group in a series of court disputes, among others disputes with the Interdepartmental Commission on International Trade, Ukrainian Ministry of Economic Development and Trade and Ostchem regarding anti-dumping duties imposed on imports of carbamide and carbamide-ammonia mixture from Russia, and their further increase; as well as in court proceedings against the Ukrainian Government over an embargo imposed on a client’s goods which originated as import from Russia.
Given its previous involvement in trade remedies projects, Attorneys’ Association Gestors is known on the market. The firm cooperated with Baker McKenzie in assisting ArcelorMittal Kryvyi Rih with an anti-dumping investigation on the import of reinforcing steel bars and wire rod from the Russian Federation. Yaroslav Snigur is the key practitioner.
Baker McKenzie has a strong practice in the area of global trade controls, including export controls and economic sanctions, the WTO and market defense remedies, commercial agreements and public procurement regulations. The firm has received global recognition for structuring contractual arrangements in cross-border trade for big multinational clients. The team’s strength is sanctions compliance. Over the last couple of years the Kyiv team has increased its involvement in internal trade investigations. Hanna Shtepa, counsel, leads the practice team including Nadiia Filozop, Maksym Hlotov and Ganna Smyrnova.
The long-established domestic law firm Sergii Koziakov & Partners provides legal advice on trade remedies, contractual arrangement, WTO law, sanctions. The firm represented Shanghai Prime Machinery Co Ltd in a procedure to cancel special sanctions in the area of international trade; and advised Kazahdorstroy on the matter of tariff and non-tariff regulation in connection with the import of certain types of equipment. Other selected clients include Opel Southeast Europe, Lenovo Group, Maryanivsky Glass Factory, UkrEco-Khlib. Nataliia Isakhanova is the lead partner.
After the merger of AVELLUM and AGA Partners in July 2018 the international trade practice received impetus for further development, bringing together unrivalled expertise of both teams in multimillion transactions and the largest track record of commodity arbitrations among Ukrainian law firms. The amalgamated team is instructed by the largest Ukrainian agrarian holdings in commodity arbitrations in London, guiding clients in GAFTA, FOSFA and LMAA cases. Most recently the practice team represented Agroprosperis and was successful in the first tier and an appellate decision in FOSFA Arbitration awarding USD 10.5 million in damages with respect to non-acceptance of soybeans by buyers due to prohibition of import on the territory of Russia. Another highlight is representation of UkrLandFarming and its Swiss subsidiary, Trade Agro Union, in a dispute that arose due to a cargo quality claim and alleged guarantee obligation of a parent company on behalf of its subsidiary. The team is involved in drafting the new and unique GAFTA standard proforma trade contract for Ukraine, which is aimed at facilitating dispute resolution in the Black Sea region. The firm is also often involved in advising domestic and international clients on tax and customs matters related to their operations. The three-partner practice team consists of Iryna Moroz, Ivan Kasynyuk and Aminat Suleymanova.
As a proficient legal counsel on disputes in commodities sector, ARBITRADE focuses on structuring of transactions and drafting corresponding agreements. In 2018 the team saw a rise in the number of cases related to pre-arbitral settlement of disputes subject to GAFTA and FOSFA rules, many of which were settled amicably. The firm is known for successful representation of commodities traders in arbitration. The client portfolio includes sound names, to name a few: Astarta Group, Harvest Group, Oleos Trading Limited, Bunge and others. The practice is led by Andriy Shulga, while Pavlo Trytenichenko is involved in the most complex projects often with parallel litigation proceedings. Anastasia Grenuyk is a talented executive.
Interlegal, an Odesa-based law firm with a focus on maritime law, has a very well-versed practice of commercial disputes arising out of trade contracts, transportation and violation of terms of trade, including freight and debt recovery. This past year the firm acted for international grain traders on trade contracts and contentious matters. Artem Skorobogatov and Natalya Myroshnychenko are lead partners, while Andrey Perepelitsa is another visible practitioner.
Eterna Law has an extensive portfolio of commodities arbitration cases, being traditionally a vivid counsel on GAFTA and FOSFA arbitrations. Its legacy of agrarian clients includes both producers and traders. Eugene Blinov, the firm’s partner is known primarily for lengthy experience in this specific arbitration niche.
INTEGRITES utilizes an offering of commodities, contractual matters and trade remedies. The trade and commodities practice is noted for handling commodity disputes and contractual matters for high-caliber clients. The team possesses expertise across a full-spectrum of commodities, including grain and metals. Since London-based partner Ivanna Dorichenko left the firm, international arbitration partner Olena Perepelynska has taken over guidance in commodities. Launched with the hire of Serhiy Lakhno this past year, the practice of trade remedy investigations added several ongoing representations to its profile. Advisory on commercial contracts is led by recently promoted tax partner Viktoriya Fomenko. The practice team also acts on customs law issues and handles representation in customs disputes.
One of the notable legal counsels in the maritime sector, Odesa-based law firm Legrant, acts in international trade projects. The firm has a sharp dispute focus and managed to grow its arbitration expertise over the past year. For example, the firm represented Vin-Orient LP, a large foreign agro trader in GAFTA arbitration; protected the interests of Maxgrain International Limited in a dispute on the purchase and sale of agricultural products and prompted compensation of damages. Tatyana Titarenko is the main figure.
AEQUO is primarily known for its commercial and distribution practice, most recently actively enhancing its involvement in the area of trade remedies. The firm represents the interests of two leading Chinese steel mills and two of the biggest Chinese steel traders in anti-dumping investigations against imports of rolled steel with corrosion-resistant coating originating from China. The practice team maintains a consistent workflow of assignments on export and import regulations, customs, product safety, technical regulations. AEQUO advised one of the biggest global suppliers of plant protection products, Adama Ukraine, on various customs, regulatory and trade issues and developed new trade scheme for supply of pesticides; advised Komatsu, a worldwide leader in production and distribution of specialized mining equipment, on distribution scheme in Ukraine; developed distribution scheme for official HP/Kodak distributor in Ukraine. Corporate and M&A partner Anna Babych manages commercial and distribution practice. Denis Lysenko, managing partner, handles general supervision of trade projects. Senior associate Oleksandr Tereshchenko is a core practitioner.
Gramatskiy & Partners draws on extensive experience in structuring cross-border trade deals, including soft and hard commodities, industrial goods and services. The firm advises on export control and currency regulation, technical barriers to trade, customs clearance, logistics and transportation, transit. In 2018 the firm was regularly instructed for structuring commodities transactions, and representation in customs disputes. Another area of recent growth is support of export of IT development and support services. The key markets for structuring export contracts include China, India, Pakistan and the United Arab Emirates. Andrii Trembich is responsible for this practice in the firm.
Jurline, an Odesa-based law firm with vivid entry to big regional clients, renders legal support on international transactions, customs issues, and wide range of contract law matters. Notable established clients include PJSC Odesawinprom (TM Frantsuzky Boulevard), TIS-Grain Ltd, TIS-Mindobryva, GM AGRO DSCC. The team includes partners Volodymyr Zubar, Vitaliy Cherkes and Maxim Kapelis.
Ukrainian law firm Jurvneshservice is focused primarily on contractual arrangements within international trade activity. The firm regularly advises clients on supply, distribution, agency contracts, product liability, financial settlement and customs regulation. Gennadii Tsirat and Kateryna Tsirat advised Ukr-Kor Trade, a Ukrainian importer of cosmetic products, and Asian Beauty on negotiations of a sale contract.