Ukrainian President vetoed bill increasing scrap exports

Ukrainian President vetoed bill increasing scrap exportsUkrainian President Petro Poroshenko has vetoed a bill amending Article 13 of the law on foreign economic activities to curb the shortage of scrap ferrous metal on the domestic market and returned it to parliament with his proposals, the press service of the head of state has reported.

The bill passed by the Verkhovna Rada on April 21, says that the exports duty of scrap ferrous metal is temporarily, for three years, increased from current EUR 10 per tonne to EUR 30 per tonne.

Poroshenko said that he took into consideration of the proposals of Ukraine's Cabinet of Ministers as it organizes and provides for the implementation of foreign economic activities of Ukraine, customs affairs as it is prescribed in the Constitution of Ukraine.

He said that the increase of exports duty on scrap ferrous metal does not meet the provisions of the Ukraine-EU Association Agreement ratified on September 16, 2014.

The Agreement envisages liabilities of the parties not to introduce or not to leave in effect any duties, taxes or other equivalent measures imposed on exports of goods. Existing duties or equivalent measures applied in Ukraine are to be gradually annulled during the transition period in line with the schedule attached to the Agreement. If amendments are made to Ukrainian customs laws, liabilities taken in line with the schedule stay in effect.

The General Agreement on Tariff and Trade (GATT) allows any party to temporarily set and apply bans or restrictions of exports to warn or relax the critical shortage of goods that are of great importance for the exporting country. Nothing in this agreement should be interpreted as obstacle for any party in taking any steps the country believes necessary to safeguard the interests of its security. The restrictive measures cannot apply in the way that means the hidden restriction of international trade.

The president said that thus, the application of the increased exports duty on scarp ferrous metal for three years cannot be backed.

The president said that the situation with scrap metal should be taken from the point of the temporarily occupation of Crimea and some areas of Donetsk and Luhansk regions. The increase of scrap ferrous metal and the fall in scrap metal production results in the sharp fall of ferrous metal stocks and the shortage of scrap metal in the country, especially in the past two years. These stocks have a strategic important for the Ukrainian metal sector, the president said.

Read also: Ukrainian parlament passed law increasing scrap exports duty

The president proposed that the title of the law is adopted in new wording: amending some Ukrainian laws regarding the reduction of scrap ferrous metal shortage on the domestic market. Article 13 of the law on foreign economic activities is expanded with the new provisions, according to which exports transactions with scrap metal are carried our in line with the law, taking into account the specifics spelled out in the law on scrap metal and the law on the exports duty on scrap ferrous metal.

Poroshenko proposed that the exports duty on scrap ferrous metal is temporarily set at EUR 30 per tonne for on calendar year.
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