VZCZCXRO4439
OO RUEHLN RUEHVK RUEHYG
DE RUEHKV #1202 1721552
ZNR UUUUU ZZH
O 201552Z JUN 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5881
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 0130
RUCNCIS/CIS COLLECTIVE

UNCLAS KYIV 001202 
 
SIPDIS 
 
STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTA 
STATE PLEASE PASS TO USTR FOR CKLEIN, PBURKHEAD, EPORTER 
USDOC FOR 4201/DOC/ITA/MAC/BISNIS 
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYK 
USDA FOR FAS/ONA (KRAMOS, AMANNIX, MSALLYARDS) 
USDA FOR FAS/OCRA (JFLEMINGS) 
GENEVA FOR USTR 
 
E.O.: 12958: N/A 
TAGS: ETRD WTRO PGOV UP
SUBJECT: UKRAINE: PRESIDENT VETOES FLAWED CUSTOMS TARIFF 
LAW 
 
REFS: A) KYIV 1077 
      B) KYIV 1182 
 
¶1. On June 20, President Viktor Yushchenko vetoed a bill 
amending the Law "On the Customs Tariff of Ukraine," which 
Ukraine's Rada (parliament) had adopted on June 3.  While 
the original draft law was meant to lower Ukraine's tariff 
rates in line with commitments made during WTO accession 
negotiations, the version of the law that passed would have 
delayed tariff reductions until January 1, 2009 for a 
sizeable list of goods, including meat and poultry, cocoa 
powder and chocolate, wines, and automobiles (ref A). 
 
¶2. The bill now returns to the Rada, which would have to 
muster 300 votes in order to override the Presidential 
veto.  (Note: While this draft law was still working its 
way through the legislative process, the Tymoshenko 
government had issued instructions to the State Customs 
Service to apply the lowered tariff rates from May 16 -- 
the date of Ukraine's WTO accession -- regardless of the 
Rada's actions.  Those instructions will continue to govern 
tariff collection until a new law comes into effect.  End 
Note.) 
 
¶3. In his explanatory note to the Rada, President 
Yushchenko argued that the April ratification of the 
protocol of accession dictated that tariffs for all 
products must be lowered from the date of accession, and 
that such an international agreement takes precedence over 
domestic legislation.  Likely referring to a joint letter 
sent on June 13 by the Ambassador and other interested 
Embassies in Kyiv, Yushchenko also noted, "I would like to 
emphasize that the EU, Canada, Norway, the U.S., Japan, and 
a number of other WTO-member countries have already 
expressed their concern with the possibility of a violation 
of undertaken commitments."  The President's note 
recommended that the Rada amend the bill in order to 
eliminate all delays in tariff reductions. 
 
Comment: Veto Override Possible, but not Assured 
--------------------------------------------- --- 
 
¶4. Although 367 MPs, well over the 300 required for a veto 
override, voted in favor of the bill originally, an 
override is not certain.  Seventy-one of the 72 MPs from 
President Yushchenko's Our Ukraine - People's Self-Defense 
bloc had voted in favor and may now have to reconsider 
their vote given the President's strong opposition.  In 
addition, current political instability has all but shut 
down the Rada (ref B), making it quite possible that a vote 
will not take place anytime soon.  Only one more plenary 
session, to be held July 8-11, remains before the Rada's 
long summer holiday.  Although customs tariff collection is 
currently operating under a legally unclear mechanism (an 
unpublished letter from the PM to the head of Customs), and 
is subject to the political whims of the GOU, the situation 
remains more favorable than if the President had signed the 
law and brought back the higher, pre-WTO tariff rates for 
those goods covered by the deferral of tariff reductions to 
January 2009.  End Comment. 
 
TAYLOR