VZCZCXRO2245
OO RUEHDBU RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHKV #0425 0651323
ZNR UUUUU ZZH
O 061323Z MAR 09
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7427
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 0172
RUCNCIS/CIS COLLECTIVE

UNCLAS KYIV 000425 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTA 
STATE PLEASE PASS TO USTR FOR CKLEIN, PBURKHEAD, CMORROW 
USDOC FOR 4201/DOC/ITA/MAC/BISNIS 
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYK 
USDA FOR FAS/ONA AND FAS/OCRA 
GENEVA FOR USTR 
 
E.O.: 12958: N/A 
TAGS: ETRD EFIN WTRO PGOV UP
SUBJECT: UKRAINE: AMBASSADOR DELIVERS STRONG MESSAGE ON 
IMPORT TARIFF LAW, GOU TRYING TO FIX 
 
REFS: A) STATE 17765 
      B) KYIV 349 
 
SENSITIVE BUT UNCLASSIFIED; NOT FOR INTERNET PUBLICATION. 
 
¶1. (SBU) Summary: Ambassador Taylor has delivered a 
demarche protesting Ukraine's plans for a 13 percent 
surcharge on import duties to a range of high-level 
government officials, including the President.  The GOU 
claims it opposed the law and appears to be looking for a 
way to remedy the situation.  The government may introduce 
new legislation to eliminate or reduce the 13 percent 
surcharge.  End Summary. 
 
¶2. (U) Ambassador Taylor delivered ref A demarche, 
concerning Ukraine's adoption of legislation to raise 
import tariffs (ref B), to the following high-level 
officials: President Victor Yushchenko, 1st Deputy Prime 
Minister Oleksandr Turchinov, and Deputy Prime Minister 
(for International Affairs) Hryhoriy Nemyrya.  Econoff also 
delivered the demarche to Volodymyr Baluta, head of the 
Ministry of Economy's WTO Department, and Yevgen Burkat, 
head of the MFA's Trade Policy Division.  Ambassador Taylor 
has requested a meeting with Minister of Economy Bohdan 
Danylyshyn to discuss further. 
 
¶3. (SBU) DPM Turchinov told the Ambassador on February 25 
that GOU leadership had in fact opposed the tariff increase 
and encouraged the President to veto the law.  The 
Ambassador pointed out in response that members of BYUT, PM 
Yulia Tymoshenko's electoral bloc, had voted overwhelmingly 
in favor of the law and that Serhiy Teriokhin, a prominent 
BYUT MP, had been the driving force of the initiative. 
 
¶4. (SBU) Meeting with the Ambassador on February 26, DPM 
Nemyrya recognized the problem but did not offer any 
potential way forward.  (Note: Nemyrya, on the margins of a 
February 24 event, had previously intimated to Econoff that 
the GOU was looking for a legal loophole to either suspend 
enforcement of the law or to reduce the impact on 
importers.  End note.)  Baluta told Econoff on March 2 that 
the Ministry of Economy was drafting a new law to lower the 
import tariff surcharge from 13 percent to 2-3 percent. 
Baluta added that the Ministry was drafting an official WTO 
notification on the new tariffs and would submit it as soon 
as the Ministry of Finance provided some necessary data, 
expected by the week of March 9. 
 
¶5. (U) PM Yulia Tymoshenko told the press on March 5 that 
the GOU was planning to submit a draft law to parliament to 
lower or eliminate altogether the 13 percent surcharge. 
Tymoshenko noted that the devaluation of the hryvnia (the 
national currency) had already eased Ukraine's trade 
deficit, making the surcharge "unnecessary."  Tymoshenko 
added that the "introduction of a 13 percent extra duty 
charge directly contradicts Ukraine's agreements within the 
WTO." 
 
TAYLOR