MINUTES № 19 RG of the Interagency Working Group Meeting on international trade facilitation and logistics in Ukraine

Kyiv

July 23, 2015

Venue: 11-g Degtiarivska Str.

Opened: 16:00

Closed: 17:30

List of Participants: Annex No 1

AGENDA

1. The results of the Fifth International UNECE Seminar "Facilitation of International Trade in Ukraine. From Local Solution to National Strategy”; Action Plan for the second half 2015.

Time: 15 minutes

Speaker: Mr Shchelkunov V. I, Deputy Chairman of the IWG, Advisor to the Prime Minister of Ukraine, President of the ICC Ukraine

2. Change of tariff rates for services provided by Data Center LLC PPL 33-35 according to agreements on the provision of technical support and maintenance of port community system (ISPS).

Time: 10 minutes

Speaker: Mr Platonov O. I., Deputy Chairman of IWG, President of UKRZOVNISHTRANS Association

3. The determination of the date and venue of the Seminar on the validation of the final report on the Ukraine’s readiness to implement the WTO Trade Facilitation Agreement.

Time: 10 minutes

Speaker: Mrs Vrublevska I. O., Head of Department for Modeling and Analysis of International Trade, the Ministry of Economic Development and Trade of Ukraine

4. Miscellaneous.

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Mr Shchelkunov V. I., Deputy Chairman of the Interagency Working Group on Facilitation of International Trade and Logistics in Ukraine (IWG), Advisor to the Prime Minister of Ukraine, President of the Ukrainian National Committee of International Chamber of Commerce (ICC Ukraine) opened the meeting and announced the agenda.

He proposed to discuss the issues, envisaged by the Agenda.

On the first issue of the Agenda:

The results of the Fifth International UNECE Seminar "Facilitation of International Trade in Ukraine. From Local Solution to National Strategy”; Action Plan for the second half 2015.

Mr Shchelkunov V. I. informed the participants on the results of the meeting in the Ministry of Economic Development and Trade (MEDT) on the creation of a national body on trade facilitation, provided by the WTO Trade Facilitation Agreement, held on behalf of the Cabinet of Ministers of Ukraine.

Mrs Vrublevska I. O. reported on the work carried out by the Ministry of Economic Development and Trade on trade facilitation. She informed that the Ministry plans to develop and implement the reform of national trade facilitation (three relevant documents for attracting international technical assistance have been drafted) and was going to submit a project of this reform at the National Council on Reforms, presenting it together with a clear action plan.

Moreover, parallel work is underway to get ready for the ratification of the WTO Trade Facilitation Agreement: the MEDT sent a request to other ministries and agencies to examine this Agreement (Annex No 2 - Letter of MEDT), the official translation of which will be done by MFA, and identify which legislative acts and regulations should be amended. She informed that these letters were sent to the ministries and departments at the beginning of June, and, unfortunately, the only response received was by SFS.

She called the representatives of the Ministry of Infrastructure, Ministry of Environment, Agriculture Ministry, Ministry of Finance, State Sanitary Service, State Environmental Inspection, State Sanitary and Epidemiological Inspection to consider the above letters and provide their feedback.

She also informed that the Ministry of Economic Development would submit a draft law on ratification of the Trade Facilitation Agreement. She encouraged all the ministries and agencies to adopt it.

Mr Shchelkunov V. I. offered to send this letter again to the ministries and departments, requesting the feedback within ten-day deadline.

Mr Platonov O. I. informed about the results of the Fifth International UNECE Seminar "Facilitation of International Trade in Ukraine. From local solution to national strategy" as well as the recommendations developed at the Seminar (Annex No 3), in particular the recommendations on public-private partnership, which should be taken into account when amending the Law of Ukraine "On Public Private Partnership", which will enable the economic operators and traders to develop their businesses and protect their investments.

He reported that the work of the IWG on implementation of port community system has achieved its goals and tasks set by the government, and now it goes from a local solution to a national strategy. The pilot project was conducted in the Odessa region

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involving one private investor, which is not enough for the further project expansion. It is necessary to hold the investor competition to select the organizations and companies in a transparent way, as they should be able to implement these projects and enforce the strategy.

He informed on the recommendations of the Seminar on evaluation of the Report on the Readiness of Ukraine to introduce provisions of the WTO Trade Facilitation Agreement (Annex No 4), held on 04.28.2015 in the framework of the 18th meeting of the Interagency Working Group on Facilitation of International Trade and Logistics in Ukraine.

He said that since the last meeting of the Cabinet of Ministers of Ukraine there are new tasks. The Prime Minister instructed the Ministry of Infrastructure and SE USPA in 45 days to start work in the ports of Odessa region in the new format in cooperation with Customs and other regulatory authorities. He noted that, unfortunately, this process is very slow. Mr Platonov informed that after this meeting, the IWG would prepare a review report to the Prime Minister on the fulfillment of his orders, as the entire program of cooperation with the European Union stands still. One of these examples is the European Customs computer system NCTS (New Computerised Transit System) that should be implemented in January 2017 (the relevant plan of action was adopted), but there is no progress witnessed.

He provided information on the fruitful cooperation with EUBAM Mission to Moldova and Ukraine. EUBAM has also established a working group with representatives of the business community, which also included representatives of the American Chamber of Commerce and European Business Association.

He informed that further coordination of trade facilitation efforts would be entrusted to the Ministry of Economic Development. The work will be systematized, especially it concerns those government officials that impede implementation of trade facilitation in Ukraine. He reminded that under the order of the Prime Minister, all ministries and departments, representatives of which are members of the IWG, should provide quarterly reports on implementation of IWG decisions and recommendations, drafted at its meetings and seminars, to IWG Secretariat.

He urged the IWG participants to consider the registers of enforcement of decisions and recommendations of the IWG meetings and seminars on trade facilitation and to include proposals for their implementation to the relevant quarterly report.

(Annex No 5 - Registry of Enforced decisions made at trade facilitation seminars;

Annex No 6 – Registry of Not-Enforced decisions made at IWG meetings for 2014)

Annex No 7 - Registry of Enforcement of the IWG decisions for 2015)

He thanked everyone who takes proactive part in the IWG meetings and projects implementation.

Mr Platonov also thanked the German Community for International Cooperation (GIZ) for participation in the meeting of the IWG and their interest in the project.

Commenting the report made by Mrs Vrublevska I. O., he reported on the meeting with the Minister of Economic Development and Trade Mr Aivaras Abromavičius, who promised to support and facilitate the work of the IWG. He informed that during the meeting, the position on the need to address the complex issues related to trade facilitation and logistics was agreed, especially in the context of the urgent reforms that Government of Ukraine is implementing. The following steps (after ratification of the WTO Trade Facilitation Agreement by the Verkhovna Rada of Ukraine) are required:

- establishment of the National Committee for trade and logistics facilitation, as required by Article 23.2 of the WTO Agreement (possibly on the platform of the existing IWG under the auspices of Minister);

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- development of national plan and programs on trade and logistics facilitation to ensure the implementation of government reforms within the Strategy for Sustainable Development "Ukraine - 2020" approved by the Decree of the President of Ukraine as of 12.01.2015 No 5/2015;

- working out the mechanisms of public-private partnerships and public monitoring of the progress of reforms in international trade and logistics.

Mr Platonov proposed to pay special attention to this issue during the report to the Cabinet of Ministers of Ukraine on the results of today's IWG meeting.

DECIDED:

1.1. To take into consideration the information provided by the speakers.

1.2. To draft a letter to the ministries and agencies, requiring the mandatory feedback to the letter of the Ministry of Economic Development and Trade No 4433-06/17810-03 as of 03.06.2015.

Deadline: 04.08.2015

Responsible: IWG Secretariat

1.3. To Ministries and agencies: to consider and provide their feedback to the letter from the Ministry of Economic Development and Trade No 4433-06/17810-03 as of 03.06.2015 in two weeks.

Deadline: 18.08.2015

Responsible: Ministry of Infrastructure, Ministry of Finances, Ministry of Agrarian Policy, Ministry of Ecology, State Veterinary and Phytosanitary Service, State Environmental Inspection, Sanitary and Epidemiological Inspection

1.4. To Ministries and agencies: to handle the Registers of Enforcement of the decisions and recommendations of the IWG meetings and trade facilitation seminars and to provide their feedback in the quarterly report.

Deadline: 18.08.2015

Responsible: IWG members

1.5. To prepare a report to the Cabinet of Ministers of Ukraine on the results of today's IWG meeting, supporting the MEDT in the development of a national reform on trade facilitation, to be submitted to the National Council on Reforms with a clear plan of action and step-by-step approach.

Deadline: 08.08.2015

Responsible: IWG Secretariat

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On the second issue of the Agenda:

Change of tariff rates for services provided by Data Center LLC PPL 33-35 according to agreements on the provision of technical support and maintenance of Port Community System (ISPS).

Mr Shchelkunov V. I. informed on the fact that due to the implementation of port community system (ISPS) in the seaports of Odessa region, the business expenses declined by almost four times. The system proved to be effective, it is developing, covering more and more procedures. The majority of ISPS users confirms this fact. At the same time, the economic situation in the country and increase in ISPS maintenance costs have led to the need for tariff increase for services provided by the Data Center LLC PPL 33-35 pursuant to agreements on the provision of technical support and maintenance of Port Community System (ISPS). He asked the members to understand that current changes are necessary.

Mr Berestenko V. V. questioned the positive effects of ISPS and expressed AIFFU’s position on this issue. (Annex No 8).

Mr Platonov O. I. explained the situation. He said that the system expected the SE USPA to launch the full scale technologies. Four years ago, ISPS was supposed to handle all types of cargo, including and general goods, based on full system load. The system was built on the principle of two possible accesses: on a paying basis for the representatives of the cargoowners (freight forwarder) and free of charge for port technical offices. Accordingly, the entities have the choice. The system was built on the principle of self-sufficiency. By the end of the year, the cost of services will be adjusted monthly to ensure the self-support of the system. He informed that Minister of Infrastructure has decided that it is now probably USPA that will deal with this issue: this is under consideration now. No one, however, knows how it will be done exactly. Neither Ministry of Infrastructure, nor the State Fiscal Service is willing to bear the costs associated with the transfer and maintenance of the system.

Mr Platonov O. I. commented on Mr Berestenko’s statement: today exclusively the freight forwarding companies pay for ISPS services. He said it was the USPA’s decision, which he personally considers incorrect, as there are many other users, including the state.

He reminded that since the ISPS implementation, no complaint or stolen or exported without customs clearance containers have been recorded.

Regarding the coverage of all modules: the new modules appear almost every month. This is the same system as in other European countries, which also operate two systems: one for customs and one for port; they are interconnected, sharing data.

He emphasized that the issue of tariff raise should not be approved at the IWG meeting, as this is a matter of awareness and assessment of the real situation regarding the development of the system.

Mr Struk A. B. reported on the Cabinet of Ministers Decree of 07.07.2015 No 491 "On amendments to some decrees of the Cabinet of Ministers", which will promote trade

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and logistics facilitation in ports of Ukraine. (Annex No 9 – CMU Decree as of 07.07.2015 No 491, Annex No 10 - Comparative Table of Changes)

Participants of discussion:

Mr Kuchinski Y. F.

Mr Pavlishyn S. A.

Fedorov A. F.

DECIDED:

2. To take into consideration the information provided by the speakers.

On the third issue of the Agenda:

The determination of the date and venue of the Seminar on the validation of the final report on the Ukraine’s readiness to implement the WTO Trade Facilitation Agreement.

Mr Shchelkunov I. V. informed that it was decided to hold UNECE Seminar on Notification of the Final Report on the Readiness of Ukraine to apply the WTO Trade Facilitation Agreement from 30.09.2015 to 02.10.2015. He also announced the initiative of Deputy Minister of Economic Development and Trade - Trade Representative of Ukraine Mrs Mykolska N.Y. - to hold the individual seminar for ministers and their deputies under the auspices of the Cabinet of Ministers of Ukraine after the above Seminar.

Mrs Vrublevska I. O. announced a proposal of the MEDT regarding the involvement of almost all international technical assistance donors currently dealing with the issues of trade facilitation in Ukraine such as CLDP, USAID, and intent to involve SIDA and the World Bank.

She noted that the report about the readiness of Ukraine is very important, but we need to consider the practical steps of implementation of the WTO Trade Facilitation Agreement in Ukraine during the Seminar, and to organize meetings and discussions with business, legislators and central authorities.

Mr Fedorov O. O. asked the representatives of the Ministry of Economic Development to amend an official translation of the WTO Trade Facilitation Agreement made by Ministry of Foreign Affairs, as there are few cases of incorrect translation of terminology, which in the future can lead to misunderstandings and contradictions with current legislation.

Mr Proskurov M. V. informed that this is possible and asked to send their proposals to amend the official translation to the Ministry of Economic Development and the Ministry of Foreign Affairs.

DECIDED:

3. To take into consideration the information provided by the speakers.

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3.1. To hold UNECE Seminar on Validation of the Final Report on the Readiness of Ukraine to apply the WTO Trade Facilitation Agreement from 30.09.2015 to 02.10.2015.

Deadline: 30.09 – 02.10.2015.

Responsible: IWG Secretariat, Ministry of Economic Development and Trade

3.2. To send the proposals to amend the official translation of the WTO Trade Facilitation Agreement to the Ministry of Economic Development and the Ministry of Foreign Affairs.

Deadline: 04.08.2015

Responsible: IWG Secretariat

Chairman V. I. Shchelkunov