Last year was noted for a new swing of trade disputes, in particularly between Ukraine and Russia, both domestically and within the WTO. In 2017 Ukraine initiated two dispute settlement procedures in the WTO. The first was against Russia (in addition to existing ones) and the second was against Kazakhstan. In its turn, the Russian Federation also requested consultation with Ukraine on measures imposed by Ukraine on trade in certain goods and services. As to other cases pending with Russia in the WTO, the procedures moved forward and 2017 resulted in the establishing of Panels.
Internally, Ukraine’s trade defence vector was focused on both reviewing existing measures, including with the Russian Federation and Belarus, as well as initiating new procedures expanding on anti-dumping and safeguards measures.
The regulator’s approach towards procedures for the conduct of trade remedies and application became more sophisticated. Long-awaited anti-dumping, safeguards and countervailing laws (already passed to Parliament for adoption) will benefit domestic producers by providing more diversified tools for use and so enable the efficient defence of domestic markets.
Staying competitive on the market will require in-depth knowledge of WTO practice and higher dedication to cross-sectoral and economic expertise from legal practitioners. Moreover, successful legal counsel will be able to handle business advisory, negotiation skills and GR issues to deliver the best outcome for his or her clients.
In 2018-2019, we expect a fast-paced domestic and external trade environment for Ukraine pushed by the dynamic and protectionist trade policy of global market players. Adoption of new trade remedies laws is likely to stimulate domestic producers to protect domestic markets at a higher pace; the first results of Ukraine-Russia WTO disputes are to be published; further active and diverse development of trade policy with major global markets as well as continuation of negotiations on signing of Free Trade Agreements. Generally, Ukraine is becoming more visible on the global trade arena.
Pavlo TRYTENICHENKO | ARBITRADE
2017 was a rather active year for trade in agricultural commodities, with exports increasing due to high yields and continued technological development of the agrarian sector. Accordingly, lawyers received a considerable number of requests connected both with disputes and contract drafting.
As participants of international trade, Ukrainian exporters are active users of standard contract forms of GAFTA and FOSFA. However, the Ukrainian market has its peculiarities connected with country-specific regulation, poor infrastructure, and extreme significance of the railway as a method of delivery, which result in detailed modifications of the standard forms by contracting parties.
One of the latest initiatives in this connection is the creation of a GAFTA contract designed specifically for Ukraine led by GAFTA’s regional office in Kyiv with the participation of key players in the trade as well as legal practitioners. While being built on the same foundations as other GAFTA contracts, such as the application of English law and the exclusion of the CISG and Incoterms, the new form will offer specific provisions accustomed to the Ukrainian market and logistics.
It remains to be seen whether the standard form will be adopted by GAFTA and ultimately accepted by the trade.
Another development in the practice area which is worth mentioning is the adoption of new arbitration rules by FOSFA which came into force on 1 April 2018. The new rules are designed to facilitate the efficiency of arbitral proceedings. Amongst other things, the procedure for appointment of arbitrators was changed and the time limits for claiming arbitration were significantly increased for some categories of disputes.
We anticipate that the agrarian sector will remain an active practice area in 2018. The expected high yields will ensure active trade in soft commodities, while logistical difficulties and the changing legal landscape will continue to generate interesting cases for lawyers.
Sayenko Kharenko consistently retains the position of market leader, maintaining an exceptional track record for handling complex matters. In the past year the team, together with leading international law firms, provided legal support to the Ukrainian Ministry of Economic Development and Trade in four WTO disputes on transit; railway equipment; the WTO SPS/TBT limitations applied by Russia; and a WTO dispute on anti-dumping measures applied to imports of ammonium nitrate with their origin in Ukraine. The practice group is among preferred counsels for trade remedies and contractual structuring, franchising and distribution matters. In particular, the team represents VITA POLYMERS POLAND sp. z o.o. in court proceedings challenging safeguard measures applied to imports into Ukraine of plates, blocks and sheets of flexible foam notwithstanding the country of origin and export; Adama Rus and Adama Manufacturing Poland S.A. in anti-dumping investigation related to imports into the Eurasian Economic Union of herbicides originating in the EU; Azovstal Iron and Steel Works, Ilyich Iron and Steel Works, Avdiyivka Coke and Chemicals Plant, SMA INKOR & CO, Zaporozhkoks (Group Metinvest) in a safeguard investigation related to imports into Ukraine of nitric acid notwithstanding the country of origin and export. The practice has been led for many years by Dr. Tatyana Slipachuk, who also leads the international arbitration practice. Anzhela Makhinova, who was recently promoted to partner, is referenced for her broad-based representation in trade remedies matters, and unique expertise in WTO dispute proceedings. Andrew Zablotskyi, counsel, retains a commitment to trade projects and expanded practice on GR, regulatory and contract matters related to international trade.
Ilyashev & Partners increased project workflow involving anti-dumping investigations and reviews, both internal and external. The practice team’s additional experience includes market access and WTO regimes, product safety, technical barriers to trade (TBT), customs clearance, sanctions advice, regulatory issues. Among recent highlights is representing Swisspan Group in an anti-dumping investigation related to imports into Ukraine of certain urea-formaldehyde from Russia; representing Mosyrsol in an anti-dumping investigation related to imports into Ukraine of salt from Russia. The case where the firm represented ROSHEN in an anti-dumping investigation related to imports of certain chocolate containing products from Russia (project value of USD 590 million) was finalized with the imposition of a 31.33% duty. The main trade practitioner known on the market is Olena Omelchenko.Andrey Bychkov, Yevgenia Makarenko, Oleksiy Gorbatiuk are other team members.
Attorneys’ Association Gestors is mostly known for its trade remedies work. The team under the guidance of associate partner Yaroslav Snigur acted as counsel to PJSC Dobrush Porcelain Factory (Belarus) on the review of special safeguard measures on the import of cutlery and porcelain dishes to Ukraine. Another significant project included representation in cooperation with Baker McKenzie of ArcelorMittal Kryvyi Rih, in an anti-dumping investigation on the import of reinforcing steel bars and wire rod from the Russian Federation.
AGA Partners1 is one of the most experienced market teams in the commodities trade, which counts the lion’s share of the biggest agribusiness companies among its clients (ViOil Industrial Group, MHP, COFCO Agri, NCH, State Food and Grain Corporation of Ukraine (SFGCU), Ukrlandfarming, Astarta, Mriya Agro Holding, etc.), and demonstrated new victories by big names to its portfolio. The firm occupied its niche in commodities arbitration, and assists in forming the trade practice in the region. For example, the firm won a GAFTA dispute on delivery of wheat to South Asia where it represented Agroprosperis. The core team remains the same, namely Aminat Suleymanova, Ivan Kasynyuk and Irina Moroz.
INTEGRITES boosted its newtrade and commodities practice, handling significant contracts and high-profile disputes, including GAFTA/FOSFA claims for a solid roster of clients. To name a few: The State Food and Grain Corporation of Ukraine (SFGCU), Astarta, Rostok-Holding, NF Trading, Scanwel Commodities (Switzerland), COFCO (China), COFCO International (Switzerland), Promising International (UAE). The latest experience is centered on commodities disputes, enforcement of arbitration awards, investment protection and related disputes, regulatory, sanctions and trade restrictions. Most recently the firm defended the SFGCU in GAFTA arbitration against a Middle Eastern trading house over the issue of recoverable damages for delayed shipment. Ivanna Dorichenko, London-based partner, is one of the top referred experts within this area. Widely acclaimed arbitration partner Olena Perepelynska is among the strongest counsels on commodity trading disputes. In January 2018 the firm hired new counsel Sergey Lakhno (previously employed in the AMCU) to develop trade remedies and WTO.
ARBITRADE is a market recognized counsel for structuring transactions related to international trade in commodities and assists in drafting corresponding agreements. The firm’s recent focus has taken in complex transactions on transshipment of tropical group oils, sale and purchase of commodities, etc. Notably, the firm is traditionally highly active in commodities arbitration, and assists in achieving amicable settlements. The rich client portfolio includes TÜRKKAN YAĞ SAN.TIC.A.Ş. (Turkey), EXOIL TRADING S.A. (Switzerland),EFKO-Trade LLC (Russia), Prestige Commodities Trading (Pty) Ltd (South Africa), Bunge S.A. (Switzerland), Veres group of companies (Ukraine), etc. Throughout the past year, ARBITRADE has regularly provided several consultations to its long-standing client EFKO-Trade LLC on various matters related to international trade in agricultural products; represented the Swiss company EXOIL TRADING S.A. during the pre-arbitral stage of dispute resolution with its counterparty, AVES TRADE (SUISSE) S.A., thereby avoiding a claim in arbitration under FOSFA. Another notable representation of a long-standing client is the SFGCU in appeal proceedings under GAFTA rules in a dispute under contracts for sale and purchase of barley and wheat. Pavlo Trytenichenko is the practice head. Yuliya Chernykh, of counsel, who moved to work as an arbitrator, maintains peers recognition.
With its impressive client roster, AEQUO has a steady workflow of assignments for advising on trade regulations, customs and commercial matters in trade. The firm handles deal and contractual structuring of complex foreign trade transactions. AEQUO advised Sumitomo Corporation on various customs, regulatory and trade issues and developed a new trade scheme for supply of pesticides in Ukraine in order to minimize customs risks; acted for Resilux Central Europe Packaging Ltd (Hungary) on supply of products to Ukraine according to the free trade agreement with the EU. The commercial practice is led by partner Anna Babych, and has its focus on distribution, franchising, transportation, international sanctions, export controls, complex regulatory matters, product compliance and recall. Her team advised Mattel Inc., one of the world’s leading producers and distributors of kid’s toys, on a distribution scheme in Ukraine, proper structuring and payment of royalties, mitigating possible customs and FX risks. Denis Lysenko, managing partner, heads the practice team. Oleksandr Tereshchenko, Yaroslav Lepko and Yevgen German are the main team members.
The full-service law firm Arzinger is involved in structuring cross-border supply, commercial arrangements, market entry and regulatory restrictions, sanctions. The firm has particular expertise across agriculture, technology, pharmaceuticals and transportation. The team provided advice to an international developer of innovative security system technologies for optimizing resources and taxes in the delivery of products to the European market; and advised one of the leading aircraft supplier-companies in the world on supplying and leasing aircraft pool components. The firm also benefits from its network across Ukraine, covering Lviv, Odessa and Kyiv, and was recently instructed for legal support of export to the EU. Andriy Selyutin, partner and head of the Odessa branch, is the key contact. Markian Malskyy, arbitration partner and head of the Lviv office, has experience in the trade remedies and policy issue.
Asters developed its international trade practice with its recently added trade remedies mandates. Moreover, the firm traditionally advises on a broad range of trade transactions, Ukrainian sanctions regime, export/import and distribution, specific regulations, transit. This past year the firm boosted its practice with anti-dumping and safeguard investigations, entering this highly specific niche. Thus, in the firm’s project portfolio there are three new investigations initiated by Ukraine in 2017. For example, representation of PJSC Metafrax and Trading company Metafrax Ltd., a leading Russian producer and exporter of chemicals, in the anti-dumping investigation regarding imports of certain urea-formaldehyde products originating in Russia; representing OJSC Naftan, a Belarusian producer and exporter of petrochemicals, in a safeguard investigation concerning imports of sulfuric acid and petroleum originating in the Republic of Belarus. Alexey Pustovit, partner known for his wealth of competition practice, took over as the leader in the trade remedies practice. Associates Dmytro Vidsota and Nadiia Dmytrenko make up the core team. Other partners, namely Svitlana Chepurna, Oleksiy Didkovskiy, Alexey Khomyakov handle work involving trade.
Baker McKenzie rounds off its international commercial and trade offering with strong experience in US, EU and Ukrainian sanctions, compliance with Ukraine’s obligations under the WTO, market access and regulatory set, export control and public procurement. The firm is traditionally involved in structuring contractual arrangements in cross-border trade. In 2017 the office is noted for trade remedies work, inter alia, representation in cooperation with Gestors of ArcelorMittal Kryvyi Rih in the course of an anti-dumping investigation into the import of steel bars and wire rod from Russia. The practice is managed by two partners, Serhiy Chorny and Ihor Olekhov, including associates Hanna Shtepa, Maksym Hlotov, Ganna Smyrnova.
Gramatskiy & Partners is primarily focused on structuring cross-border trade transactions, working with a variety of goods and services. The team benefits from a wealth experience of regulatory assignments, advising on tariff and non-tariff barriers to trade. The client base consists of traders, exporters and importers, international logistics, freight, stevedores, banks. Among selected names are Textile CO, VPG AGRO, Lavinia, PM Autotrans, Spirit Company, OLAINFARM. The firm advises on trade policy, export control and customs, market access across core trade destinations — EU, China and the Asian market, particularly the Middle East. In past years the firm has been involved in supporting clients in China, inbound and outbound investments, structuring contracts and joint projects with Chinese partners. Andrii Trembich, practice head, has extensive commercial background.
Jurvneshservice, a Ukrainian law firm with a long presence on the market, is focused on transactional structuring, working on a broad range of contractual arrangements (supply, distribution, agency), product liability, financial settlement and customs regulation. This past year saw the firm advise Estonian company K&K Foods Association OÜ, which traded Coca Cola soft drinks to South Africa on a supply contract; and Limited Liability Company Ukr-Kor Trade, a Ukrainian importer of cosmetic products. Gennadii Tsirat,Kateryna Tsirat and Dmytro Salatiuk are actively involved in the practice.
Egorov Puginsky Afanasiev & Partners Ukraine (EPAP Ukraine) enjoys the recognition of its international trade team on the market. The firm is mostly known for representation in trade investigations, external and internal ones. Gleb Bialyi and Anton Sintsov are named in the poll.
Eterna Law has an established following of agrarian clients, and is mostly active on the dispute front. The arbitration team, as guided by Eugene Blinov, is regularly instructed by producers and traders on GAFTA and FOSFA arbitrations.
Odessa-based Interlegal has a trade practice centered on the commercial disputes area normally arising out of transportation and violation of terms of trade, including freight and debt recovery.
PwC Legal has extensivelegal, customs and tax backgrounds for providing restructuring solutions in cross-border trade, advising on structuring supply, customs regime, risks and compliance. This reputable team assisted the Ministry of Finance of Ukraine in the development of assessment methodology for companies applying for the status of the Authorized Economic Operator. Denis Shendryk, practice head, is experienced in customs, currency control and tax legislation.
Oksana Kobzar Law Firm, which is based in Kharkiv, advises exporters on a regular basis, as well as appeal sanctions. The firm recently ensured cancellation of a penalty imposed on its client for violating the terms of recording of foreign exchange earnings as well as with sanctions regarding individual licensing of foreign economic activity. Oksana Kobzar is the main contact.
1 As of July 2018, the firm has merged with AVELLUM.