13 AUG 97
FM AMEMBASSY KIEV

1. THE UKRAINIAN CABINET OF MINISTERS ISSUED
RESOLUTION 502 ON MAY 26, "ESTABLISHING MINIMUM CUSTOMS
VALUES FOR PRODUCTS SUBJECT TO EXCISE DUTY." THE LIST
INCLUDED SOME FOOD, CLOTHES, AUDIO AND VIDEO EQUIPMENT
(SAMPLE ITEMS PROVIDED IN PARA 4). THE RESOLUTION WAS
PUBLISHED ON JUNE 3 AND TAKES AFFECT 10 DAYS AFTER
PUBLICATION. ON JULY 3, THE OUTGOING AND INCOMING
ECONCOUNS AND ECONOFF MET WITH ANDRIY BEREZNIY, HEAD OF
THE MULTILATERAL DIVISION AT THE MINISTRY OF FOREIGN
ECONOMIC AND TRADE RELATIONS (MINFERT) AND DELIVERED
TALKING POINTS PROVIDED REFTEL. BEREZNIY SAID HE WAS
AWARE THAT RESOLUTION 502 ON MINIMUM CUSTOMS VALUES IS
NOT CONSISTENT WITH THE WTO AGREEMENT ON CUSTOMS
VALUATION. HE SAID HE HAD ADVISED THE GOVERNMENT OF
UKRAINE TO EITHER REDUCE OR ABOLISH THE EXCISE DUTIES
PROPOSED IN THE RESOLUTION AND THAT MINISTER OF FOREIGN
ECONOMIC AND TRADE RELATIONS OSYKA HAD SENT A LETTER TO
THE CABINET OF MINISTERS STATING THAT THE CUSTOMS CODE
MUST REMOVE MINIMUM CUSTOMS VALUES.

2. OUTGOING ECONCOUNS SAID IT WAS HIS UNDERSTANDING
THAT THE IMF HAD URGED UKRAINE TO GET RID OF THE MIXED
TARIFF SCHEDULE AND ASKED BEREZNIY IF THE IMF CONSIDERS
RESOLUTION 502 ACCEPTABLE? BEREZNIY RESPONDED THAT IN
1996 THERE WERE NO MINIMUM CUSTOM VALUES OR IMPORT
DUTIES AND THAT THE IMF HAS ADVISED UKRAINE TO ABOLISH
THE MINIMUM CUSTOMS VALUE SYSTEM. HOWEVER, BEREZNIY
EXPRESSED HIS PERSONAL BELIEF THAT MINIMUM CUSTOMS
VALUES SHOULD BE RETAINED FOR SOME PRODUCTS, SUCH AS
AGRICULTURAL GOODS. HE SAID THE GOVERNMENT HAD ISSUED
RESOLUTION 502 ON MINIMUM CUSTOMS VALUES SINCE IT IS
THE PRACTICE OF FIRMS TO UNDERVALUE THE GOODS BEING
IMPORTED INTO UKRAINE. HE STATED THAT THE RESOLUTION
WAS DESIGNED TO COLLECT VAT AND EXCISE DUTIES, NOT
CUSTOMS DUTIES.

3. BEREZNIY ADVISED THAT KEEPING IN LINE WITH IMF
CONDITIONS AND WTO STANDARDS, MINFERT HAS DRAFTED A
CABINET OF MINISTERS DECREE ON REMOVING 94 ITEMS ON THE
MINIMUM CUSTOMS LIST AND IS WORKING ON A SECOND DECREE
REGARDING ANOTHER 92 ITEMS. HE STRESSED THAT THE GOU
WILL FULFILL ALL IMF CONDITIONS BUT STATED HIS BELIEF
THAT THERE NEEDS TO BE AN "AGREED UPON MEDIAN EUROPEAN
MARKET PRICE" FOR SOME GOODS.

4. AN EXAMPLE OF GOODS AND MINIMUM VALUES SET:

NESCAFE CLASSIC COFFEE, 100 GRAMS       USD 1.30
BLACK CAVIAR, 1 KILO                       55.00
RED CAVIAR, 1 KILO                         20.00

BLANK AUDIO-CASSETTES, APIECE
SONY                                        0.45
TDK                                         0.60
BASF                                        0.50

VCR'S
PHILIPS                                   190.00
SONY                                      230.00
PANASONIC                                 230.00
JVC                                       190.00
AKAI                                      160.00
SANYO                                     160.00
TOSHIBA                                   200.00
DAEWOO                                    130.00

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)