EU criticizes Ukrainian law creating auto import disposal fee

The European Union (EU) issued a statement on August 5 criticizing Ukrainian President Viktor Yanukovych for signing a law on August 2 applying a disposal fee on automobile imports, and asking him to reconsider it. “This law is one more strike against transportation exports from the EU, which were already harmed by the unjustified increase of import duties on automobiles in March,” said the statement released by the EU Delegation to Ukraine. The fee affects EU auto exporters most because they account for the biggest trade with Ukraine. “The EU’s trade streams, which can be potentially affected by this fee, amount to EUR 250 million, which approaches the value of automobiles that the EU exports annually to Ukraine.”

Zenon Zawada: All the fees being applied to auto imports from the EU are the result of the current government desperately looking for sources of revenue that are largely tapped out. That’s proving to be a road of nowhere, not only discouraging business activity, but now affecting relations with the EU at a critical time, when a decision needs to be made on the Association Agreement.

What’s revealing about this situation is that EU Delegation to Ukraine Head Jan Tombinski had previously urged Yanukovych to veto the disposal fee law after it was approved by parliament in early July. He pointed out that the law violated World Trade Organization principles, yet Yanukovych was unfazed, which serves as further evidence that he’s willing the EU’s patience to the fullest extent in trying to get as many concessions as possible before potentially signing the Association Agreement.

Given that Yanukovych has failed to deliver on the smaller requirements, he will surely have to arrange for the release of former Prime Minister Yulia Tymoshenko for medical treatment in order to sign the Association Agreement.