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Kiev concerned over restrictions on transit of Ukrainian goods through Russia
Ukraine fears that within the framework of changes in trade and economic relations between Kiev and Moscow from January 1, 2016 there is a threat that Russia may impose restrictions on the transit through its territory of goods of Ukrainian origin to third countries (Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan Uzbekistan, China and others), the Ukrainian Economic Development and Trade Ministry reported on Wednesday.
"The Russian Federation is expected to take special control measures over the transit via Russian territory to third countries of Ukrainian products the import of which into Russia will be banned from January 1, 2016," the ministry said.
In addition, according to Ukrainian Economic Development Ministry, Russia insists on cutting the quotas both on bilateral shipments and on transit within the framework of the international motor service agreement between the governments of the two countries.
The Ukrainian ministry says that "the introduction by the Russian Federation of restrictions on the transit of goods of Ukrainian origin is economically and legally unfounded" and expects that this measure will "artificially worsen the terms of trade between Ukraine and third countries, Central Asian states, in particular."
Russia has adopted a law suspending the agreement on free trade zone with Ukraine. This document provides for the suspension of the preferential trade regime with Ukraine in order to prevent threats to Russia's economic security in view of coming into force of the trade and economic chapters of the Ukraine-EU Association Agreement (AA) as of January 1, 2016.
Russian President Vladimir Putin signed on Wednesday the relevant law. The document was published the legal information portal. According to the document, a decision on the renewal of the free trade zone agreement will be taken personally by the president.
On December 17, President Putin submitted a federal bill on suspending the treaty on a free trade zone as regards Ukraine. The explanatory note appended to the bill said it envisioned suspension of the preferential treatment of Ukraine in trade relations.
"The Ukrainian side has de facto renounced development of trade and economic cooperation in the format of the CIS and has opted for the pathway of an all-round integration in the EU," the explanatory note says.
It pointed out in particular the tariff liberalization envisioned by the AA, which might inflict considerable damage on the Russian economy.
The note also said Ukraine's obligations under association with the EU ran counter to the provisions of the agreement on the free trade zone in what concerned duty-free trade
On November 18, the Russian government also decided to introduce from January 1, 2016 a food embargo against Ukraine in connection with Kiev's joining the sanctions regime against Russia.
On Tuesday, Ukrainian Prime Minister Arseniy Yatsenyuk said that Kiev had prepared counter measures in response for Russia's introduction of food embargo and suspension of agreement on a free trade zone starting from January 1, 2016, "Ukraine has already prepared counter sanctions as an accurate response for both trade embargo to be introduced by the Russian Federation and suspension of the agreement on a free trade zone within the CIS between Ukraine and Russia," he said.
On December 24, Ukraine's Verkhovna Rada (parliament) passed the law, which enables the government to impose economic sanctions against Russia. Particularly, the government will have the right to impose "a ban on foreign economic operations or their restriction" as well as abandon tariff preferences.
[Source: Itar Tass, Kiev, 30Dec15]
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