Ukraine is accused of non-market energy prices

European integration

At the end of last week it became known that the European Commission published preliminary calculations of new anti-dumping duties on Ukrainian seamless pipes - from 12% to 28%, in contrast to the current rate of 38.5%. The reduction in duties was the result of an anti-dumping investigation after Ukraine was assigned market status. However, industry enterprises call even the reduced duties “unjustified,” and government officials intend to push the commission to further reduce them. Experts doubt the possibility of influencing the commission’s decision - the EU recognized Ukraine’s approaches to the formation of domestic prices for energy resources as non-market.

According to the Ministry of Economy, the EU first introduced an anti-dumping duty on the import of Ukrainian seamless pipes on February 14, 2000. At the beginning of 2005, its size was 38.5% of the customs value of the goods. In February 2005, the European Commission (EC) established new duties on the import of Ukrainian seamless pipes: 51.9% for the Dnepropetrovsk Pipe Plant, 64.1% for other Ukrainian manufacturers. However, the commission almost immediately suspended its decision, maintaining the duty of 38.5% on five types of Ukrainian seamless pipes until 2010.

At the end of last week, it became known that the EC sent Ukrainian enterprises preliminary calculations of new anti-dumping duties on the export of Ukrainian seamless pipes to the European Union. As a result of the EC investigation, which was initiated following a complaint from European manufacturers back on March 31, 2005, the following levels of anti-dumping duties were determined for Ukrainian exporters: Dnepropetrovsk Pipe Plant OJSC - 12.6%, Nizhnedneprovsky Pipe Rolling Plant OJSC and Nikopolsky Pipe Plant JSC Seamless Pipe Plant (Niko-Tube) - 27%, Nikopol Steel Pipe Plant (JSC YuTiST) - 28.2% (the plants are affiliated with the Interpipe Corporation). At the same time, duties will be introduced against all types of seamless pipes according to 11 codes. According to the Ukrtrubprom association, the commission must introduce new duties between May 1 and June 30. Currently there is a duty of 38.5%, which is levied on 5 product codes.

The EC initiative shocked Ukrainian producers. “The new duties (more than 10%—Kommersant) are practically prohibitive, which closes the EU market for our products by $100 million a year,” says Evgeniy Shkarban, head of the trade policy department of the Interpipe corporation. According to the general director of Ukrtrubprom, Leonid Ksaverchuk, Ukraine may lose “sales markets in 25 EU countries for the next five years,” and the segment of inexpensive pipes will be occupied by product manufacturers from China, “leading an aggressive policy in the European market.”

In addition, the amount of duties turned out to be higher than expected - the assignment of market status to Ukraine and the reduction in supplies of seamless pipes to the EU in 2004-2005 could even lead to the complete abolition of anti-dumping duties on the export of Ukrainian products. “After the collection of duties from Russia and Romania was suspended in August 2004, supplies from these countries to Europe began to grow, and from Ukraine to decline. But Ukraine was still included in the list of countries where there was an increase (supplies to the EU. —Ъ),” says Mr. Shkarban.

After Ukraine was recognized as a country with a market economy, as Kommersant already wrote, developed countries gained the right, when initiating new investigations (or revising existing anti-dumping duties), to find the fact of price dumping in the provision of state benefits to specific enterprises and industries (see Kommersant of February 20) or non-market the nature of the formation of tariffs for electricity and gas (for more information on the regulation of gas prices in Ukraine, see pages 1, 7).

Therefore, as experts note, Ukraine has little chance of reducing the duty declared by the EC. As part of the investigation, the commission accused Ukraine of non-market pricing of gas and electricity. “All Ukrainian enterprises were recognized as operating in market conditions. At the same time, the commission used an artificial method for determining prices for gas and electricity for Ukrainian producers,” Oleg Ryabokon, managing partner of the law firm Master and Partners, told Kommersant. “The commission considered that the state-regulated price "Electricity prices in Ukraine are significantly lower than in Europe, and gas prices (in 2004-2005 - Kommersant ) were determined according to a barter agreement with Gazprom." As a result, when calculating the cost of production of Ukrainian pipes, the European Commission used gas and electricity prices in Romania. It is noteworthy that in relation to Russia, only the price for gas is determined to be non-market; prices for electricity there are recognized as market prices.

However, as Ukrainian officials emphasize, the figures proposed by the European Commission are preliminary, and the Cabinet of Ministers will try to defend a lower duty rate for enterprises. “The Ukrainian side has received materials from the investigation conducted by the EU on seamless pipes. We have until March 19-20 to present our arguments, worked out by the Ministry of Economy and the Ministry of Industrial Policy with the participation of Ukrainian manufacturers,” Sergei Kryuchkov, head of the Ukrainian delegation to the EU, told Kommersant.

VYACHESLAV Kommersant-SADOVNICHY, ALEXANDER Kommersant-CHERNOVALOV

It's all about the seams