News date: 16 September 2019
The managing company of the holding company Belarussian Cement Company, as well as the importers of its products, namely, Belbudmaterialy-Ukraine LLC and Pylomaterialy-Service LLC, filed a claim to the District Administrative Court of Kyiv for invalidation and revocation of the Decision of the Interagency Commission for International Trade (ICIT) on the application of anti-dumping duties on imports of cement into Ukraine, in particular, cement clinkers and Portland cement originating in the Russian Federation, the Republic of Belarus and the Republic of Moldova. This was reported by the press service of the well-known Ilyashev & Partners Law Firm, which defends the interests of national producers – PrJSC Dickergoff Cement Ukraine, PrJSC HeidelbergCement Ukraine, PJSC Podilskyi Cement (CRH Ukraine Group of Companies) and PrJSC Ivano-Frankivsk Cement – as the third parties in litigation.
“The District Administrative Court of Kyiv consolidated the claims into one proceeding, – said Roman Marchenko, the Senior Partner at Ilyashev & Partners. – The Belarusian commodity producer filed a motion for interim measure by suspending the ICIT decision. The court dismissed the motion”.
It should be reminded that the decision to initiate the anti-dumping investigation was made by the ICIT on 4 July 2018. Following the ICIT’s anti-dumping investigation, carried out in full compliance with the legislation of Ukraine and the WTO law, on 21 May 2019 the ICIT issued its decision to introduce for a period of five years the final anti-dumping duties on imports into Ukraine of cement, including cement clinkers and Portland cement originating in the Russian Federation, the Republic of Belarus and the Republic of Moldova. The duty imposed on the Portland cement and clinker originating in the Republic of Belarus was set at the level of 57.03%.
“The high duty rate set by the ICIT is, in fact, protective, and confirms the fact of presence of dumped imports, – emphasizes Olena Omelchenko, the Partner and Head of International Trade Practice at Ilyashev & Partners, who represented the Ukrainian cement industry in the anti-dumping investigation. – The distortions of competition on the part of foreign manufacturers have brought Ukrainian businesses together to fight for fair trade, eliminate injury, save jobs and investments”.
According to the State Statistics Committee of Ukraine, the volume of cement imports from Belarus alone in the first half of 2019 amounted to 199.5 thousand tons for USD 10.5 million, i.e. 4.8% of the total volume in the Ukrainian market. The Cement Manufacturers Association notes that these are the strategic prospects for the industry development, as well as large domestic and foreign investments in the modernization of production, which are at stake.
“The Ukrainian full-cycle manufacturers are investing in technology development, while by imports we are financing the technological development of neighboring countries, – said Pavlo Kachur, the Head of Cement Manufacturers Association. – The past 10 years saw the development of large investment projects in the cement industry: PrJSC Ivano-Frankivsk Cement worth EUR 280 million, PJSC Podilskyi Cement worth EUR 250 million, and PrJSC Dickergoff Cement Ukraine worth EUR 80 million. In our country, the funds of enterprises are usually invested, while in the neighboring countries the modernization of facilities is carried out with a help of active state subsidies. Overcapacity in the countries of the Eurasian Economic Union is twice the domestic capacity of these countries. At the same time, Ukraine, having the raw materials for centuries to come, uses just a half of its installed cement production capacities. In case of further increase of the dumped and subsidized imports from neighboring countries and further price pressure on Ukrainian products with simultaneous increase in energy prices, more than 20-fold increase in the environmental tax rate, systematic problems with the delivery of produced cement by railway transportation together with constant increase in the cost of rail transportation, the production in Ukraine will become less attractive to international companies. The first signal of such a danger to the Ukrainian economy was the decision of one of the largest cement producers in the world – Heidelberg Cement – to terminate its business operation in Ukraine, taken in 2018”.
The anti-dumping investigations are one of the few mechanisms to protect the national market from the unfair competition on the part of foreign producers, which is envisaged by WTO law and the Free Trade Area Agreement dated 18 October 2011.