For the first time since Ukraine became World Trade Organization (WTO) member, it has claimed that the WTO Dispute Settlement Body assemble a panel in order to settle a debate with Armenia over less advantageous conditions for the import of Ukrainian tobacco and alcohol than those of national origin.

The claim was posted on the WTO official web site.

According to the WTO, Ukraine asks to place this claim on the agenda of the next meeting of the WTO Dispute Settlement Body that will take place on September 21, 2010. As according to Ukraine representative, it was impossible to solve this debate through consultations.

“In a case a country doesn’t want to resolve the issue or avoids consultations, a WTO member that has placed a claim for the consultation has the right, under Article 4.3 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, to request without delay the formation of a panel to settle a debate,” Andrii Zablotskyi, an associate from the Volkov Koziakov & Partners law firm, stated to Interfax-Ukraine.

Andrii Zablotskyi also stated that after examination, the panel provides recommendations to the county which has broken the WTO agreements under which the country should bring its legislation in line with the WTO standards.

On July 20, 2010, Ukraine claimed consultations with Armenia concerning Armenia’s measures that affect the importation and internal sale of tobacco products and alcoholic beverages.

Ukraine affirms that Armenia’s law “On Presumptive Tax for Tobacco Products” of March 24, 2000, imposes discriminative internal taxes on imported tobacco products and is therefore in violation of Article III of the GATT 1994 and paragraph 1.2 of Armenia’s Protocol of Accession to the WTO.

Besides, the law also lays customs duties on such imported tobacco products at a rate of 24% that is higher than Armenia’s WTO bound tariff rates of 15%.

According to the Ukrainian side, for a small amount of products, including cigarettes, Armenia lays a single, fixed payment that includes both internal taxes such as VAT (value added tax) and the applicable customs duty. Armenia requests that fixed payments at the rates of AMD 6,500 ($17.7) per 1,000 imported cigarettes and AMD 4,750 ($12.9) per 1,000 like domestic cigarettes conformable to Article 3 of the Tobacco Charges Law.

“This fixed price on cigarettes at the above rates for imported and domestic cigarettes is in violation of Armenia’s obligations of supplying national regime to imported products and brings to taxation customs duties in plenty of Armenia’s tariff binding of 15% ad valorem for tobacco products as set forth in Armenia’s Schedule of Concessions,” Ukraine announces.