Digital Transformation Ministry considers Kyiv Court's decision to impose duties on wire imports unjustified

KYIV. Nov 10 (Interfax-Ukraine) – The Ministry of Digital Transformation of Ukraine considers a decision of the District Administrative Court of Kyiv dated October 28, 2021, which opened up the possibility of imposing a non-market duty on imported wire products in the amount of more than 20%, to be groundless.

This was announced by Yuriy Matsyk, Director of the Digital Infrastructure Development Directorate of the Ministry of Digital Transformation, during the UIA press conference "The Unreformed Judicial System Disrupts the Digitalization Program of Ukraine," held in Kyiv on Wednesday.

The lawsuit was filed by PJSC Odeskabel and PJSC Pivdencable (Yuzhcable) (in total they produce over 50% of these products in Ukraine), which did not agree with the cancellation of the decision of the Interdepartmental Commission on International Trade on the imposition of special measures for import of cables into Ukraine, regardless of the country of origin and export.

Matsyk, in particular, noted that the imposition of duties on import of cables will lead to the refusal of some providers to fulfill contracts or to shift the growth of their costs onto citizens.

"The government has launched an Internet subvention program. In 2021, UAH 900 million were allocated from the state budget for more than 1 million citizens who live in 3,000 villages to get access to high-speed Internet and more than 6,000 social institutions to join modern communications. As of today, agreements have been signed for 2,650 villages, 340 have already been connected. Now the Internet subvention project is in the most active phase of network construction. Mobile operators, in turn, are implementing a project to cover territories with 4G. And during the active development of digital infrastructure, the court, by its decision, reduces its efficiency, increasing prices. This means that some providers, who did not purchase materials in advance, will refuse to fulfill contracts or shift the growth of their expenses onto citizens who order the Internet at their homes," he said.

Matsyk also added that the court must provide arguments that led to the conclusion that there was an obvious risk of harm to cable manufacturers.

In addition, speaking about Odeskabel and Pivdencable, board member of the Ukrainian Internet Association (UIA) Mykola Kozak said during the press conference that these enterprises do not cover the needs of the domestic market.

"Moreover, Odeskabel exports about 50% of its cables, and most of them to Russia," he added.

"We insist that the court, the commission, and the ministries consider all information from all sides. Until today, this has not been done […] We appeal to the interdepartmental commission and the Ministry of Economy, which decides to introduce the duty or not. We will also to send proposals to the Verkhovna Rada so that this issue is considered at the Verkhovna Rada committee and that there are hearings on this issue," UIA Board Chairman Oleksandr Savchuk said.

As reported, the Interdepartmental Commission on International Trade (ICIT), by a decision of October 11, 2021, canceled its decision of April 23 this year on the introduction of the 23.5% special duty on imported wire products, which was to enter into force in mid-October.