In accordance with the World Trade Organisation's (WTO's) accession procedure, Ukraine ratified the protocol on accession on 10 April and will become a WTO member 30 days after the effective date of ratification. The accession process was accompanied by the adoption of a number of laws and regulations in order to bring Ukrainian legislation in line with WTO requirements. The main changes of legislation that will come into force as of the date of Ukraine's accession to the WTO are outlined below.

Upon Ukraine's accession to the WTO and for five years thereafter, non-resident insurers will receive direct but limited access to the Ukrainian insurance market. In particular, Ukrainian companies will be able to obtain the following services from non-resident insurers:

- insurance of risks, related to marine transportation, commercial aviation, space rocket launches and freight (including satellites) if the insurance object is the ownership interests related to commodities being transported, and/or transport used for their transportation, and/or any responsibility arising in connection with such commodities' transportation;

- re-insurance;

- insurance mediation, such as brokerage and agent operations concerning re-insurance exceptionally dealing with insurance of risks related to marine transportation and other risks from the above-mentioned list; and

- ancillary insurance services such as consultations, actuarial risk evaluation and satisfaction of claims.

The law does not require non-resident insurers to register representative offices or branches in Ukraine in order to provide the above-mentioned services. To conclude insurance agreements with Ukrainian companies, an insurer must meet certain eligibility requirements.

After five years of following Ukraine's progress in joining the WTO, foreign insurance companies are expected to receive full access to the Ukrainian market. Those foreign insurance companies to have been granted a licence will be able to conduct insurance activity to the same extent as insurance companies, incorporated in Ukraine.

Agriculture

Conditional upon the Ukrainian Parliament's ratification of the protocol on accession to the WTO this year, agricultural commodity producers from 1 January, 2009, will lose their current VAT privileges and will have to pay VAT on general basis. Currently, Ukrainian tax law provides for a special taxation regime (6% and 9% VAT, respectively) for agricultural forest and fishing industries. On top of that, the VAT amounts collected will be directed to the state budget of Ukraine and not to processing enterprises in the form of donations to agricultural commodity producers for distributed milk and milk products, meat and meat products, as done presently.

From the day of Ukraine's accession to the WTO, minimum purchase prices of milk will be abolished, along with the quota for milk production and sale by agricultural commodity producers, the maximum threshold for trade on milk products increases. Also, the provisions of the law on milk and milk products, regarding export support for such products and the Fund on Granting Assistance to Development of Milk and Milk Products' Markets will lose their effect.

Ukraine will introduce an annual quota from 1 January till 31 December, 2009, for raw sugar imports N 260,000 tonnes with an import duty rate of 2% of its customs value. It should be noted that in accordance with the report produced by the WTO working group, Ukraine undertook to increase the quota to 267,800 tonnes per year within two years of its accession. From 1 January, the reduced export duty rates on live cattle and raw leather will begin to apply. In the future, the duty rates on these commodities will gradually diminish to 10%-20% depending on the commodity type. Upon Ukraine's accession, the export duty on oil seed (sunflower flax and false flax) will be cut from 17% to 15% and will diminish by 1% every year until it reaches a 10% threshold. Also, upon Ukraine's accession, indicative prices on oil seed will be cancelled; such prices currently constitute the minimum export prices.

Scrap metal export

Exports in the form of raw materials (alloyed iron and non-ferrous scrap, products of primary metallurgical processing shaped as bars, blocks, plates and other intermediate products, made of unrefined copper) are currently forbidden in Ukraine.

On becoming a WTO member, Ukraine will be forced to allow the export of these raw materials. For the purpose of export limitation, a 30% export duty on alloyed iron, nonferrous scrap and intermediate products was introduced. As of next year, the export duty will be gradually decreased over five years.

Over this five-year period there will be another limitation in relation to people authorised to export alloyed iron, non-ferrous scrap and intermediate products with their utilisation. Only manufacturing metallurgical processing enterprises may export these commodities, provided that they possess an export certificate of quality.

The export duty on iron scrap and wastes will be reduced from E30 (£24) to E25 (£20) per tonne, contingent upon Ukraine's accession to the WTO. For six years thereafter, the export duty will be gradually reduced to E10 (£8) per tonne and this rate will continue for the future.

Banking

Upon Ukraine's accession to the WTO, foreign banks will have the right to open branches in Ukraine, which will carry out banking activity, provided that:

- the foreign bank is incorporated in a state engaged in international cooperation in the field of prevention and counteraction of the laundering of illegally received profit and terrorism financing; it should also cooperate with the Financial Action Task Force;

- banking supervision in the state where the foreign bank is incorporated meets the basic standards of
effective bank supervision, according to the Basel Committee on Bank Supervision standards;

- agreement on cooperation in the field of bank supervision and harmonisation of the respective standards and terms is in force between the National Bank of Ukraine and a banking supervisory authority of the state, where such foreign bank is incorporated;

- the Ukrainian branch of the bank's capital at the date of its accreditation is not less than E10m; and

- a guarantee from a foreign bank on the non-conditional performance of obligations arising from its branch's activity in Ukraine is provided.

To begin their activities in Ukraine, branches of foreign banks shall be accredited with the National Bank of Ukraine.

Intellectual property law

New official fees concerning intellectual property (IP) rights protection will come into force in Ukraine as a result of WTO membership. The current procedure of payment of the official fees in the sphere of intellectual property rights protection makes the amount of the official fees conditional upon the annual gross domestic product (GDP) per capita in the country of the applicant's (owner's) residence.

According to the changes the equal fees will be established for all applicants and owners of IP rights, regardless of the country of their residence. The amount of fees will be considerably higher than the current fees for residents of countries with annual GDP of less than $3,000 (£1,500), but still they will be lower than those fees payable by residents of other countries.

Publishing business

Five years after Ukraine's accession to the WTO, the prohibition on establishment and operation of organisations dealing with the distribution of printed output with more than 30% foreign investment share in the share capital will be cancelled.

Boris Lobovyk is a partner at Konnov & Sozanovsky in Kiev.