EU-Ukraine Association Agreement -chase has started

• Transport & Logistics

On the 16th of September, 2014, Ukraine ratified its Association Agreement with the European Union and the European Atomic Energy Community as a clear sign of the country’s strive to put an end to the Iron Curtain’s heritage. By aligning Ukraine’s laws and practices with Western standards, the country strives to open its doors and establish a high-class transport & logistics sector.

This unique international agreement is aimed at deepening the integration between the EU and Ukraine in the sphere of politics, trade, culture and security. It has been signed in two steps. First, signatures under the political part were placed on the 21st of March, 2014, encompassing in particular the preamble, general principles, political dialogue and association, the much needed reforms, cooperation and convergence in foreign and security policies as well as a set of institutional and general provisions. The economic (final) part was signed three months later on the 27th of June, 2014, covering issues relating to justice, freedom, security, trade, economic, financial and sectorial cooperation together with regulations to combat fraud.

The agreement came into force on the 1st of November, 2014, while the provisional application of the ‘Deep and Comprehensive Free Trade Area’ (DCFTA) part has been delayed until January 1st, 2016, as an overall effort towards a comprehensive peace process in Ukraine (respecting its territorial integrity and right to decide its own destiny), although trade preferences from the EU have been prolonged till this year’s end.

The core

The chief aim of the agreement is for Ukraine to enjoy a well-balanced law, which in turn makes it possible to execute a change from a 1980s style economy into a more modern, competitive and safer one. Protectionism is not allowed (quantitative restrictions) under the agreement, the same holds true for subsidies to domestic products and price control. Ukraine will also have transparent government procurements, whilst tariff and non-tariff barriers will be eliminated (incl. unnecessary sanitary and phytosanitary measures and technical barriers to trade) as per the requirements of the World Trade Organization and the General Agreement on Tariffs and Trade.

Apart from international level cooperation between EU Member States and Ukraine, the agreement intends to continue the firm collaboration Ukraine has on the regional level in terms of transport like the ‘Eastern Partnership Panels’, the ‘Europe-Caucasus-Asia Transport Corridor’ and the ‘Baku Process’.

Overall, implementation of the norms of the EU legislation and the development of a free trade zone will be gradual, with the so-called transition periods for specific areas ranging from 18 months to 10 years. On the 17th of September, 2014, the Ukrainian Cabinet of Ministers passed ‘Resolution No. 847-p’ according to which an enforcement plan was adopted (see Tab. 1 for a roadmap on transport-related regulations).

Other transport benefits

Apart from the overall plan prescribed in the agreement, Ukraine in the abovementioned resolution targeted also other points in order to ease the integration process’ flow. As such the country plans its accession to the ‘United Nations Convention on International Multimodal Transport of Goods’ (Geneva, May 24th, 1980) before 12.2016; adapting the state’s laws concerning the EU’s multimodal transport provisions (12.2015); and preparing a comprehensive national logistics development master plan, covering a network of logistics centres, optimizing the transportation of grains (incl. the use of inland waterways) as well as improving the whole process of transportation, all before the end of 2015. At present, the relevant ministries – working together with various associations, expert groups and non-governmental organizations – are engaged in preparing plans for the implementation of the relevant EU directives.

As we can see, the so-called winter 2013-2014 ‘Revolution of Dignity’ forced the signing of the EU-Ukraine Association Agreement. However, the adaptation and implementation process of the EU laws to the national legislative system requires a reasonable amount of time. Nevertheless, the process has started and, as the result of cooperation between Ukraine and the EU, it is expected to bring essential convergence of standards regarding the transportation of goods, provide additional investments into development and modernization of the existing infrastructure, which will in the end help to overcome the existing barriers of cross-border movement and will also be an important freight transport growth driver. In other words, Ukraine with a little help from its friends now sews the country’s new (law) sails to set on the course for the West.

Tab. 1. Timeline of EU transport-related regulations to be adopted by Ukraine

Published in Baltic Transport Journal.

Arthur Nitsevych

nitsevych@interlegal.com.ua