Ukraine goes to WTO over Russian ban on booze, presidential sweets

By Alessandra Prentice and Tom Miles

KIEV/GENEVA (Reuters) – Ukraine has filed a World Trade Organization complaint challenging Russian trade restrictions on beer, vodka, juice, wallpaper and a product close to President Petro Poroshenko’s heart: confectionery.

The Economy Ministry said it was launching its third trade dispute against Russia in as many years, accusing Moscow of illegal trading practices under WTO rules.

“As a result, the export of these products to Russia has practically stopped,” it said in a statement published on Friday, .

Poroshenko, one of Ukraine’s richest businessmen, is the owner of confectionery maker Roshen which had annual pre-crisis sales of $1.2 billion.

When he was elected in 2014 he promised to sell the firm, which takes its name from the middle two syllables of his surname, although no sale has yet been made.

The complaint says Ukraine’s confectionery exports collapsed from $482 million in 2013 to around $665,000 in the first half of 2017, while juice exports to Russia fell from the equivalent of $72 million to $400,000.

The complaint, which has not yet been published by the WTO, said Russia’s bans on Ukrainian products were not substantiated by Russian laws, according to an official familiar with the text.

Russia’s ban on imports of Ukrainian sweets followed an inspection of Ukrainian-owned sweet factories by Russia’s consumer watchdog, accompanied by a representative of the main Russian competitor, the complaint said.

Inspectors had refused to sign the final inspection report, but the ban went ahead anyway, it said.

When rejecting Ukrainian juice shipments at the border, Russian customs authorities had simply crossed out stamps that said “allowed for import”.

Kiev and Moscow have each launched two trade disputes against the other at the WTO, following a collapse in relations over the annexation of Crimea in 2014 and Russian support for separatists in Ukraine’s eastern conflict.

Last September Ukraine challenged Russia over restrictions on freight transit. In May, Russia launched a wide-ranging complaint against Ukraine regarding alleged breaches of trade rules for Russian goods and services.

Ukraine’s latest complaint alleges Russia breached its WTO membership terms and WTO agreements on technical barriers to trade, health standards, and trade facilitation.

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