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Notice

Final Results of Inquiry Into Ukraine's Status as a Non-Market Economy Country.

Action

Final Results

Summary

Ukraine has implemented economic and institutional reforms since gaining independence in 1991. The government of Ukraine (“GOU”) has undertaken substantial reforms relating to the factors examined by the Department of Commerce (“the Department”) under section 771(18)(B) of the Tariff Act of 1930, as amended (“the Act”). See memorandum to David Spooner from Lawrence Norton, Shauna Lee-Alaia, and Anthony Hill, Decision Memorandum Regarding Ukraine's Status as a Non-Market Economy Country for Purposes of the Antidumping Duty Law Under a Changed Circumstances Review of the Antidumping Duty Order on Carbon and Certain Alloy Steel Wire Rod from Ukraine (February 16, 2006) (“Decision Memorandum”).

Based on the preponderance of evidence on reforms in Ukraine to date, analyzed as required under section 771(18)(B) of the Act, the Department determines that (1) revocation of Ukraine's non-market economy (“NME”) status under section 771(18)(B) of the Act is warranted, and (2) the effective date of this decision is February 1, 2006. Accordingly, Ukrainian producers and exporters will be subject, to the antidumping rules applicable to market economy countries with respect to the analysis of transactions occurring on or after February 1, 2006.

 

Table of Contents Back to Top

EFFECTIVE DATE: Back to Top

February 1, 2006.

FOR FURTHER INFORMATION CONTACT: Back to Top

Lawrence Norton or Shauna Lee-Alaia, Office of Policy, Import Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington DC, 20230; telephone: 202-482-1579 or 202-482-2793, respectively.

SUPPLEMENTARY INFORMATION: Back to Top

Background Back to Top

The Department has treated Ukraine as an NME country in all past antidumping duty investigations and administrative reviews. See, e.g., Final Determination of Sales at Less Than Fair Value: Carbon and Certain Alloy Steel Wire Rod from Ukraine, 67 FR 55785 (August 30, 2002); Final Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products from Ukraine, 66 FR 50401 (October 3, 2001); and Final Determination of Sales at Less Than Fair Value: Steel Concrete Reinforcing Bars from Ukraine, 66 FR 1857 (April 11, 2001). A designation as a NME remains in effect until it is revoked by the Department. See section 771(18)(C)(i) of the Act.

On April 2, 2005, the GOU's Ministry of Economy and European Integration requested that the Department conduct a review of Ukraine's status as a NME country within the context of a changed circumstances review of the antidumping duty order on carbon and certain alloy steel wire rod from Ukraine. In response to this request, the Department initiated a changed circumstances review in order to determine whether Ukraine should continue to be treated as a NME country for purposes of the antidumping law, pursuant to sections 751(b) and 771(18)(C)(ii) of the Act. See Initiation of a Changed Circumstances Review of the Antidumping Duty Order on Carbon and Certain Alloy Steel Wire Rod from Ukraine, 70 FR 21396 (April 26, 2005).

In its notice of initiation, the Department invited public comment on Ukraine's ongoing economic reforms. Extensive initial and rebuttal comments were received on July 11, and August 31, 2005, respectively. On January 12, 2006, the Department requested further comment on Ukraine's reforms and extended the deadline for completion of the proceeding to February 16, 2006. See Changed Circumstances Review of the Antidumping Duty Order on Carbon and Certain Alloy Steel Wire Rod from Ukraine: Opportunity to Comment on the Status of Ukraine as a Non-Market Economy Country and Extension of Final Results 71 FR 2904 (January 18, 2006). These comments have been made available to the public on the Import Administration Web site at the following address: http://ia.ita.doc.gov/. In addition, the Department has compiled and analyzed information regarding Ukrainian economic reforms from independent third-party sources such as the International Monetary Fund, the World Bank, and the European Bank for Reconstruction and Development.

Ukraine's currency, the hryvnia, is freely convertible on the current account and is subject to market forces. Employees and management may freely negotiate wages, and workers have the right to unionize and engage in collective bargaining. Foreign direct investment is encouraged by the GOU in almost all sectors of the economy, and the law afford foreign and domestic investors equal treatment. Ukraine's efforts toward privatizing the economy have been substantial. At least 65 percent of Ukraine's gross domestic product is in the hands of the private sector, and there are relatively few large state-owned enterprises remaining. Land, including land for agricultural use, is privately held, and foreign investors may own the land on which their investments are located. The GOU has withdrawn from its previous role as the primary resource allocator in the economy by privatizing virtually the entire banking sector and eliminating most price controls. Additionally, Ukraine is in the process of joining the World Trade Organization.

Notwithstanding Ukraine's substantial progress, several aspects of Ukraine's economy require additional reform. Foreign direct investment, while increasing, has been very low. Ukraine should enhance the mechanisms for trade in land, particularly agricultural land. Ukraine continues to have a very difficult business environment, due to excessive government regulation, outdated legislation and corruption. In particular, small and medium-size enterprise growth and increases in foreign investment are hampered by Ukraine's difficult business environment.

Overall, though, given the significant reforms discussed above and in the Decision Memorandum, Ukraine warrants designation as a market- economy country, effective February 1, 2006.

Dated: February 16, 2006.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. E6-2673 Filed 2-23-06; 8:45 am]

BILLING CODE 3510-DS-S

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