Foreign trade and economic activity in Ukraine

Foreign trade activity are activity of Ukrainian and foreign subjects of the economic activity, constructed on mutual relations between them and taking place both in territory of _Ukraine, and behind its limits.

One of the basic legislative documents in the field of foreign trade activities is the Law of _Ukraine from 16.04.91 N 959-XII "On foreign trade activity".

The law enters legal regulation of all kinds of foreign trade activities in _Ukraine, including foreign trade, economic, scientific cooperation, specialization and cooperation in the field of manufacture, science and technique, granting various services, etc.

The given Law defines main principles of conducting foreign trade activities, kinds of subjects of foreign trade activities, and also objectives of such activity. Also the Law establishes principles of state regulation of foreign trade activities, bodies of state regulation, etc.

Being guided by positions of the Law of _Ukraine "on foreign trade activities" it is necessary to allocate main principles on which foreign trade activities are based. The law defines, that the Ukrainian and foreign subjects are guided by following principles:

· Principle of the sovereignty in foreign trade activities;

· Principle of freedom of the external economic business;

· Principle of legal equality and nondiscrimination;

· Principle of rule of the law;

· Principle of protection of interests of subjects of foreign trade activities;

· Principle of equivalence of an exchange, inadmissibility of dumping import and export of the goods.

All subjects of foreign trade activities of _Ukraine have the right to open rep offices in territory of other states according to laws of these states.

Foreign subjects of economic activities who carry out foreign trade activities in _Ukraine, have the right to opening of the rep offices on territories of _Ukraine. Registration of rep offices is carried out by the Ministry of Economy of _Ukraine within sixty working days from the date of granting by the foreign subject of economic activities of documents on registration.

State regulation of Foreign trade activities

The exchange of the goods between the different countries is carried out on the basis of the international division of labour, that is specialisation of the separate countries on manufacture of certain kinds of production for satisfaction of requirements of the world market. Specialisation of the countries developed throughout many centuries, originally it depended on natural advantages, now it is caused by a level of development of technique, qualification of the population, stability of currency system and many other things factors. All states of the world by various means regulate the foreign trade activities.

The basic lines of state regulation of foreign trade now is application in interaction of two various types of a foreign trade policy of-protectionism and liberalisation. Now there is a considerable quantity of means of the external economic regulation that speaks expansion of a circle of the countries-participants of international trade and necessity for each country to have tools of optimisation of its participation in the international barter.

Foreign trade policy subdivided into following basic groups: tariff (custom duties) and non-tariff (quantitative restrictions, other non-tariff methods, trading - political methods of stimulation of export, trading contracts and agreements).

Tariff regulation

Custom duties are a list of the customs duties with which the goods are assessed at their import and export. The customs duties represent some kind of the tax raised at crossing by the goods of customs border the one who these goods import or take out. The customs duties raise goods cost as the exporter (importer) it is compelled to compensate the expenses on payment of the duty at the expense of increase in the price at the goods. High import duties make foreign goods noncompetitive in home market and used for protection of national manufacturers of the similar goods.

Duties: ad value - raised in percentage of goods cost; specific - raised in the form of a certain sum of money from weight, volume or goods piece; mixed, a simultaneous application ad value and specific duties.

According to this law the Custom duties of _Ukraine are systematized according to the Ukrainian classification of the goods of foreign trade activities - the list of rates of the import customs duties raised from the goods which are imported on customs territory of _Ukraine.

The Ukrainian classification of the goods of foreign trade activities (national variant of the qualifier of the Commodity nomenclature of foreign trade activities) which is based on Harmonized system of the description and coding of the goods of 2007 is put in a basis of the commodity classification scheme of Custom duties of _Ukraine (the commodity nomenclature).

The duty which is subject to payment, pays off customs body under the rates of the tariff operating at date of giving of the customs declaration.

The custom duties rates of _Ukraine are divided as follows:

· Preferential rates, including clearings of duty payment, are applied to the goods occurring from the countries, entering together with _Ukraine in the customs unions or forming special zones or to which the special mode according to the international contracts is given, and also an origin from a number of developing countries;

· Preferential rates are applied to the goods occurring from the countries, using on _Ukraine by a most favored nation treatment;

· Full rates are applied to other goods.

Non-tariff regulation

Quantitative restrictions, other non-tariff methods, trading-political methods of stimulation of export, trading contracts and other non-tariff methods of regulation of foreign trade activities. Quantitative restrictions include quota and licensing.

Quotas are limiting volumes of the certain goods which are authorised for importing to (export) on territory of the country during certain term. Quotas are individual, limiting import (export) in one concrete country; group, establishing volume of import (export) in certain group of the countries, and also global when import (export) is limited without instructions of the countries on which this restriction extends.

Licences are permissions to import (export) of the goods during any time, given out by competent bodies (Ministry of Economy).

Licences are general which represent permissions to import (export) operations with the certain goods during all period of validity of a mode of licensing. Besides, licences are individual, resolving to one subject of enterprise activity realisation of one import (export) operation on the licensed goods. Licences establish volumes of the imported (taken out) goods in quantitative expression when it is authorised to import to (take out) certain quantity of the goods, or cost expression when under the licence it is possible to import to (take out) the goods for the certain sum.

Quotas and licenses limit independence of businessmen concerning a choice of the market and trade volume, however, these kinds of the external economic regulation have gained now the greatest distribution.

Except quantitative, non-tariff methods of the foreign trade regulation complication of customs procedures, increase in quantity of the necessary documentation, increase of requirements concern quality of packing and marks, an establishment phytosanitary, veterinary and other kinds of the sanitary and ecological control. Various taxes to import and export concern not tariff methods over the duty, the currency restrictions connected with reception of the permission to use of currency for import purchase, etc.

The state can take measures also on unfair competition suppression at foreign trade activities realisation, in particular, dumping that sales of the goods under the prices below international commodity market. The establishment of the facts of a dumping in _Ukraine, for example, is done by the claim to the Ministry of Economy of _Ukraine or the State committee on the prices. In case of an establishment of the fact of a dumping to the Ukrainian or foreign businessmen the antidumping duty can be applied.

Except antidumping duties can be applied as well countervailing duties which are raised in case of an establishment of that fact, that the exporter by goods manufacture used the state grants that has allowed it to underestimate the price for the goods.

Measures of stimulation of export have for an object encouragement of the national enterprises-exporters. These measures include subsidizing (grants), preferential crediting, the state insurance of export (when the exporter has an opportunity to sell the goods and the risk of non-payment by the importer of the put sum incurs the state), carrying out of a special currency policy (maintenance of the underestimated rate of national currency), tax privileges to exporters (clearing of a part of profit taxes or the income of payment of the tax to the added cost), information, consulting service, a professional training for foreign trade, diplomatic support of exporters. These measures are applied usually in a complex, therefore it is necessary for exporter to be guided in stimulation system to take advantage of possible privileges.

The legislation of the states can provide application of reciprocal measures on discrimination and unfriendly actions from foreign countries which limit the rights and interests of businessmen of the given state. These measures can provide application of licensing and quotas, tax to import of the goods from the given country, deprivation of the country of a most favoured nation treatment or the special mode full or partial prohibition (embargo) on trade with the given country.