(1)

The Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part (2) (the ‘Association Agreement’) constitutes the basis of the relationship between the Union and Ukraine. Title IV of the Association Agreement, which relates to trade and trade-related matters, has been applied provisionally since 1 January 2016 (3). In the preamble to the Association Agreement, the Parties thereto expressed their desire to strengthen and widen relations in an ambitious and innovative way.

(2)

In order to enhance the economic and political reform efforts undertaken by Ukraine, and to support and accelerate the development of closer economic relations with the Union, it is appropriate and necessary to increase the trade flows concerning the import of certain agricultural products and to grant concessions in the form of autonomous trade measures for certain industrial products in line with the acceleration of the elimination of customs duties on trade between the Union and Ukraine.

(3)

The Commission has analysed the factual rationale for selecting the products that are to be subject to this Regulation, in particular the potential impact of this Regulation on small and medium-sized beneficiaries in Ukraine, and has provided an explanation thereof to the European Parliament and to the Council. The autonomous trade measures established by this Regulation should be granted for products that are beneficial in light of that analysis. Those autonomous trade measures should take the form of the following preferential arrangements: (i) zero-tariff quotas for the agricultural products listed in Annexes I and II to this Regulation in addition to the zero-tariff quotas set out in the Association Agreement; and (ii) the full removal of import duties (‘preferential customs duties’) on importation of the industrial products listed in Annex III to this Regulation.

(4)

In order to prevent fraud, the entitlement to the autonomous trade measures established by this Regulation should be conditional on Ukraine having complied with all the relevant conditions for obtaining benefits under the Association Agreement, including the rules of origin of products concerned and the procedures related thereto, as well as Ukraine's involvement in close administrative cooperation with the Union, as provided for by that Agreement.

(5)

Ukraine should abstain from introducing new duties or charges having equivalent effect and new quantitative restrictions or measures having equivalent effect, or from increasing existing levels of duties or charges or from introducing any other restrictions. In the event that Ukraine fails to comply with any of these conditions, the Commission should be empowered to suspend temporarily all or part of the autonomous trade measures established by this Regulation.

(6)

Subject to an investigation by the Commission, it is necessary to provide for the reintroduction of the Common Customs Tariff duties under the Association Agreement for imports of any products falling under the scope of this Regulation which cause, or threaten to cause, serious difficulties to Union producers of like or directly competing products.

(7)

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission enabling it to temporarily suspend the preferential arrangements established by this Regulation and to introduce corrective measures in cases where Union producers are or might be seriously affected by imports under this Regulation. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (4).

(8)

The zero-tariff quotas established by this Regulation should be administered by the Commission in accordance with Commission Implementing Regulation (EU) 2015/2447 (5), with the exception of the zero-tariff quotas for certain agricultural products, which should be administered by the Commission in accordance with Regulation (EU) No 1308/2013 of the European Parliament and of the Council (6) and the implementing and delegated acts adopted pursuant to that Regulation.

(9)

Articles 2 and 3 of the Association Agreement provide that respect for democratic principles, human rights and fundamental freedoms and the principle of the rule of law, as well as efforts to combat corruption and organised crime, and measures to promote sustainable development and effective multilateralism, constitute essential elements of relations with Ukraine, which are governed by that Agreement. It is appropriate to introduce the possibility of temporarily suspending the preferential arrangements provided for in this Regulation if Ukraine fails to respect the general principles of the Association Agreement, similarly to other association agreements signed by the Union.

(10)

The Commission's annual report on the implementation of the Deep and Comprehensive Free Trade Area, which is an integral part of the Association Agreement, should include a detailed assessment of the implementation of the autonomous trade measures established by this Regulation.

(11)

In light of the difficult economic situation in Ukraine, this Regulation should enter into force on the day following that of its publication in the Official Journal of the European Union,

(a)

Ukraine's compliance with the rules of origin of products and the procedures related thereto as provided for in the Association Agreement, in particular in Protocol I thereto concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation, and in Protocol II thereto on mutual administrative assistance in customs matters; the zero-tariff quotas and preferential customs duties on importation introduced by Article 1 of this Regulation shall apply to goods originating in or that have been shipped from a territory not under the effective control of the Government of Ukraine, if those goods have been made available to the Ukrainian authorities for examination, and if their compliance with the conditions conferring entitlement to the preferential arrangements has been verified in accordance with the Association Agreement;

(b)

from 1 October 2017, the abstention by Ukraine from introducing new duties or charges having equivalent effect and new quantitative restrictions or measures having equivalent effect for imports originating in the Union, or from increasing existing levels of duties or charges or from introducing any other restrictions, including discriminatory internal administrative measures;

(c)

Ukraine's respect for democratic principles, human rights and fundamental freedoms and respect for the principle of the rule of law as well as continued and sustained efforts with regard to the fight against corruption and illegal activities provided for in Articles 2, 3 and 22 of the Association Agreement; and

(d)

Ukraine's continued compliance with obligations to cooperate on matters related to employment, social policy and equal opportunities in accordance with Chapter 13 of Title IV (Trade and sustainable development) and Chapter 21 of Title V (Cooperation on employment, social policy and equal opportunities) of the Association Agreement, and the goals set out in Article 420 thereof.