Secretariat questions compliance of local content requirements in Ukraine with Energy Community rules
The Energy Community Secretariat today sent an Opening Letter in Case ECS-7/13 against Ukraine concerning the so-called local content clause in the Electricity Law of Ukraine. Under this clause, eligibility for feed-in tariffs for investments in renewable energy depends on the fulfilment of minimum shares of goods and works of Ukrainian origin (local content). In the Opening Letter, the Secretariat takes the preliminary view that this clause violates Directive 2009/28/EC on the promotion of the use of energy from renewable sources, as well as Article 7 of the Treaty prohibiting discriminatory treatment.
The local content clause has been criticized in the past by investors, the European Union as well as international financial institutions alike. Under the WTO Agreement, a similar clause applied by Canada was declared non-compliant in 2013. The Secretariat is aware of the ongoing debate inside Ukraine to reform the local content requirements and will support that process in the course of the discussions with the Ukrainian authorities.
By sending an Opening Letter, the Secretariat initiates a preliminary procedure, the purpose of which is giving Ukraine the possibility, within two months, to react to the allegation of non-compliance with Energy Community law, and enabling the Secretariat to establish the full background of the case.
According to Articles 6 and 16 of the Rules of Procedure for Dispute Settlement, interested parties may be granted access to the case file and may submit written observations on the present case to the Secretariat within one month from 2 October 2014. All requests for information on this case should be addressed to the Deputy Director and Legal Counsel at firstname.lastname@example.org or +43 1 535 2222 24 or +43 1 535 2222 24 and should make reference to the case number ECS-7/13.