Duty on scrap metal exports from Ukraine to Turkey to remain even after possible ratification of Free Trade Agreement – MP

According to Dmitry Kisilevsky, Deputy Chairman of the Verkhovna Rada Committee on Economic Development, the export duty on scrap metal from Ukraine to Turkey in the amount of 180 euros per ton will apply even if the Free Trade Agreement (FTA) between these two countries is ratified.

During a working meeting on March 28, attended by representatives of the metallurgical sector, government officials and MPs, the committee discussed the impact of the FTA on Ukraine's steel industry. The focus was on maintaining the current export duty on scrap metal, given Turkey's long-standing role as the largest importer of Ukrainian raw materials.

“Currently, the duty of 180 euros applies to all countries except the EU countries, and will remain in force for Turkey even after the agreement is signed. The relevant provisions are already spelled out in the agreement. Trade Representative of Ukraine, Deputy Minister of Economy Taras Kachka confirmed this point of view,” Kisilevsky noted.

He also added that official clarifications would be provided, including to customs services that had previously acted contrary to their authority to maintain state revenues.

Kisilevsky criticized the 2023 decision of the State Customs Service, which set a reduced tariff of 10 euros instead of 180 euros for exports to Moldova. He pointed out that the only consumer of scrap metal in Moldova is in Transnistria, which calls into question the appropriateness of reducing the duty. He called on law enforcement agencies to investigate this case, since it not only damages Ukraine's budget, but can also be seen as support for the enemy.

Another important issue that was raised was the circumvention of the duty through EU transit routes. In 2023, about 300,000 tons of ferrous scrap metal were exported from Ukraine to the EU at a zero duty rate, and most of it was subsequently redirected to Turkey and other countries, avoiding the payment of 180 euros per ton. This resulted in a loss of state revenue of about 2 billion hryvnia.

“If this scrap were processed in Ukraine, it would create greater added value, increase tax revenues and strengthen the defense funding of the Ukrainian armed forces,” Kisilevsky emphasized. He called for consultations with European partners to track the final destination of the raw materials to prevent further leakage of Ukraine's strategic resources.

Ukraine's Deputy Economy Minister Taras Kachka previously said that ratification of the Free Trade Agreement with Turkey and updating trade agreements with EFTA are among the top economic priorities for 2025. However, representatives of Ukraine's light industry sector have called for postponing ratification of the Free Trade Agreement with Turkey until the conflict is over, citing concerns about competition from Turkish manufacturers.

Ukraine and Turkey held 12 rounds of negotiations from 2011 to 2022, resulting in the Free Trade Agreement signed by Ukrainian Prime Minister Denys Shmyhal and Turkish Trade Minister Mehmet Mus in February 2022. The agreement will enter into force after its ratification by both parliaments and completion of the necessary diplomatic procedures.

However, in light of the changes in the economic situation in Ukraine, current negotiations with Turkey are focused on the implementation of transition periods for certain industries, in particular light industry.