UPDATE2: Kiev to prohibit Russian imports, adjust duties in retaliation

(Rewrites headline, adds details in first four paragraphs)

KIEV/MOSCOW, Dec 30 (PRIME) -- The Ukrainian government will prohibit Russian imports and adjust customs duties for the country’s goods to retaliate for Moscow’s agricultural ban and suspension of a free trade agreement with the Commonwealth of Independent States (CIS), Ukrainian Prime Minister Arseny Yatsenyuk told the government on Wednesday.

“Today the government will adopt two rulings regarding counteractions to illegal actions of the Russian Federation. The first ruling prohibits imports of products from Russia to the customs area of Ukraine. And the second ruling is on import duties on products from Russia,” he said.

The rulings will be announced after the Russian restrictions come in force.

On Tuesday, Ukraine’s President Pyotr Poroshenko signed a law that allows the government to impose economic sanctions on Moscow in retaliation.

KIEV’S BAN NO THREAT

Russian First Deputy Economic Development Minister Alexei Likhachyov said in an interview with Rossiya 24 TV channel that if Kiev bans all agricultural imports from Russia, it will not incur significant losses to producers.

“If Ukraine fully stops Russian exports of agricultural products, in my point of view, it will have no fundamental consequences for Russian agricultural producers,” he said.

Russian Prime Minister Dmitry Medvedev said that Russia introduces customs duties on Ukrainian products and an agricultural ban on import from the country from January 1, while Kiev supports anti-Russian sanctions.

The Russian ban on Ukrainian agricultural imports is unlikely to speed up inflation significantly, Lukhachyov also said, adding that the share of Ukrainian imports on the Russian market for agricultural products is very small.

On December 16, President Vladimir Putin signed a decree to suspend a free trade agreement between the CIS and Ukraine from January 1, 2016.

The CIS comprises Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Uzbekistan.

UKRAINIAN TRANSIT FEARS

Ukraine’s Economic Development and Trade Ministry said in a statement the country expects Russia to restrict transit to the third countries from 2016.

“As part of changes in the trade and economic relations between Ukraine and the Russian Federation expected to come in force from January 1, 2016, we inform about a threat that the Russian Federation may limit transit of Ukraine-originated products through its territory to third countries (Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, China and other countries),” it said.

The authority also expects that Moscow will strengthen control over transit of Ukrainian goods, import of which is prohibited in Russia.

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