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Russia to Expand Food Ban to Ukraine After Kiev Joins EU's Russia Sanctions

Ban will come into effect January 1st

Originally appeared at bne IntelliNews

Russia will impose a food embargo on Ukraine following Kyiv's decision to join international sanctions against Russia, Economy Minister Alexei Ulyukayev told Rossiya 24 television channel. The embargo is scheduled to come into effect on January 1, 2016.

"Since Ukraine joined in the sanctions against the Russian Federation - economic and financial - we have resolved to introduce protective measures in the form of food embargoes," Ulyukayev told the channel, TASS news agency reported on November 19.

The minister warned that some European producers may also be affected as Russia will protect its market from an uncontrolled inflow of goods from EU via the customs territory of Ukraine.

The Ukraine-EU Association Agreement that establishes free trade between Ukraine and the 28-country bloc will also come into force on January 1. Russia failed to negotiate any special conditions for its goods and has responded with its plan for a food embargo and higher duties on Ukrainian products. 

Ukraine's losses from retaliatory Russian measures can amount to about $600mn, Prime Minister Arseny Yatsenyuk told a government meeting in Kyiv on November 18. If Kyiv also raises duties, the losses of Russian exporters will be insignificant as Ukrainian duties are generally much lower. 

Russian consumers also may not feel the effect of the embargo because the share of Ukrainian goods on Russian market is already low. Imports of fruit and vegetables fell 20-fold to $6mn since relations between the countries deteriorated in 2014, and imports of cheeses by more than 30 times to $3mn.

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