Why did the Moldavian Metallurgical Works fell under sanctions?

This year, Ukraine again extended the export duty on ferrous scrap from 2016, extending from 30 euros per ton to 42 euros. The relevant law on reducing scrap shortages on the domestic market was adopted by the Verkhovna Rada on May 15, 2018. The metallurgical lobby motivated the need for such a measure, first of all, for the needs of the defense industry and the restoration of infrastructure. But this was not enough. And instead of market mechanisms, political instruments went into progress.

On the eve of the adoption of the law, on May 2, the decision of the National Security and Defense Council of Ukraine on the application of personal economic sanctions against individuals and legal entities involved in Russian aggression against Ukraine appeared. They were put into effect by the decree of the President of Ukraine on May 14, 2018. At the tail of the list of 756 enterprises located mainly in Russia, one of the largest consumers of Ukrainian scrap today was OJSC "Moldovan Metallurgical Plant" (OJSC "MMZ"), located on the territory of Transdniestria in the city of Ribnitsa.

Economic sanctions have been imposed for a period of three years. These include restrictions on trading operations, suspension of implementation of economic and financial obligations, prohibition on asset management and payment of dividends. Consequently, the plant not only lost the opportunity to purchase scrap in Ukraine, but also ship its finished products to Ukrainian buyers. The restrictions also affected even the transit of factory products through Ukraine. That is, supplies to traditional markets of European countries, which were formed for decades. Although there is no such item in the list of prohibitive measures.

The official explanation why OJSC MMZ fell into the sanction list of Russian enterprises - there is no. From the point of view of the metallurgical lobby in the parliament, the plant was blamed for purchasing too much scrap in Ukraine and located on the territory controlled by Russia.

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