Business news from Ukraine

Ukrainian Parliament adopts law criminalizing smuggling

The Verkhovna Rada has amended the Criminal and Criminal Procedure Codes of Ukraine to criminalize smuggling of goods and excisable goods, which is one of the conditions for the last tranche of the EU’s EUR 1.5 billion macro-financial assistance to Ukraine.
According to MP Yaroslav Zheleznyak (Holos faction), the committee’s version of the draft law was adopted, which was amended in accordance with the letters from the Ministry of Finance that the business insisted on.

“1) It is proposed to raise the thresholds for smuggling 5 times. 2) The thresholds for excisable goods are to be raised by 2 times. 3) The entry into force (criminalization) of commodity smuggling is postponed until mid-2024. As I said, this is the deadline under the (memorandum with the) IMF on the BES reboot,” the MP listed the changes.

He added that the numerous wishes of the business community have also been taken into account, and that actions can only be classified as a crime if there is intent.

“Possible cases of prosecution under ‘smuggling’ articles for submitting documents with false information have been significantly limited – in the amended version, they must be the basis for the movement of goods, be subject to mandatory declaration under customs law, and have an impact on determining the amount of customs payments or compliance with non-tariff regulation measures,” Zheleznyak said.

During the voting, no amendments were made to the text submitted by the committee to the Rada for the second reading, but the text itself is not yet available on the parliament’s website.

According to the representative of the relevant committee, Oleksandr Bakumov (Servant of the People), the threshold for criminal liability for smuggling is set at UAH 6.71 million, which is 50 times higher than in the draft law adopted as a basis (UAH 113.5 thousand – IF-U). He added that the threshold for smuggling excisable goods (except for electricity) has been increased by “thirty-three and three and a half times” compared to the original draft (UAH 56.75 thousand).

Members of the European Solidarity and Batkivshchyna parties, who criticized the draft law, called the main problems of the law the presence of law enforcement agencies in the customs control zone with the addition of the Bureau of Economic Security (BES) and the unresolved problems that led to the adoption of the law on smuggling decriminalization in 2011.

“Ukraine is the only country in Europe and in the World Customs Organization whose customs authorities are not vested with pre-trial investigation functions… We could have left only what is transported outside the customs posts to be considered smuggling,” says MP Nina Yuzhanina (European Union). According to the current legislation, only the illegal transportation of cultural property, poisonous, potent, explosive substances, radioactive materials, weapons or ammunition, parts of firearms, as well as special technical means of covertly obtaining information is considered smuggling.

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