The Verkhovna Rada of Ukraine (hereinafter – the VRU) is considering Draft Law #5420 “On Amendments to the Criminal and Criminal Procedure Codes of Ukraine on Criminalization of Smuggling of Goods” dated 04/23/2021 (hereinafter – Draft Law #5420). The above draft law is currently being prepared for the second reading.
Adoption of the Draft Law No. 5420 without its finalization and without taking into account the comments expressed by the business community may harm law-abiding businesses, which today face significant problems when exporting and importing goods due to the blocking of Ukraine’s borders and the inability to carry out transportation by other means than land.
During the previous stages of consideration of Draft Law #5420 in the Parliament, Chamber Member Companies’ experts repeatedly provided comments and suggestions to the text of the document. The Chamber Member Companies’ experts are grateful to MPs and members of the relevant VRU Committees for taking into account some of the proposals of the business community (in particular, removing the article on “False Declaration of Goods” from the Draft Law #5420). At the same time, the business community reiterated its proposal to supplement the sanction of the proposed article of the Criminal Code of Ukraine (hereinafter – the CCU) with provisions on mandatory confiscation and destruction of alcoholic beverages and tobacco products that are smuggled. In addition, the Chamber Member Companies’ experts strongly oppose the wording of Article 201-3 of the CCU “Smuggling of Goods” (regarding non-taxable goods) contained in Draft Law #5420.
The Chamber Member Companies unequivocally support the government’s intentions to combat illegal schemes in customs clearance of goods, in particular, if the subject of the offense is excisable goods. Since tax revenues from excisable goods, in particular, help to fill the State Budget during the ongoing war, it is crucial to effectively combat illegal import of such products into Ukraine. In addition, the illegal export of excisable goods from Ukraine damages the reputation of our country in relations with international partners. For example, according to a recent study by KPMG, Ukraine is the second largest supplier of illegal tobacco products to the European Union (EU) market. At the same time, criminal liability for smuggling excisable goods is enshrined in the EU legislation.
At the same time, the introduction of criminal liability for smuggling of non-excisable goods in the wording proposed by the draft law will not only not contribute to the effectiveness of combating the shadow economy, but will, on the contrary, lead to numerous corruption risks and prerequisites for abuse by regulatory and law enforcement agencies, as well as illegal pressure on legally operating businesses.
In particular, the legal construction of the objective side of the crime of “moving goods across the customs border of Ukraine outside customs control or concealed from customs control” is an outdated norm of the USSR, and is also extremely vague, in fact allowing the registration of criminal proceedings in any disputable situations arising during customs control (including in the absence of criminal intent, as the current version of the draft law does not provide for an intentional form of guilt in smuggling).
Representatives of the business community sent numerous letters to MPs and public authorities asking them to substantially revise Draft Law No. 5420 and hold thorough discussions with business and experts.
The American Chamber of Commerce calls on MPs to finalize Draft Law #5420 and remove the proposed wording of Article 201-3 of the CCU “Smuggling of Goods” or significantly change the wording of the description of the objective side of the crime, providing that criminal liability is incurred exclusively for intentional customs fraud committed with the purpose of evading customs duties or avoiding non-tariff regulation.
The Hungarian government will protect farmers and, if necessary, close the border to some grain products coming from Ukraine from September 16, Hungarian Agriculture Minister Istvan Nagy told the Transit political festival in Tihany.
“If the EU does not extend the import ban on some Ukrainian grain products, which expires on September 15, Hungary will impose an import ban not only on four products, but on all 24 previous products in order to protect the domestic market,” the Hungarian publication agrarszektor.hu quoted the minister as saying.
According to him, Hungary’s agriculture has experienced one shock after another in recent years. The coronavirus epidemic, drought, the war raging in the neighborhood and its consequences, the energy crisis, and the fact that cheap Ukrainian agricultural products have flooded the European market duty-free are all difficulties for producers, he said.
“Although the harvest is better – a near-record amount of corn is expected this year – sales are facing difficulties due to cheap competition,” Nagy added.
As reported, Polish Agriculture Minister Robert Telusz said after a meeting of a coalition of five frontline countries in Poland on Friday that the position of Poland, Hungary, Bulgaria, Slovakia and Romania on the need to extend restrictive measures against Ukrainian wheat, rapeseed, corn and sunflower remains unchanged – a ban until the end of 2023.
The European Commission on June 5 agreed to extend until September 15 the restrictions on wheat, corn, rapeseed and sunflower exports from Ukraine to Bulgaria, Hungary, Poland, Romania and Slovakia. “The restrictions do not mean a ban on the transit of these goods through Bulgaria, Hungary, Poland, Romania and Slovakia,” the document signed by EC chief Ursula von der Leyen said.
Source: https://www.agrarszektor.hu/szabalyozas/20230827/nagy-istvan-fenntartjuk-a-behozatali-tilalmat-44906
The Verkhovna Rada has exempted from value added tax (VAT) a number of goods imported to Ukraine for security and defense needs.
A total of 294 people’s deputies voted for the relevant draft law No. 9467 on amendments to the transitional provisions of the Tax Code on the peculiarities of importing into the customs territory of Ukraine goods for security and defense needs at the plenary session on Friday, a member of the faction “Golos” Yaroslav Zheleznyak said in his Telegram channel.
The bill exempts from VAT thermal imaging binoculars, monoculars and binoculars, night vision devices and rangefinders that are imported into the customs territory of Ukraine.
Export of important goods from Ukraine in Jan-Mar 2023 in relation to 2022
Source: Open4Business.com.ua and experts.news
The Cabinet of Ministers of Ukraine included sugar (trade item according to UKTVED 1701) to the list of goods, export of which is subject to licensing for the period from June 5 to September 15, 2023.
According to the representative of the Cabinet of Ministers in the Verkhovna Rada Taras Melnychuk in Telegram, the relevant decision was taken at a government meeting on Tuesday.
“Amended Annexes 1 and 5 to the resolution of the Cabinet of Ministers of 27.12.2022 N 1466 “On approval of the lists of goods, exports and imports of which are subject to licensing and quotas for 2023”. Sugar has been included in Appendix 1 “Quotas for the goods subject to export licensing” of the decree ¹ 1466 with a volume of quota of 0 tons and a licensing period from June 5 to September 15, 2023,” he wrote.
At the same time, sugar is excluded from Annex 5 of the same decree “The list of goods, the export of which is subject to licensing.
2022-2024 goods trade balance forecast (USD bln)
Source: Open4Business.com.ua and experts.news
