Business news from Ukraine

MARKET SHARE OF ILLEGAL CIGARETTE MARKET IN UKRAINE INCREASES TO 6.9%

The share of the illegal cigarette market in Ukraine as of August 2020 increased to 6.9% compared to 6.6% in 2019, CEO of the tobacco company JTI Ukraine Paul Holloway has said, citing a Kantar study.
“This means that in the first eight months of this year, the national budget received UAH 4.5 billion less,” he said at a press conference at Interfax-Ukraine on Wednesday.
According to Kantar data, over the entire past year, the share of illegal trade in tobacco products in Ukraine was 6.6%, or 3.5 billion cigarettes. As a result, the national budget received UAH 4.7 billion less.
At the same time, in July 2020, Kantar estimated the volume of the illegal cigarette market in Ukraine at 5%.
As Holloway said, consumers spend about 25% of their income on cigarettes. Consequently, an increase in the price of cigarettes will lead to an increase in the illicit trade in cigarettes.
The CEO of JTI Ukraine said that legal business is losing market share in favor of illegal manufacturers and smugglers. Moreover, 75-80% of the cost of legal cigarettes are taxes, which the manufacturers of illegal cigarettes do not pay.
To fight the illegal tobacco market, the company launched the No Smuggling project, he said.
Acting Head of the State Fiscal Service (SFS) Serhiy Solodchenko said that in the first nine months of 2020, his service seized excisable goods for the amount of UAH 2.034 billion, of which about 36% in monetary terms were tobacco products.
During this period, the tax police seized 11.5 million packages of tobacco products and 164 tonnes of tobacco from illegal circulation for the amount of UAH 730.4 million. In monetary terms, this is almost twice more compared to the same period last year.

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ILLEGAL LOGGING INCREASES BY SEVEN TIMES IN UKRAINE IN 2019

The volume of illegal logging increased 6.7 times in 2019 compared to 2018, to 118,000 cubic meters, the amount of damage caused amounted to UAH 814.2 million.
According to the released annual report of the State Forest Resources Agency, of the total volume of illegal logging within the regional forestry and hunting agencies, the figure in Kherson regional forestry stood at 51% (60,250 cubic meters) and Kharkiv region at 35% (41,060 cubic meters).
According to the State Forest Resources Agency, industry enterprises from all types of logging prepared 15.6 million cubic meters of wood in 2019, which is 5.7% less compared to 2018. This is due to low demand in the internal market.
The total volume of round wood sales to the internal market amounted to 13 million cubic meters for a total of UAH 11.7 billion in 2019, which is UAH 1.5 billion less than in 2018.
The wood processing units received 2.2 million cubic meters of wood for processing in 2019, which is 1.1% less than in 2018.
The State Forest Resources Agency said that the area of solid loggings amounted to 40,100 hectares in 2018. Forests were recreated on an area of 42,000 hectares (new forests on area of 2,200 hectares) in 2019.

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UKRAINIAN REVEALING INFORMATION SETS UP BUSINESS SUPPORT CENTER

Nationwide legal association Revealing Information has set up the Business Support Center. The Center will provide businesses with support to fight illegal seizures, which have become a burning issue during the emergency situation and quarantine.
According to the Justice Ministry, the number of illegal seizures through making amendments to state registers has increased by 16 times during the quarantine.
Managing Partner of the Revealing Information Law Firm Oleksandr Keyer said that today both the society and businesses experience an intensive turbulence.

“The number of fraud cases is growing in Ukraine. The Justice Ministry has officially reported an increase in the number of illegal seizure attempts by dozens of times. We also can see such a trend. The situation is getting even worse due to uncertainty about the coronavirus (COVID-19) disease and its influence on business and economy. We are doing the utmost to stay one step ahead and, in particular, for this reason our company has set up the Business Support Center right now,” Keyer said.
The Business Support Center of the Revealing Information Law Firm will provide services to protect businesses by all available legal means, including security and prevention measures, represent them in court, provide them with legal support while concluding agreements during the quarantine, and so on.
Revealing Information is a nationwide legal association of broad-based experts providing services to protect the rights of victims of all types of offenses, fraud and banditry.
The association’s services include legal business support, analytical and information work, security measures to counter raiding, customer support in criminal, commercial and civil disputes, and more.

http://revealinginformation.com.ua/en/

E-mail: revealing@ukr.net
Phone: +38095 868 3590, +38067 868 3690

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SALE OF WOOD WITHOUT ELECTRONIC CENTRALIZED RECORDS IN UKRAINE TO BE ILLEGAL

The sale of wood without electronic centralized records will be considered illegal from April 2020 and will be subject to additional checks by law enforcement authorities, Head of the State Forest Resources Agency Andriy Zablotsky has said. “95% of all wood logged by forestry enterprises in Ukraine is subject to electronically record-keeping. With dry figures, this means that 526 permanent forest users are connected to the electronic centralized records, of which 341 are state-owned enterprises, organizations and institutions, 144 are municipal enterprises and 41 are forest users who belong to other organizational and legal forms of management,” he wrote on his Facebook page.
According to Zablotsky, the remaining 5% are individual municipal and private enterprises that are in the process of training and connecting to the electronic centralized records. He reminded that previously only forestry enterprises managed by the State Forest Resources Agency worked in the electronic record-keeping system.
The head of the State Forest Resources Agency said that access to the unified public system of electronic record-keeping of wood was provided to the Ministry of Internal Affairs, the National Police, the State Fiscal Service, the Security Service of Ukraine and other public bodies so that they had the opportunity to verify the legality of wood transportation. The public can verify the legality of logging through the Forest in a Smartphone system and the legality of its transportation by tag number, consignment notes and the vehicle, he said.
“Starting in April, the sale of wood without electronic records will be considered unlawful and will be subject to additional checks by law enforcement agencies,” Zablotsky said.
The State Forest Resources Agency is also preparing amendments to the legislation regarding the criminalization of trade in illegally logged wood and the inaccuracy of information entered into the electronically record-keeping system.
In addition, according to the head of the State Forest Resources Agency, it is planned to resolve the issue of full certification of wood products, so that there are no legislative gaps when individual wood products are exported from Ukraine without certificates of origin.
“Often there are questions both from trading partners and from society that such products are made from wood of dubious origin,” Zablotsky said.

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UKRAINE LOSSES FROM ILLEGAL DEFORESTATION OVER UAH 1 BLN

The state suffered losses in the amount of more than UAH 1 billion due to illegal deforestation in Ukraine, Head of the State Forest Resources Agency Andriy Zablotsky has said.
“State losses [from illegal logging] amount to more than UAH 1 billion. A significant part of the market is in the shadow, and electronic accounting aims to remove this powerful market from the shadow,” he said during a meeting with the prime minister and representatives of the territorial bodies of the State Forest Agency in Kyiv.
According to Zablotsky, it is planned to introduce criminal liability for the sale of trees without tags.
In addition, in accordance with the goals of the government, it is planned to increase the forest cover of Ukraine by 20%.
The agency is developing a bill on forest inventory for its further use on the basis of new rules.
Zablotsky also noted that the agency plans to raise the question before the government and the Verkhovna Rada about raising state funding, which today makes up 5% of the demand and is critical in certain issues.
As reported, Prime Minister of Ukraine Oleksiy Honcharuk instructed the head of the State Forest Agency as soon as possible to ensure the operation of online sites in the wood turnover market and to launch the electronic centralized accounting of wood by February 1, 2020.

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PRIME MINISTER OF UKRAINE SAYS 1,400 ILLEGAL FUEL STATIONS HALT OPERATION

Prime Minister of Ukraine Oleksiy Honcharuk has reported that 1,399 illegal fuel stations have halted their operation, as a part of campaign on combating illegal patrol market. “In total, State Fiscal Service, National Police and Security Service of Ukraine carried 2,200 inspections. Information about 1,399 illegal fuel stations has been verified: 377 halted its operation, 316 were demounted or are absent according their location area, 243 were demounted for the reporting period, 463 registered license,” he wrote on Telegram on Friday.
According to the premier, 4,000 tonnes of fuel and lubricants worth UAH 93.4 million have been withdrawn, and equipment worth UAH 94.2 million has been withdrawn as well.
Previously Honcharuk charged the State Fiscal Service and law enforcement agencies with settlement of illegal fuel circulation by January 9, 2020.

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