On 31 October 2012, the Cabinet of Ministers of Ukraine, having considered the sound arguments of the European Business Association and other specialized organisations representing interests of companies – grain manufacturers and traders on the agricultural market of Ukraine, approved the abolition of mandatory registration of foreign economic contracts.
Background: On 13 December 2010 the Cabinet of Ministers of Ukraine adopted the Resolution On Certain Issues regarding Conclusion and Registration of Foreign Economic Contracts No.1254 according to which starting from 1 February 2011 services of conclusion and registration of foreign economic contracts for export of agricultural products were rendered by the Agrarian Commodity Exchange and other commodity exchanges certified as required by law.
The EBA Grain and Oilseed Committee believes that such action will allow releasing the excessive burden imposed upon the grain manufacturers and exporters as well as facilitate the improvement of the business climate in Ukraine.
According to the Law of Ukraine On State Support of the Agricultural Sector of Ukraine No.1877 any entity engaged in foreign economic activities being an owner of agricultural products (in particular, grain and oilseed as well as products thereof) and carrying out its export does not have any obligation to make customs clearance of exports on the basis of foreign economic contracts singed and registered at the Agrarian Commodity Exchange and other commodity exchanges. Consequently, imposing any administrative restrictions with regard to the unrestricted and free movement of agricultural products for export shall be deemed invalid. Therefore, touting the agricultural product owner with certain service suppliers shall be deemed illegal.
The EBA Grain and Oilseed Committee bringing together the leading grain manufacturers and exporters was repeatedly asking the Government of Ukraine to abolish mandatory registration of foreign economic contracts during the sale of agricultural products at the Agrarian Commodity Exchange, as the role of registration is to carry out the state monitoring of the grain and oilseed market. However, this function can be attributed to the specialized state institutions.
The European Business Association is happy with the decision to cancel mandatory registration of foreign economic contracts during the sale of agricultural products made during the meeting of the Cabinet of Ministers of Ukraine on 31 October 2012. This is a long awaited initiative providing all reasons to hope for the soonest settlement of this problem and creation of additional favourable environment and further guarantees for effective cooperation.
We are happy to share this progress with our members who have been waiting for the good news re. abolition of the abovementioned regulation.