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Business associations call on the Government not to create additional regulation of excisable goods

29/ 04/ 2024
  The business community, united by the American Chamber of Commerce in Ukraine, the European Business Association, the Union of Ukrainian Entrepreneurs (SUP), and the Ukrainian Food Retail Alliance, calls on the Cabinet of Ministers of Ukraine to abandon the development and adoption of the draft Law “On Amendments to the Law of Ukraine “On Measures to Prevent and Reduce the Use of Tobacco Products and Their Harmful Effects on Public Health,” which provides for additional regulation of the industry. The draft law prohibits the visible placement of tobacco products, e-cigarettes, etc. in places of their retail sale. According to market participants who work in compliance with the requirements of the current legislation, the excessive regulatory burden on transparent business, non-compliance with the current legislation by public authorities, and rejection of the business position may lead to a significant increase in the share of illegal trade through unlicensed sales channels and complicate the detection of “gray” sellers by law enforcement agencies. For white businesses, the adoption of such changes will result in additional pressure from regulatory authorities and increase the number of formal inspections.  At the same time, the Draft Law adoption will lead to a significant reduction in the specialized tobacco retail industry and an increase in unemployment, respectively. For transparent businesses, initiative implementation will also entail additional costs – both for large retail chains and small and medium-sized businesses. Moreover, the relevant legislation of the European Union does not provide for such a ban on the visible placement of products at points of sale. Therefore, the business community strongly opposed the draft law and sent joint appeals to the Government, as adopting such a ban would negatively impact the economy and state budget revenues. In support of the business position, the Ministry of Economy of Ukraine recommended that the State Service of Ukraine on Food Safety and Consumer Protection postpone the development of this legislative initiative until the end of martial law in Ukraine. In addition, the State Regulatory Service of Ukraine has twice refused to approve the draft regulatory act. Therefore, we sincerely hope that the voice of business will be heard.

The business community, united by the American Chamber of Commerce in Ukraine, the European Business Association, the Union of Ukrainian Entrepreneurs (SUP), and the Ukrainian Food Retail Alliance, calls on the Cabinet of Ministers of Ukraine to abandon the development and adoption of the draft Law “On Amendments to the Law of Ukraine “On Measures to Prevent and Reduce the Use of Tobacco Products and Their Harmful Effects on Public Health,” which provides for additional regulation of the industry. The draft law prohibits the visible placement of tobacco products, e-cigarettes, etc. in places of their retail sale.

According to market participants who work in compliance with the requirements of the current legislation, the excessive regulatory burden on transparent business, non-compliance with the current legislation by public authorities, and rejection of the business position may lead to a significant increase in the share of illegal trade through unlicensed sales channels and complicate the detection of “gray” sellers by law enforcement agencies. For white businesses, the adoption of such changes will result in additional pressure from regulatory authorities and increase the number of formal inspections. 

At the same time, the Draft Law adoption will lead to a significant reduction in the specialized tobacco retail industry and an increase in unemployment, respectively.

For transparent businesses, initiative implementation will also entail additional costs – both for large retail chains and small and medium-sized businesses.

Moreover, the relevant legislation of the European Union does not provide for such a ban on the visible placement of products at points of sale.

Therefore, the business community strongly opposed the draft law and sent joint appeals to the Government, as adopting such a ban would negatively impact the economy and state budget revenues.

In support of the business position, the Ministry of Economy of Ukraine recommended that the State Service of Ukraine on Food Safety and Consumer Protection postpone the development of this legislative initiative until the end of martial law in Ukraine. In addition, the State Regulatory Service of Ukraine has twice refused to approve the draft regulatory act. Therefore, we sincerely hope that the voice of business will be heard.

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