Business asks to finalize the draft law on smuggling criminalization

06/ 12/ 2023

Recently, it became known that the next meeting of the Verkhovna Rada will include Draft Law No. 5420 On Amendments to the Criminal Code of Ukraine and the Criminal Procedure Code of Ukraine on Criminalization of Smuggling of Goods and Excisable Goods, as well as False Declaration of Goods on the agenda for adoption as a whole. Therefore, the European Business Association urges MPs to send the document for revision. In particular, the following aspects are the most pressing for business. For example, the threshold of liability for customs offenses - 147 thousand unpaid payments - is unreasonably low. For comparison, liability for tax evasion is triggered by non-payment of about UAH 3 million. The draft law provides for too wide a range of penalties (a relatively small fine of UAH 17 thousand or imprisonment for a long term of up to 11 years). This entails multiple corruption risks. At the same time, it is essential to emphasize that the draft law needs to be significantly revised in terms of establishing a clear list of subjects of criminal liability for these offenses. It remains unclear who can be held criminally liable for such crimes - the head of the company, the declarant, the customs broker, the carrier, etc. At the same time, it is important to emphasize that for excisable goods, the draft law needs to be significantly revised to clarify the list of smuggled goods, namely certain excisable goods, to provide for qualifying features and adequate and reasonable sanctions for committing a crime. In addition, business representatives observe violations of the rights of foreign economic operators (when customs authorities determine the customs value of goods, the code of goods, and draw up protocols that are canceled in court) and the lack of effective mechanisms for compensation for damage and liability of government officials. Therefore, it is extremely important to designate a single but effective body that would control this issue to avoid creating another instrument of pressure on transparent business. In particular, according to the business, it would be advisable to designate the ESB as such a body, but only after the reboot of this structure. Otherwise, the adoption of amendments to the legislation in this form may lead to even greater pressure on transparent businesses. At the same time, to understand the balance of responsibility, both on the part of citizens and public officials, changes to the legislation should be made together with changes in the responsibility of officials for making illegal decisions. Otherwise, we will see irresponsibility and impunity of officials and, at the same time, disproportionate responsibility of entrepreneurs before the law. The community has repeatedly sent all its proposals to the document and is ready to share them once again and jointly finalize the draft law, which is, among other things, extremely important on Ukraines path to European integration. So we sincerely hope that the voice of business will be heard! Because it is very inappropriate in the current military situation to destroy the business climate with internal confrontations!

Recently, it became known that the next meeting of the Verkhovna Rada will include Draft Law No. 5420 “On Amendments to the Criminal Code of Ukraine and the Criminal Procedure Code of Ukraine on Criminalization of Smuggling of Goods and Excisable Goods, as well as False Declaration of Goods” on the agenda for adoption as a whole.

Therefore, the European Business Association urges MPs to send the document for revision.

In particular, the following aspects are the most pressing for business. For example, the threshold of liability for customs offenses – 147 thousand unpaid payments – is unreasonably low. For comparison, liability for tax evasion is triggered by non-payment of about UAH 3 million. The draft law provides for too wide a range of penalties (a relatively small fine of UAH 17 thousand or imprisonment for a long term of up to 11 years). This entails multiple corruption risks.

At the same time, it is essential to emphasize that the draft law needs to be significantly revised in terms of establishing a clear list of subjects of criminal liability for these offenses. It remains unclear who can be held criminally liable for such crimes – the head of the company, the declarant, the customs broker, the carrier, etc.

At the same time, it is important to emphasize that for excisable goods, the draft law needs to be significantly revised to clarify the list of smuggled goods, namely certain excisable goods, to provide for qualifying features and adequate and reasonable sanctions for committing a crime.

In addition, business representatives observe violations of the rights of foreign economic operators (when customs authorities determine the customs value of goods, the code of goods, and draw up protocols that are canceled in court) and the lack of effective mechanisms for compensation for damage and liability of government officials. Therefore, it is extremely important to designate a single but effective body that would control this issue to avoid creating another instrument of pressure on transparent business. In particular, according to the business, it would be advisable to designate the ESB as such a body, but only after the reboot of this structure.

Otherwise, the adoption of amendments to the legislation in this form may lead to even greater pressure on transparent businesses. At the same time, to understand the balance of responsibility, both on the part of citizens and public officials, changes to the legislation should be made together with changes in the responsibility of officials for making illegal decisions. Otherwise, we will see irresponsibility and impunity of officials and, at the same time, disproportionate responsibility of entrepreneurs before the law.

The community has repeatedly sent all its proposals to the document and is ready to share them once again and jointly finalize the draft law, which is, among other things, extremely important on Ukraine’s path to European integration.

So we sincerely hope that the voice of business will be heard! Because it is very inappropriate in the current military situation to destroy the business climate with internal confrontations!