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Business calls for stronger action against illegal online trade

27/ 03/ 2025
  Following the European Business Associations forum De-Shadowing and Fair Competition, EBA experts have urged the authorities to strengthen cooperation in combating illegal online trade in excise goods. In particular, they proposed holding a public discussion on draft regulatory acts with business participation and creating a working group to develop mechanisms for monitoring and blocking illegal online sellers. Ukraine’s Law No. 3817-IX On State Regulation of the Production and Circulation of Ethyl Alcohol, Alcohol Distillates, Bioethanol, Alcoholic Beverages, Tobacco Products, Tobacco Raw Materials, Liquids Used in Electronic Cigarettes, and Fuel provides for the adoption of subordinate acts to regulate online trade in these goods. Key provisions include: Creating a registry of licensed websites selling alcohol, tobacco products, and e-cigarettes; Implementing systematic monitoring of the online space by tax authorities to identify websites that sell excise goods in violation of the law; Developing mechanisms to block such websites and introducing effective control measures. However, EBA member companies note that these regulatory acts have not yet been approved, and enforcement against illegal online trade in excise goods remains ineffective — despite the law coming into force on 27 July 2024. This situation fosters the growth of the shadow market for excise goods online and causes significant economic losses to the state. EBA experts highlight the following risks of unregulated online trade in excise goods: Expansion of the illegal market. The volume of unlawful excise goods sales online continues to grow, leading to substantial budgetary losses due to unpaid excise taxes. Unfair competition. Legitimate businesses that comply with regulatory requirements are placed at a disadvantage compared to unscrupulous sellers. The European Business Association underscores that constructive cooperation between the state and businesses will enable the swift and effective implementation of legal requirements, create fair market conditions for all participants, and increase budget revenues.

Following the European Business Association’s forum “De-Shadowing and Fair Competition”, EBA experts have urged the authorities to strengthen cooperation in combating illegal online trade in excise goods. In particular, they proposed holding a public discussion on draft regulatory acts with business participation and creating a working group to develop mechanisms for monitoring and blocking illegal online sellers.

Ukraine’s Law No. 3817-IX “On State Regulation of the Production and Circulation of Ethyl Alcohol, Alcohol Distillates, Bioethanol, Alcoholic Beverages, Tobacco Products, Tobacco Raw Materials, Liquids Used in Electronic Cigarettes, and Fuel” provides for the adoption of subordinate acts to regulate online trade in these goods.

Key provisions include:

  • Creating a registry of licensed websites selling alcohol, tobacco products, and e-cigarettes;

  • Implementing systematic monitoring of the online space by tax authorities to identify websites that sell excise goods in violation of the law;

  • Developing mechanisms to block such websites and introducing effective control measures.

However, EBA member companies note that these regulatory acts have not yet been approved, and enforcement against illegal online trade in excise goods remains ineffective — despite the law coming into force on 27 July 2024. This situation fosters the growth of the shadow market for excise goods online and causes significant economic losses to the state.

EBA experts highlight the following risks of unregulated online trade in excise goods:

  • Expansion of the illegal market. The volume of unlawful excise goods sales online continues to grow, leading to substantial budgetary losses due to unpaid excise taxes.

  • Unfair competition. Legitimate businesses that comply with regulatory requirements are placed at a disadvantage compared to unscrupulous sellers.

The European Business Association underscores that constructive cooperation between the state and businesses will enable the swift and effective implementation of legal requirements, create fair market conditions for all participants, and increase budget revenues.

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