Business calls for Draft Law No. 15372 to be rejected

15/ 09/ 2026

The European Business Association, the American Chamber of Commerce in Ukraine and the Ukrainian Association of Tobacco Products Manufacturers “Ukrtiutiun” do not support Draft Law No. 15372 on enhancing the effectiveness of controls over the production and circulation of raw tobacco and call for its rejection at the first reading. The draft law currently provides for the introduction of a new system for controlling and tracing raw tobacco, including extending the e-Excise system to raw tobacco, affixing electronic excise stamps to each unit of its packaging, establishing a Unified Register of Raw Tobacco Producers, monitoring the movement of raw tobacco by vehicles, and introducing additional requirements for accounting for raw tobacco by weight and moisture content. At the same time, a significant proportion of the proposed instruments are already covered by current legislation. In particular, under Law No. 3817-IX, producers are required to report monthly to the State Tax Service (STS) on stocks, purchases and use of raw tobacco. The legislation also already establishes limits on raw tobacco losses and provides for taxation of losses exceeding the prescribed limits. Continuous video surveillance and STS control posts are required at the relevant production and storage facilities. According to the business community, introducing an additional parallel control system will not address the issue of illicit trade, but will instead make it more difficult for compliant businesses to operate. It will increase the administrative burden, raise operating costs, worsen the investment climate and may create risks of domestic production being suspended and the market shifting towards imports. The business community also objects to extending the e-Excise system to raw tobacco. Certain critical components of the system are still being further developed, while economic operators do not have the opportunity to comprehensively test all business processes and integration solutions, and the project implementation deadlines have been missed. Therefore, it is currently impossible to objectively assess the effectiveness of the system, as well as its potential operational and technical risks. Expanding the functionality of a system that has not yet undergone full-scale testing is unjustified and premature, may further delay its full implementation and significantly increase costs. The business community supports stronger controls over the illicit cultivation of tobacco. At the same time, the relevant legislative amendments should primarily address tobacco cultivation and the activities of businesses operating in this area. They should be considered as part of a separate draft law and should not create an excessive regulatory burden for legal producers, which already operate under specific legislation and comply with product traceability and tax payment requirements. Moreover, some of the mechanisms proposed in Draft Law No. 15372 have already been included in previous legislative initiatives that did not receive the support of the Verkhovna Rada, in particular Draft Law No. 14245 and Draft Law No. 13628. The business associations call on the Members of the Verkhovna Rada of Ukraine not to support Draft Law No. 15372 at the first reading and to prevent the introduction of an excessive regulatory burden on compliant businesses.

The draft law currently provides for the introduction of a new system for controlling and tracing raw tobacco, including extending the e-Excise system to raw tobacco, affixing electronic excise stamps to each unit of its packaging, establishing a Unified Register of Raw Tobacco Producers, monitoring the movement of raw tobacco by vehicles, and introducing additional requirements for accounting for raw tobacco by weight and moisture content.

At the same time, a significant proportion of the proposed instruments are already covered by current legislation. In particular, under Law No. 3817-IX, producers are required to report monthly to the State Tax Service (STS) on stocks, purchases and use of raw tobacco. The legislation also already establishes limits on raw tobacco losses and provides for taxation of losses exceeding the prescribed limits. Continuous video surveillance and STS control posts are required at the relevant production and storage facilities.

According to the business community, introducing an additional parallel control system will not address the issue of illicit trade, but will instead make it more difficult for compliant businesses to operate. It will increase the administrative burden, raise operating costs, worsen the investment climate and may create risks of domestic production being suspended and the market shifting towards imports.

The business community also objects to extending the e-Excise system to raw tobacco. Certain critical components of the system are still being further developed, while economic operators do not have the opportunity to comprehensively test all business processes and integration solutions, and the project implementation deadlines have been missed. Therefore, it is currently impossible to objectively assess the effectiveness of the system, as well as its potential operational and technical risks. Expanding the functionality of a system that has not yet undergone full-scale testing is unjustified and premature, may further delay its full implementation and significantly increase costs.

The business community supports stronger controls over the illicit cultivation of tobacco. At the same time, the relevant legislative amendments should primarily address tobacco cultivation and the activities of businesses operating in this area. They should be considered as part of a separate draft law and should not create an excessive regulatory burden for legal producers, which already operate under specific legislation and comply with product traceability and tax payment requirements.

Moreover, some of the mechanisms proposed in Draft Law No. 15372 have already been included in previous legislative initiatives that did not receive the support of the Verkhovna Rada, in particular Draft Law No. 14245 and Draft Law No. 13628.

The business associations call on the Members of the Verkhovna Rada of Ukraine not to support Draft Law No. 15372 at the first reading and to prevent the introduction of an excessive regulatory burden on compliant businesses.