Key сhallenges in implementing electronic traceability for alcohol importers

20/ 06/ 2025

Listen to online Stop   The legislation on electronic traceability of excisable goods, developed as a result of a compromise between the government and business, laid the foundation for preparing the market for the mandatory introduction of the Electronic System from 1 January 2026. In particular, it was envisaged that the Cabinet of Ministers of Ukraine would adopt all necessary secondary legislation within six months of the entry into force of Law No. 3173-IX, and that the system would start operating in test mode from 1 March 2025. However, despite these legislative provisions, the government has yet to adopt all the required regulatory acts. Moreover, according to the timeline of the Ministry of Digital Transformation of Ukraine, the system’s launch in full operational mode is only planned for late 2025 — without providing the necessary software solutions for offline functionality. Such an approach contradicts the requirements of the current legislation on electronic traceability of excisable goods, prevents businesses from preparing in time, poses high risks of technical failures, and results in unjustified operational uncertainty. The implementation of such a large-scale and complex system requires significant rethinking and restructuring of internal company processes, including: development and configuration of software for interaction with the Electronic System; adaptation of logistics and accounting processes; changes to ERP systems and integration work; multi-level testing — from manufacturers and importers to end consumers; aligning internal documentation processes with the new requirements; staff training. These processes cannot be effectively implemented without stable access to a fully functional system environment, including tools for offline operation. The business community expects predictability and clear timelines from the state regarding the adoption of all necessary regulations and the completion of a fully operational Electronic System. Companies insist on the need to ensure proper testing and implementation of the system within the timeframe set out in Law No. 3173-IX. To achieve this, the relevant legislative amendments must be introduced regarding the electronic traceability of excisable goods. If the Electronic System is launched on 1 January 2026 without proper business preparation, there is a real risk of widespread disruptions in the supply of excisable products, which could: lead to a halt in the operations of legitimate businesses; create conditions for a sharp increase in the volume of illicit alcohol and tobacco trade; result in significant budget losses due to shortfalls in excise duties, VAT, import duties, and other taxes. These challenges faced by alcohol importers in implementing the electronic traceability system were highlighted by Anton Yelisieiev, Chairman of the EBA Committee on Alcohol Imports and Trade, during the European Business Association’s expert discussion “Implementation of e-Excise: Discussing Challenges and Solutions.”

The legislation on electronic traceability of excisable goods, developed as a result of a compromise between the government and business, laid the foundation for preparing the market for the mandatory introduction of the Electronic System from 1 January 2026. In particular, it was envisaged that the Cabinet of Ministers of Ukraine would adopt all necessary secondary legislation within six months of the entry into force of Law No. 3173-IX, and that the system would start operating in test mode from 1 March 2025.

However, despite these legislative provisions, the government has yet to adopt all the required regulatory acts. Moreover, according to the timeline of the Ministry of Digital Transformation of Ukraine, the system’s launch in full operational mode is only planned for late 2025 — without providing the necessary software solutions for offline functionality.

Such an approach contradicts the requirements of the current legislation on electronic traceability of excisable goods, prevents businesses from preparing in time, poses high risks of technical failures, and results in unjustified operational uncertainty.

The implementation of such a large-scale and complex system requires significant rethinking and restructuring of internal company processes, including:

• development and configuration of software for interaction with the Electronic System;

• adaptation of logistics and accounting processes;

• changes to ERP systems and integration work;

• multi-level testing — from manufacturers and importers to end consumers;

• aligning internal documentation processes with the new requirements;

• staff training.

These processes cannot be effectively implemented without stable access to a fully functional system environment, including tools for offline operation.

The business community expects predictability and clear timelines from the state regarding the adoption of all necessary regulations and the completion of a fully operational Electronic System. Companies insist on the need to ensure proper testing and implementation of the system within the timeframe set out in Law No. 3173-IX. To achieve this, the relevant legislative amendments must be introduced regarding the electronic traceability of excisable goods.

If the Electronic System is launched on 1 January 2026 without proper business preparation, there is a real risk of widespread disruptions in the supply of excisable products, which could:

• lead to a halt in the operations of legitimate businesses;

• create conditions for a sharp increase in the volume of illicit alcohol and tobacco trade;

• result in significant budget losses due to shortfalls in excise duties, VAT, import duties, and other taxes.

These challenges faced by alcohol importers in implementing the electronic traceability system were highlighted by Anton Yelisieiev, Chairman of the EBA Committee on Alcohol Imports and Trade, during the European Business Association’s expert discussion “Implementation of e-Excise: Discussing Challenges and Solutions.”