Business asks to clarify the text of the draft law on the criminalization of smuggling

16/ 12/ 2021

Today, December 16, the Verkhovna Rada plans to consider in the second reading draft law №5420 on the criminalization of smuggling of goods and excisable goods. It is worth noting that after yesterdays meeting of the Verkhovna Rada Committee on Law Enforcement, no official tables of amendments were published. Therefore, the businesses are not able to read the text that will be put to the vote. We would like to remind you that the European Business Association has repeatedly insisted on finalizing the draft law and sent its remarks and proposals to the Speaker of the Verkhovna Rada, the Verkhovna Rada Committee on Finance, Tax and Customs Policy, the Verkhovna Rada Committee on Law Enforcement, and our experts. However, before a possible vote, businesses do not know whether such proposals are reflected in the document. There are several key points for business in these draft laws with which the EBA experts strongly disagree. First, the EBA does not support the introduction of liability for inaccurate declaration of goods, including provisions that allow for the possibility of criminal prosecution, even for unintentional errors in customs declarations. Secondly, the EBA does not support criminal prosecution only for actions aimed at illegal movement of goods across the customs border of Ukraine outside customs control or with concealment from customs control. This provision is formulated in the document so that the crime will be considered committed regardless of whether the goods were illegally moved across the customs border of Ukraine or not. Thirdly, as understood by EBA experts, there will be a criminal prosecution if the value of objects of crime reaches UAH 113,500 (for excisable goods - UAH 56,750), and this is unreasonably low, while sanctions are excessive. The EBA representatives agree that it is necessary to increase the liability for smuggling, first of all, for excisable and risky groups of goods in terms of illegal import, such as electronics. Also, the EBA experts consider it necessary to increase the threshold of the value of items that are the objects of the crime which leads to criminal liability for smuggling excisable goods, etc. Business representatives emphasize that the fight against gray imports should be approached more broadly, in particular, to introduce effective measures that make it impossible to sell goods without documents about their origin (supply chain control), especially in e-commerce; obstruct tax minimization schemes; ensure the institutional development of relevant bodies and increase the efficiency of their work. We very much hope that the voice of business will be heard, and the draft law will not be adopted in its current form without taking into account important comments and suggestions from the business! We urge MPs to adhere to the agreements reached during working meetings with the EBA experts and to revise the draft law accordingly. Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

We would like to remind you that the European Business Association has repeatedly insisted on finalizing the draft law and sent its remarks and proposals to the Speaker of the Verkhovna Rada, the Verkhovna Rada Committee on Finance, Tax and Customs Policy, the Verkhovna Rada Committee on Law Enforcement, and our experts. However, before a possible vote, businesses do not know whether such proposals are reflected in the document.

There are several key points for business in these draft laws with which the EBA experts strongly disagree. First, the EBA does not support the introduction of liability for inaccurate declaration of goods, including provisions that allow for the possibility of criminal prosecution, even for unintentional errors in customs declarations.

Secondly, the EBA does not support criminal prosecution only for actions aimed at illegal movement of goods across the customs border of Ukraine outside customs control or with concealment from customs control. This provision is formulated in the document so that the crime will be considered committed regardless of whether the goods were illegally moved across the customs border of Ukraine or not.

Thirdly, as understood by EBA experts, there will be a criminal prosecution if the value of objects of crime reaches UAH 113,500 (for excisable goods – UAH 56,750), and this is unreasonably low, while sanctions are excessive.

The EBA representatives agree that it is necessary to increase the liability for smuggling, first of all, for excisable and risky groups of goods in terms of illegal import, such as electronics. Also, the EBA experts consider it necessary to increase the threshold of the value of items that are the objects of the crime which leads to criminal liability for smuggling excisable goods, etc.

Business representatives emphasize that the fight against “gray” imports should be approached more broadly, in particular, to introduce effective measures that make it impossible to sell goods without documents about their origin (supply chain control), especially in e-commerce; obstruct tax minimization schemes; ensure the institutional development of relevant bodies and increase the efficiency of their work.

We very much hope that the voice of business will be heard, and the draft law will not be adopted in its current form without taking into account important comments and suggestions from the business! We urge MPs to adhere to the agreements reached during working meetings with the EBA experts and to revise the draft law accordingly.

Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.