The draft law on the criminalization of smuggling poses threats to law-abiding business - the Ukrainian Business Council

Sep 20 2023 published c Uncategorized, Activity, earnings, news

People's deputies of Ukraine

Dear MPs!

Members of the Ukrainian Business Council, which includes 110 business associations of various sectors of the economy, analyzeddraft law No. 5420 regarding the criminalization of smuggling and came to a conclusion, that in the proposed to 2 reading the editorial, this project poses significant threats to law-abiding business, since its provisions are formulated in this way, whatcontain significant corruption risks, and also pose a threat to the activity of primarily legal business and in no way contribute to solving the problem of shadow imports.

First of all, it should be emphasized, that the threshold of criminal liability under Article 201-3 of the draft law is unreasonably low. In particular, criminal liability is proposed in case of illegal movement of goods across the customs border in the amount of, with a share of more than 1,342 million. Instead, for the qualification of a criminal offense according to the article 212 of the Criminal Code of Ukraine (CCU) "Tax evasion", the threshold of criminal liability for tax evasion (which are customs payments) is 4,026 million. 

Since such changes relate specifically to responsibility for economic crimes and public danger consists precisely in non-payment of taxes and other payments, then it is advisable to be guided by those similar to the content of the article 212 KKU criteria for determining the threshold of criminal responsibility. More, the issue of the customs value of goods is often the subject of a dispute between the declarant and the customs authority, and therefore cannot act as a threshold for criminal liability.

Significant risks for honest business are also seen in the proposed version of the Notes to Art. 201 CCU, which refers to smuggling, including the submission of documents to the customs authority as a basis for the movement of goods, containing false information about the name of the goods, their weight or quantity, country of origin, sender or recipient, the number of cargo spaces, their markings and numbers, false information, necessary to determine the product code according to the Ukrainian classification of goods of foreign economic activity and its customs value, which led or could lead to an unlawful exemption from payment of customs payments or a reduction in their amount. In practice, when declaring goods, the customs authority and the declarant often have disputes regarding the determination of the customs value, product code, country of origin, scales, etc. More, proposed revision of the article 201-3 does not imply necessityproving intent to commit a criminal offense.

The full text of the statement of the Ukrainian Business Council can be found at the link:єkt-pro-kriminalizacziyu-kontrabandi-nese-zagrozi-dlya-zakonosluhnyanogo-biznesu-zayava/

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