Export controls

General controls

What general controls are imposed on exports?

The following general requirements must be fulfilled to export products from Ukraine:

  • exporters shall provide customs authorities with the required set of documents for exporting products:
    • customs declaration;
    • invoices; contracts;
    • specifications; certificate of origin;
    • bill of lading;
    • documents confirming payment of customs fees and duties; and
    • various certificates, if it may be necessary for specific products (phytosanitary certificate, ecological certificate, permission to import (export) or to transit the narcotic drugs, psychotropic substances or precursors of narcotic drugs and psychotropic substances, veterinary certificate etc); 
  • exporters shall settle customs payments, if any are envisaged by the legislation current on the day of exportation. The notion of ‘customs payments’ includes customs duties, value added tax and excise duty (article 4.27 of the Customs Code);
  • exported products are subject to a zero value added tax rate (article 195 of the Tax Code) and are not subject to excise tax (article 213 of the Tax Code); and
  • export customs duties can be introduced by laws passed by the Ukrainian parliament – currently, Ukraine applies export duties to:
    • barley;
    • ferrous alloy scrap metal;
    • non-ferrous scrap metal and semi-processed products with that use;
    • waste and scrap of ferrous metal;
    • seed grains of certain sunflowers; and
    • livestock and certain leather primary products; and
  • exporters shall fulfil the requirements of non-tariff regulation if any are envisaged by legislation on the day of exportation (eg, licensing or certification).

 

An exporter shall be registered with a local customs office in order to perform export transactions.

In addition, pursuant to the Law on Foreign Economic Activity, it is generally prohibited in Ukraine to export the following:

  • goods considered part of the national, historical, archaeological or cultural heritage of the Ukrainian people;
  • natural resources that are exhausted, if this limitation also applies to the internal consumption or production;
  • products that infringe intellectual property rights;
  • goods subject to Resolutions of the UN Security Council regarding limitations or embargoes on supplying with goods in the proper state;
  • timber and lumber of value and rare breeds of trees; and
  • postal parcels that could pose a threat to life and health.

 

Ukrainian exporters must comply with currency restrictions prescribed in Resolutions of the Board of National Bank of Ukraine. These restrictions are claimed by exporters to have substantial trade-restrictive effects.

Since the beginning of martial law in Ukraine, the National Bank of Ukraine (NBU)has changed many rules and conditions designed to reduce the impact of the war on the Ukrainian economy. Since 4 April 2022, the NBU has expanded the list of cross-border transfers for volunteers and reduced the deadlines for settlements on export-import transactions (Resolution of the Board of the National Bank of Ukraine No. 68 of 4 April 2022 ‘On Amendments to the Resolution of the Board of the National Bank of Ukraine’ No. 18 of 24 February 2022).

At the request of banks and volunteers, now individuals are allowed to transfer foreign currency within the monthly limit of 400,000 hryvna (equivalent to the official NBU rate) to purchase a number of goods abroad.

The goods to which this rule applies are:

  • body armour;
  • helmets;
  • military and tactical uniforms and footwear;
  • protective clothing;
  • optical tracking devices;
  • unmanned aerial vehicles;
  • sleeping bags; and
  • care mats and means for rendering medical aid.

 

At the same time, the NBU reduced deadlines for settlements on export-import transactions. From 5 April 2022, settlements for such transactions should now be made after 90 days (previously, it was after 365 days). As explained by the NBU, this decision is temporary and its purpose is to prevent the withdrawal of capital abroad and the emergence of macroeconomic imbalances.

In addition, Ukrainian exporters face constant difficulties with value added tax returns, which are subject to burdensome administration and have become a systemic problem of the domestic tax system.

Government authorities

Which authorities handle the controls?

Legislative bases of state policy in the field of state export control are determined by the Ukrainian parliament.

The general management of state policy in the field of the state export control according to the Constitution of Ukraine is carried out by the president of Ukraine.

The National Security and Defense Council of Ukraine coordinates the activities and supervises the actions of executive bodies in the field of state export control.

The Cabinet of Ministers of Ukraine ensures the implementation of state policy in the field of state export control.

Export controls are also predominantly handled by the following authorities:

Special controls

Are separate controls imposed on specific products? Is a licence required to export such products? Give details.

Export controls are predominantly handled by the following authorities:

  • the Ukrainian parliament;
  • the Cabinet of Ministers;
  • the Ministry of Economy of Ukraine;
  • the Ministry of Foreign Affairs;
  • the State Fiscal Service;
  • the Ministry of Defence;
  • the Ministry of Energy and Environment Protection;
  • the Ministry of Finance;
  • the State Space Agency of Ukraine;
  • the State Nuclear Regulatory Inspectorate;
  • the Security Service of Ukraine;
  • the Foreign Intelligence Service of Ukraine;
  • the State Service of Export Control;
  • the State Service on Food Safety and Consumer Protection ; and
  • the National Standardisation Body – Ukrainian Research and Training Center of Standardisation, Certification and Quality and other authorities.
Supply chain security

Has your jurisdiction implemented the WCO’s SAFE Framework of Standards? Does it have an AEO programme or similar?

On 13 March 2012, the Ukrainian parliament passed a new version of the Customs Code in order to implement the World Customs Organization’s Secure and Facilitate Global Trade (SAFE) Framework of Standards into domestic customs legislation and harmonise it with several international treaties (in particular, the International Convention on the Simplification and Harmonisation of Customs Procedures, the Convention on Temporary Admission and the Customs Convention on the International Transport of Goods under Cover of Transports Internationaux Routiers carnets).

On 7 November 2019, the Law on Amendments to the Customs Code of Ukraine on Certain Issues of Functioning of Authorised Economic Operators commenced.

The Resolution of the Cabinet of Ministers of Ukraine No. 665 ‘On Some Issues of Functioning of Authorised Economic Operators’, 29 July 2020 (Resolution No. 665) was also adopted.

Resolution No. 665 allows interested companies to apply for AEO authorisation, and customs authorities to assess the company's compliance with AEO criteria and grant AEO authorisation.

In September 2020, the State Customs Service registered the first application for AEO authorisation.

It should be noted that the acquisition of AEO status is a rather long process: preliminary consideration of the application – 30 days, conformity assessment – 120 days.

According to Law No. 141-IX, in order to gain experience in both customs authorities and business, by 7 November 2021, customs authorities may consider no more than 20 applications for AEO authorisation simultaneously, and by 7 November 2022 – no more than 30 applications, respectively.

In January to February 2021, the following has been approved by governmental decisions:

  • Maintenance Procedure for the Unified State Register of AEOs;
  • form, description and rules of use of the national AEO logo and form of the AEO certificate; and
  • application forms of the enterprise for granting permission for application of special simplification and permission for application of special simplification.

 

Regulations governing the monitoring of compliance with AEO criteria, as well as the procedure for issuing/applying permits for the use of special AEO simplifications should be adopted in 2021.

Applicable countries

Where is information on countries subject to export controls listed?

Among other functions, the State Export Control Service takes measures to implement Security Council decisions establishing or cancelling an embargo on goods exports. It also provides for the monitoring and analysis of exports from Ukraine and the exchange of relevant information on exports of particular categories of goods with the relevant authorities of foreign states and international organisations.

Countries subject to export controls are defined by regulations adopted by the Cabinet of Ministers. These regulations are based on Resolutions of the UN Security Council. For instance, the Resolution of the Cabinet of Ministers No. 302 on Implementation of the Resolutions adopted by the Security Council of the UN regarding Libya, 18 April 2012, was passed to fulfil Resolutions No. 1970, dated 26 February 2011; No. 1973, dated 17 March 2011; No. 2009, dated 16 September 2011; No. 2016 dated 27 October 2011; No. 2017, dated 31 October 2011; No. 2022, dated 2 December 2011; or Order No. 359p of the Cabinet of Ministers on implementation of the Resolution UN Security Council No. 2231, dated 20 June 2015, regarding Iran.

Within the context of Russian military action against Ukraine and the occupation of Crimea, the National Security and Defence Council's decision of 27 August 2014 prohibited exports to the Russian Federation of military and dual-use production.

The countries currently subject to export controls are listed on the UN website. This list can also be found on the State Service of Export Controls’ website with the indication of the relevant Resolutions of the UN Security Council and the Regulations of the Cabinet of Ministers.

Named persons and institutions

Does your jurisdiction have a scheme restricting or banning exports to named persons and institutions abroad? Give details.

The Law No. 1644-VII on Sanctions, dated 14 August 2014 (the Law on Sanctions), provides for such a possibility in the form of the restriction of economic operations. The Law on Sanctions was amended on 17 December 2017, 19 September 2019, 17 July 2020 and 16 December 2020. This law permits the National Security and Defence Council to impose sanctions on specified persons by submission of the Ukrainian parliament, the Ukrainian president, the Cabinet of Ministers, the National Bank of Ukraine and the Security Service.

Penalties

What are the possible penalties for violation of export controls?

The penalty for violation of export controls is a fine, as envisaged by Ukrainian legislation. Individual licensing and temporary suspension of foreign economic activity as penalties were withdrawn from the Law on Foreign Economic Activity in early 2019. In accordance with the Resolution of the Cabinet of Ministers No. 1180 of 4 December 2019, more than 27,000 special sanctions applied in accordance with article 37 of the Law on Foreign Economic Activity until 7 February 2019 to subjects of foreign economic activity have been abolished.

The penalty may be imposed by the Ministry upon request by the fiscal authorities, National Bank of Ukraine, the Antimonopoly Committee, the Security Service and other authorities, or on the basis of a court ruling.