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Import and Export

In 1993, Ukraine applied for WTO membership and the Working Party concluded negotiations on January 25, 2008 under Chile’s Ambassador Mario Matus. The WRO General Council then approved the Working Party report, the market access schedules on goods and services, the General Council Decision, and the Protocol of Accession. On May 16, 2008, Ukraine became the WTO’s 152 member.

Ukraine’s WTO commitments include:

Market access to goods

As outlined in Ukraine’s market access schedules, the country has to cap its customs duties at rates ranging between zero and 50% (bound rates). Some bindings involve reductions phased in over a period of up to five years, that is, until 2013.
Ukraine’s average tariff bindings are 10.66% for agricultural products and 4.95% for industrial goods.

The highest tariffs Ukraine may apply are on items such as sugar (50%) and sunflower seed oil (30%). Other products with tariff ceilings of 25% include certain radio-broadcast receivers, catgut, and certain conveyor/transmission belts.

Product categories with lower tariffs that will initially or eventually be eliminated include civil aircraft, construction equipment, distilled spirits, certain types of fish, pharmaceuticals, certain chemicals and petroleum oils, medical equipment, wood, pulp & paper, certain yarns and fabrics, certain base metals, steel, information technology products (ITA), furniture, and toys.
Ukraine has agreed not to apply any “other duties and charges” beyond its ordinary customs duties.

In agriculture, Ukraine has agreed not to subsidize exports. Ukraine will limit its trade-distorting domestic support provided to farmers to UAH 3.04bn or about US $613mn, as well as an allowance of 5% of the value of domestic agricultural production. As with all WTO members, Ukraine will have no spending limits on domestic support programs that have no or minimal impact on trade, provided these programs meet the criteria laid down in the Agreement on Agriculture.

Ukraine was to open a tariff quota on raw cane sugar at 260,000 t annually, rising to 267,000 t by 2010. This quota was to be administered on a first-come, first-served basis within 3 years of accession.

Market access to services

Ukraine has made specific commitments in all 11 “core” service sectors: business services, communication services, construction and related engineering services, distribution, education and environmental services, financial services (insurance and banking), health and social services, tourism and travel, recreational, cultural and sporting services, and transport services, as well as in other areas including beauty, hairdressing, spa and massage services.

Import requirements

Import licenses are required for: plant protection chemicals; optical polycarbonates for manufacturing laser-readable disks; postage and similar stamps and officially stamped paper; printer’s ink, and paper with watermarks; copper sulfate; ozone-damaging substances and products that are likely to contain ozone-damaging substances.

A mandatory certification procedure was introduced in 1993 to ensure that imported goods comply with domestic standards. A Ukrainian Compliance Certificate is issued by UkrSEPRO, the Ukrainian certification agency, for a wide range of imported goods.

Effective as of 23 September 2015, Ukraine’s Government has introduced test customs values for imported goods released for free circulation. According to the authorities, such values would be used in the risk management system maintained by customs for ensuring a uniform approach to verifying the actuality and accuracy of the imported goods’ declared customs value.

The test values are determined on the basis of average customs values of imported goods, depending on tariff code and country of origin, and calculated for the past six months. The test values do not apply to military and dual-use goods, and goods traded on commodity markets. The test values are used only in internal customs databases and are not publicly available.

The test values will be revised monthly. Officially, the test values do not represent minimum customs values that are prohibited by both WTO norms and Ukrainian customs legislation. However, deviation from the test value may trigger risk of a customs valuation dispute.

The governmental resolution does not provide for any clear procedure on how customs officers are to use the test values. In practice, however, the customs authorities challenge the declared customs value of imported goods on the sole ground of the invoice value of the goods being lower than the test value. This may lead to delays in customs clearance, and the customs authorities may increase the customs value, which burdens importers with payment of excessive import duty and value-added tax (VAT).

In case of any deficiencies in the basic documentation (invoice, contract, transport documents, etc.), customs may reject the declared value under the transaction value method and proceed with customs valuation using other methods, taking into account the test values. Therefore, importers must ensure they have adequate supporting documentation.

Export requirements

Export contracts for certain categories of products, such as those subject to anti-dumping regulations, must be registered with the Ministry of Economy. The main items subject to licensing and/or quotas that can be exported from Ukraine are: precious metals and stones; rolled steel products exported to the US and optical polycarbonate for manufacturing laser-readable disks; textile products exported to the US; ozone-damaging substances and products that may contain ozone-damaging substances; certain commodities exported to Macedonia, Lithuania, Latvia and Poland; meat and certain metal products exported to the EU; certain goods exported to Russia; certain non-ferrous and alloyed metal products; printer’s ink; paper with watermarks; and coal-tar resin.

Goods crossing Ukraine’s border have to be declared to the customs authorities, either by the importer or by a licensed customs broker on behalf of the importer.

Imported goods must be accompanied by all the proper documents. The lack of any document or its non-compliance with legislation can cause delays during customs clearance.

Customs classification of goods

UCFEA, the Ukrainian Classification of Foreign Economic Activities is based on the Harmonized Commodity Description and Coding System (1996) and EC Combined Nomenclature (2000) and is the effective customs classification system in use. UCFEA serves as the basis for Ukraine’s Customs Tariff. Ukraine is a member of the International Convention on Harmonized Commodity Description and Coding System.

Trade agreements

Ukraine has concluded free trade agreements with 11 countries: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Macedonia, Moldova, Russia, Turkmenistan, and Uzbekistan. Other countries that have established favorable trade regimes with Ukraine include: Austria, Algeria, Argentina, Belgium, Bosnia & Herzegovina, Bulgaria, Brazil, Canada, China, Croatia, the Czech Republic, Cuba, Cyprus, Denmark, Egypt, Estonia, Finland, France, Germany, Great Britain, Guinea, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, the Korean People’s Democratic Republic, Latvia, Lebanon, Libya, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mongolia, the Netherlands, Norway, Poland, Portugal, Romania, Serbia & Montenegro, Slovakia, Slovenia, the South African Republic, South Korea, Spain, Switzerland, Sweden, Tunisia, Turkey, the United Arab Emirates, the US, and Vietnam.
 
Since Ukraine joined the WTO, the negotiations on free trade area between the EU and Ukraine were launched.
 
Temporary import relief
 
Permission for temporary import (export) with a full conditional exemption from import taxes may be issued for a number of items:
 
  • Goods intended for display or use during exhibitions, fairs, conferences and similar events.
  • Professional equipment used by the media or required for making films.
  • Containers, pallets, packaging or any other goods imported in connection with commercial transactions.
  • Samples of goods and advertising films for non-commercial use, provided they remain in the ownership of an entity or person established outside Ukraine.
  • Goods imported for educational, scientific or cultural purposes.
  • Personal items belonging to passengers and goods imported for sporting purposes.
  • Materials for tourism and advertising.
  • Vehicles used to move passengers and goods across Ukrainian border.
  • Sea vessels and aircraft imported for repair.
  • Equipment and materials designated by non-residents for the construction and repair of sea vessels and aircraft.

Customs duties incentives

 
Contributions to capital
 
Property other than re-saleable goods contributed by a foreign investor to the statutory capital of a Ukrainian entity may be imported free of customs duty, but will still be subject to VAT. Customs duty must be repaid if the property is disposed of within three years of importing.
 
Toll manufacturing
 
Raw materials imported into Ukraine for processing under tolling arrangements enjoy an exemption from import taxes and duties, provided the finished products are re-exported from Ukraine within a 90-day period. The processing must meet five criteria:
 
  • Raw materials and finished goods must belong to the foreign customer.
  • The tariff code must change as a result of processing.
  • The cost of the raw materials must be at least 20% of the value of the finished goods.
  • The imported raw materials must be the main component at each stage of production.
  • Finished goods other than agricultural products may be sold in Ukraine after tolling.

 However, to undertake such sales, the non-resident owner of the finished goods must register a permanent establishment in Ukraine and pay applicable import taxes and duties.

Representative offices
 
Representative offices of foreign companies may import goods for official use that are not intended for resale temporarily for up to three years from the date of accreditation of such a representative office. Temporary import can be extended.
 
Documentation and procedures
 
All goods crossing the border are subject to customs control, which includes specific procedures aimed at ensuring compliance with customs rules. Customs officials may conduct post-entry audits to verify compliance with customs and tax legislation.
 
In addition to customs control, other types of border control including sanitary, veterinary, phytosanitary, radiological, ecological controls and control over cross-border movement of art, may be conducted.
 
Registration of importers
 
Any business entity that is engaged in import operations is required to register with the customs office that serves the area in which the company is located. Customs clearance of goods in another customs office requires permission from the customs office where the entity is registered.
 
Documentation
 
Goods crossing Ukraine’s border must be declared to the customs authorities, either by the importer or by a licensed customs broker on behalf of the importer.
 
The import of goods must be supported by complete documentation. These eight import documents are required for all shipments to Ukraine:
  • Import customs declaration
  • Cross-border contract
  • Invoice
  • Waybill
  • Certificate of compliance certificate (if applicable)
  • Certificate of origin
  • Evidence of payment of customs duties and taxes
  • Any other documents as may be requested by Ukrainian Customs
Missing or deficient documents can cause delays during customs clearance.
 
Declared customs value

Customs value is declared by filing a declaration of customs value, including a reference to the valuation method used. The importer must also provide relevant documents to prove the declared customs value (DCV). If these documents are not available or the customs office has reasonable doubts about the data provided by the importer, the customs office may determine the customs value based on available information. This may include information available to the authorities on prices for identical or similar goods.

When the DCV requires review or the importer does not agree with the customs value determined by the customs office, the importer may request the customs office to release the goods for free circulation against payment of import taxes. The importer may then appeal the determination of the customs value by the customs authorities to a higher customs office or to the courts.

Exports

Restrictions

A limited number of exports are subject to licensing and/or quotas. Examples include precious metals and stones, rolled steel products and textile products exported to the US, meat and certain metal products exported to the EU and Russia, and oil or gas of Ukrainian origin.

The Ministry of Economy has established mandatory indicative export prices for certain categories of goods, such as metal products, livestock and rawhide, and sunflower seeds. The Customs authority will not clear the export of goods if the sales price is below these indicative prices.

Registration of exporters

Any business entity that is engaged in export operations is required to register with the customs office that serves the area in which the company is located. Customs clearance of goods through another customs office requires specific permission from the customs office where the entity is registered.

Export duties

Ukraine has no export duties except on natural gas, scrap metal, livestock, rawhide, and certain oil seeds. Exported goods and ancillary services are zero rated for VAT purposes.

Customs processing fee

Customs clearance for exported goods is subject to a customs processing fee, calculated as 0.2% of the declared customs value, up to a maximum of US $1,000 per customs declaration. The fee does not apply, however, to goods re-exported under a toll arrangement.