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Penalties for violation of Import, Export or Transit procedures

Paragraph 28 Article 4 of the Customs Code of Ukraine (hereinafter referred to as the CCU) stipulates that the customs rules are the procedure on the transportation of goods, vehicles for commercial purposes across the custom border of Ukraine stipulated by this Code and other legislative acts of Ukraine, its submission to the incomes and fees authorities on conduction of the customs control and clearance, as well as operations with goods under customs control, or control over which conduct the incomes and fees authorities that were assigned by this Code and other laws of Ukraine.  

According to Article 458 of the CCU, the violation of customs rules is an administrative offense that constitutes an unlawful, guilty (intentional or negligent) acts or omissions that violate the procedure for the transportation of goods, vehicles for commercial purpose across the custom border is stipulated by this Code and other legislative acts of Ukraine, its submission to the incomes and fees authorities on conduction of the customs control and clearance, as well as operations with goods under the customs control or the incomes and fees authorities’ control stipulated by this Code or other laws of Ukraine and for which this Code prescribes the administrative liability. This Code prescribes the administrative liability for the offenses that do not belong to the criminal liability offences.

Article 459 of the CCU prescribes that the administrative liability for violation of customs rules is stipulated by this Code. Administrative liability for violation of customs rules can be applied to citizens who have reached the age of 16 at the time of committing such violation and in the case of violation of customs rules by enterprises – to officials of these enterprises.

Article 461 of the CCU prescribes the administrative penalties for violation of customs rules, in particular:

1)      notification;

2)      fine;

3)      confiscation of goods, vehicles for commercial purpose – direct infringements of customs rules, goods, vehicles with specially made repositories (caches) intended to conceal goods – direct infringements of customs rules (except for commercial vehicles used exclusively for the carriage of passengers and goods across the custom border of Ukraine by the specified routes and flights carried out according to the schedule of traffic on the basis of international agreements concluded according to the law), as well as vehicles intended for the transportation of goods - direct infringements of customs rules across the custom border of Ukraine outside the location of the customs authority.

Types of violations of customs rules are:

the violation of regime of the customs control zone - Article 468 of the CCU;

the unlawful operations with goods the customs clearance of which is not completed or with goods temporarily stored under customs control - Article 469 of the CCU;

the non-delivery of goods, vehicles for commercial purpose, submission of documents to the incomes and fees authority and charges of appointment, issuing them without the permission of the incomes and fees authority or it’s complete loss - Article 470 of the CCU;

the violation of the procedure for passing the customs control in zones (corridors) of simplified customs control - Article 471 of the CCU;

the non-declaring of goods, vehicles for commercial purpose - Article 472 of the CCU;

the forwarding of goods across the custom border of Ukraine in international postal and express shipments prohibited for such shipping - Article 473 of the CCU;

the interference of access to goods, vehicles, documents to an official of the incomes and fees authority - Article 474 of the CCU;

the non-submission of  goods under the customs control to the incomes and fees authority - Article 475 of the CCU;

the transportation of goods across the custom border of Ukraine with the violation of the intellectual property rights - Article 476 of the CCU;

the violation of the procedure on the import of goods to the free customs zone territory prescribed by the legislation, the export of goods outside this territory and / or the procedure for conducting operations with goods placed in free customs zone prescribed by the law - Article 477 of the CCU;

the violation of the procedure on the storage of goods in customs warehouses and operations with these goods - Article 478 of the CCU;

the violation of the procedure or terms on the disposal of goods placed in a duty-free shop - Article 479 of the CCU;

the violation of the procedure on the processing of goods - Article 480 of the CCU;

the exceeding the term of temporary import or temporary export of goods - Article 481 of the CCU;

the transportation or actions aimed at the transportation of goods, vehicles for commercial purpose across the custom border of Ukraine outside the customs control - Article 482 of the CCU;

the transportation or actions aimed at the transportation of goods across the custom border of Ukraine with concealment from the customs control - Article 483 of the CCU;

the storage, transportation or purchase of goods, vehicles for commercial purpose, imported to the custom territory of Ukraine outside the customs control or with concealment from the customs control - Article 484 of the CCU;

the actions aimed at unlawful exemption from the customs duties payment or reduction of its amount, as well as other unlawful actions aimed at evasion from payment of customs payments - Article 485 of the CCU.

Administrative penalty for violation of customs rules is applied according to the sanction of the specified Articles of the CCU.

Application of special sanctions regarding the subjects of foreign economic activity and foreign business entities for the violation of Ukrainian legislation

 One of principles of the implementation of the state sovereignty of Ukraine is its independence in the implementation and regulation of foreign economic relations.

Regulation of the foreign economic activity (hereinafter referred to as FEA) in Ukraine has the goal to balance the economy and the equilibrium of domestic market, stimulate progressive structural changes in the economy, including foreign economic relations of the FEA subjects, create the most favorable conditions for engaging Ukrainian economy in the system of world division of labor and its approach to the market structures of developed foreign countries.

Regulation of the FEA is carried out by: the laws of Ukraine; acts of tariff and non-tariff regulation stipulated by the laws of Ukraine, issued by the state authorities of Ukraine within their competence; economic measures of operative regulation (monetary, financial, credit and other) within the limits of the laws of Ukraine; decisions of the non-state governing authorities of the economy that are accepted under their statutory documents within the limits of the laws of Ukraine; agreements concluded between the FEA and that do not contradict the laws of Ukraine.

It is prohibited to regulate the FEA directly by the not specified acts and listed actions of the state and non-governmental authorities. Thus, the principle “rule of law” is ensured to the FEA only by the laws of Ukraine and the prohibition of the use of subordinate acts and management acts of local agencies that in any way create conditions less favorable than the stipulated by the laws of Ukraine for the subjects of foreign economic activity.

Ukraine forms the system and structure of the state regulation of the FEA in its territory independently that must provide:

-          protection of economic interests of Ukraine and legal interests of the FEA subjects;

-          creation of equal opportunities for the FEA subjects in order to develop all types of entrepreneurial activity regardless of ownership forms and all directions on usage of incomes and investments;

-          promotion of competition and liquidation of monopoly in the sphere of the FEA.

Article 6 and 19 of the Constitution of Ukraine stipulates that the legislative, executive and judicial authorities execute their authority within the limits stipulated by this Constitution and according to the laws of Ukraine. Authorities of the state power and local self-government, as well as their officials must act within the limits of authority and in the manner stipulated by the Constitution and laws of Ukraine.

 State and its authorities have no right to interfere in the FEA subjects directly, except for the cases when such interference is carried out according to the laws of Ukraine.

According to Paragraph 1 and 2 Article 544 of the Customs Code of Ukraine creation of favorable conditions for development of the FEA, ensuring the safety of society, protecting Ukraine’s customs interests is the function of incomes and fees authorities and the ensuring correct application, strict observance and prevention of non-compliance with the requirements of Ukrainian  legislation on the issues of the state customs service are identified as one of the main tasks performed by the incomes and fees authorities in carrying out the state customs service.

Law of Ukraine “On the foreign economic activity” dated April 16, 1991 № 959-XII (with amendments) stipulates the competence of the central executive authority on the issues of economic policy - the Ministry of Economic Development and Trade of Ukraine in particular, regarding the control over the observance by all the FEA subjects of the current laws of Ukraine and the conditions of international agreements of Ukraine; incomes and fees authorities - concerning the implementation of customs control in Ukraine according to the current laws of Ukraine.

Customs regulation of the FEA is carried out according to the principles prescribed in Article 13 of the Law of Ukraine “On the foreign economic activity", namely:

-          Ukraine carries out the customs regulation of foreign economic activity on its territory independently. The customs policy of Ukraine is determined by the Verkhovna Rada of Ukraine;

-           customs regulation of the FEA is carried out according to the Law, the Customs Code of Ukraine, the laws of Ukraine on customs regulation, the Unified Customs Tariff of Ukraine and international agreements of Ukraine;

-          licensing of the foreign economic operations is defined as a complex of administrative actions of an executive authority on issues of economic policy for granting permission on the export (import) of goods by the subject of foreign trade;

-          the FEA subjects (foreign business entities) that carry out dumping, as well as those countries that conduct the discriminatory actions against Ukraine, may take customs measures prescribed in Articles 29, 31 and 37 of this Law.

Sanctions can be applied to the FEA subjects or foreign business entities within 3 years from the date of detection of violation of the law.

It should be noted that the impoition of special sanctions may precede the official warning of the Ministry of Economic Development and Trade.

Ministry of Economic Development and Trade impose sanctions by the submission of the income and fees authorities and control and audit services, law enforcement authorities, authorities of the Antimonopoly Committee of Ukraine, the national commission that carries out state regulation in the sphere of financial services markets and the National Bank of Ukraine or by the court decision.

Submission of sanctions should include the following:

title and requisites of the FEA subject (for foreign business entities - in the language of the country of their location);

information on the content of the violation with reference to specific provisions of Ukrainian legislation,

type of special sanction suggested on the imposition,

title and requisites of the counterparty, in case of execution of contract that violated legislation, other relevant information.

Initiators of applications regarding the imposition of sanctions may send the materials on their cancellation (change of type, temporary suspension) to the Ministry of Economic Development and Trade if the imposed with sanctions the FEA subjects or foreign business entities have eliminated the violations of Ukrainian legislation or took practical measures that ensure the implementation of the Law of Ukraine “On the foreign economic activity” and / or the related laws of Ukraine.

Initiator of submissions is liable for the unreliability of information indicated in the submissions, regarding imposition, as well as the cancellation, change of the type, suspension of sanctions, on the basis of which the Ministry of Economic Development and Trade is taking appropriate decisions.

If the imposed with sanctions the FEA subjects and foreign business entities have eliminated the violations of Ukrainian legislation or took practical measures that ensure the implementation of the Law of Ukraine “On the foreign economic activity” and / or the related laws of Ukraine and complied its foreign economic activity in accordance with the laws of Ukraine or provided sufficient evidence of impossibility (futility) of the use of practical measures that guarantee the implementation of the law – such FEA subjects also have the right to submit relevant materials and to file an application for the cancellation (change of type, temporary suspension) of sanctions to the Ministry of Economic Development and Trade.

The liability for the unreliability of information submitted to the Ministry of Economic Development and Trade is carried by the FEA subjects.

The application must contain the following documents:

letter-appeal stating the reasons that led to the violation and the measures taken in order to comply its activity with the norms of Ukrainian legislation;

originals or certified copies of the materials (references) from the state authorities that conduct the FEA control and currency exchange control and / or currency control agents certifying the practical measures taken by the foreign economic operator to comply their activities with the norms of Ukrainian legislation.

The total time for considering such applications is not more than 30 calendar days.

Herewith, in order to clarify information, the Ministry of Economic Development and Trade may apply the requests for the obtaining additional materials (information) concerning the activities of foreign business entities that have appealed to the Ministry with the request for the cancellation (change of type, temporary suspension) of the sanction to the state authorities that conduct the FEA control, currency exchange control and currency control agents.

 Imposition of sanctions can be appealed in the court.

Representation of the state interests is provided by the Ministry of Economic Development and Trade as well as the state authorities that submitted applications for sanctions in the course of such court disputes. The appeal against the imposition of sanctions in the court before the final decision does not stop their action.

Source: Paragraph 1.4 Regulations on the procedure for issuing the one-time (individual) licenses approved by the Order of the Ministry of Economy of Ukraine dated 17.04.2000 No. 47 registered by the Ministry of Justice of Ukraine dated 05.05.2000 No. 259/4480; Paragraph 1.7 Regulations on the procedure for the application of special sanctions to the FEA subjects of Ukraine and foreign business entities prescribed in Article 37 of the Law of Ukraine “On the foreign economic activity” approved by the Order of the Ministry of Economy of Ukraine dated 17.04.2000 р. No. 52 registered by the Ministry of Justice of Ukraine dated 05.05.2000 under No. 260/4481 (with amendments and supplements).

In the case if the FEA subject or foreign business entity violated the procedure for the implementation of foreign economic activity stipulated by the Law of Ukraine “On the foreign economic activity" or other laws of Ukraine, the following special sanctions may be imposed to them, in particular:

imposition of fines in cases of untimely execution or failure to perform duties by such subjects stipulated by the laws of Ukraine. The amount of such fines is determined by the relevant provisions of the Laws of Ukraine and / or decisions of the judicial authorities of Ukraine;

individual licensing regime in cases of violation of the Laws of Ukraine that prescribe certain prohibitions, restrictions or procedures on the implementation of foreign economic operations by such subjects;

temporary suspension of the FEA in cases of violation of the Laws of Ukraine or actions that may cause harm to the interests of the national economic security.

Customs clearance of goods, the export (import) of which is subject to licensing, is carried out only if there is a corresponding license.

Chart

Types of licenses according to Article 1 of the Law of Ukraine “On the foreign economic activity”

Special license

Properly registered right on the  import of a certain product (goods) that is the subject of a special investigation and / or special measures to Ukraine during the established term

Open (individual) license

Permission on the export (import) of goods within a certain period of time (but not less than one month) with the definition of its total volume

General license

Open permission on the export (import) operations for a certain product (goods) and / or with a certain country (group of countries) during the period of validity of regime of licensing for this product (goods)

Export (import) license

Properly registered right on the export (import) of certain goods or currency funds for the purpose of investment and crediting during the established term

One-time (individual) license

One-time permission that has a nominal character and is issued for the implementation of each individual operation by a specific subject of foreign economic activity for a period not less than is necessary for carrying out an export (import) operation

 

Execution of foreign economic operations without corresponding licenses by foreign business entities entails the imposition of a fine according to Article 37 of the Law of Ukraine “On the foreign economic activity” in the amount of 10 percent of the value of the conducted transaction exchanged into Ukrainian currency at the official exchange rate of UAH to foreign currencies, established by the National Bank of Ukraine on the day of such operation.

Fines are collected by the incomes and fees authorities on the basis of relevant decisions of the Ministry of Economic Development and Trade according to the procedure stipulated by the Tax Code of Ukraine.

Individual licensing regime for the FEA activity is applied according to:

Article 37 of the Law of Ukraine “On the foreign economic activity” as a special sanction to the FEA of Ukraine for the violation of the specified Law and related laws of Ukraine (Articles 1, 2 of the Law of Ukraine “On the procedure for making settlements in foreign currency”, Article 2 of the Law Ukraine “On regulation of commodity exchange (barter) operations in the sphere of foreign economic activity”);

Regulation on the procedure on the imposition of the special sanctions prescribed for the FEA subjects of Ukraine and foreign business entities is stipulated by Article 37 of the Law of Ukraine “On the foreign economic activity” approved by the Order of the Ministry of Economy of Ukraine dated 17.04.2000 No. 52 registered by the Ministry of Justice of Ukraine dated 05.05.2000 No. 260/4481with amendments and supplements made by the Order of the Ministry of Economy of Ukraine dated 01.11.2000 No. 233, registered by the Ministry of Justice of Ukraine dated 17.11.2000 No. 835/5056 and by the Order of the Ministry of Economy and European Integration of Ukraine dated 08.11.2001 No. 226, registered by the Ministry of Justice of Ukraine dated 10.10.2001 No. 873/6064.

Consideration of foreign economic contracts and the issuance of licenses on the implementation of the FEA is carried out according to the Regulations on the procedure for issuing the one-time (individual) licenses, approved by the Order of the Ministry of Economy of Ukraine dated 17.04.2000 No. 47 registered by the Ministry of Justice of Ukraine dated 05.05.2000 No. 259 / 4480 (hereinafter referred to as the Regulations).

For reference. Provisions are defined by the unified procedure for issuing the one-time (individual) licenses to the FEA subjects in the case of imposition the special sanction  are prescribed in Article 37 of the Law of Ukraine “On the foreign economic activity”- an individual licensing regime for the FEA subjects and foreign business entities.

Regulation applies to all FEA subjects and foreign business entities that are subject to an individual licensing regime, regardless of their ownership forms and place of their registration. If an international agreement of Ukraine prescribes other rules that are different from the rules prescribed by the Regulations, the rules of the international agreement must be applied.

Procedure on issuing the one-time (individual) licenses

Licenses are issued according to the Procedure prescribed in Article 16 of the Law of Ukraine “On the foreign economic activity” and the Regulation on the procedure for issuing the one-time (individual) licenses, based on the applications from foreign business entities, submitted in the form established by the Ministry of Economic Development and Trade.

In order to obtain a license, applicants are usually referred to one executive authority. In case of need, it is possible to appeal to several executive authorities, but not more than 3.

Issuance of the one-time (individual) licenses (hereinafter - licenses) to the FEA subjects is carried out by the Ministry of Economic Development and Trade and the Ministry’s authorized authorities. 

Ministry of Economic Development and Trade may transfer the right to register and issue licenses to the relevant units of the state administrations (with their consent), taking into account the following criteria:

-          the export-import (barter) operations carried out by the FEA subject of Ukraine, the value of which does not exceed the amount equivalent to 40 thousand USD;

-          the implementation of the export-import (barter) operations by the foreign economic operator of Ukraine, the value of which does not exceed the sum equivalent to 250 thousand USD: in the case of delivery of goods at the expense of pre-payment - in the case of export or delivery of goods - upon the import.

Ministry of Economic Development and Trade exclusive right to register and issue licenses is determined by the following criteria:

-          realization by the FEA subjects all types of the FEA prescribed Article 4 of the Law of Ukraine “On the foreign economic activity”, except for export and import of goods, capital and labor, barter transactions and other activities based on forms of counter trade between foreign economic entities and foreign business entities, and taking into account the criteria according to which the Ministry of Economy transfers the right to register and issue licenses to the relevant departments of the state administrations (with their consent);

-          realization of all types of the FEA by the FEA subjects that has been transferred to an individual regime of licensing for the temporary suspension of the foreign economic activity according to Part 6 Article 37 of the Law of Ukraine “On the foreign economic activity”.

Consideration of applications for licenses may be made in the order of its submission which is determined by the dates of registration of applications, or simultaneously after the expiration of the declared term of their acceptance.

The day of filing the application for the license is the date of its registration in the Ministry of Economic Development and Trade or its authorized authorities which is confirmed by the corresponding record in the registration journal.

Such documents are submitted for obtaining the license:

-          letter-appeal on the registration of the license in an arbitrary form, signed by the head of the FEA subject on the official form;

-          application for the license. Application for obtaining the license must contain the following data: the full name of the FEA subject, the surname and the name of its head, the title and code of the products (goods) according to the Ukrainian classification of goods of foreign economic activity, the name of the manufacturer, consumer of products (goods), code and the name of state(-s) of origin and departure;  in the case of export, the code and the name of state(-s) of origin and departure; in the case of import, the validity period of the license, the quantity and value of the products (goods), the code and the name of the customs office, the full name and address of the seller and the buyer, type of transaction, currency for payment, main and additional units of measure of products (goods), agreement with executive authorities (if necessary), the reasons for requesting the license, special license terms. In order to file an application the documents and information may be required for the verification of the data specified in the application and the foreign economic agreement (contract);

-          copies of the contract, specifications, annexes and other documents that are integral parts of the contract, certified by the head of the enterprise;

-          copy of the certificate of the state registration, certified by the head of the enterprise;

-          certificate of the origin of goods or an expert conclusion with the definition of the country of origin and the code of the goods according to Ukrainian classification of goods of the foreign economic activity (submitted only for obtaining the license for the export of goods). These documents are issued by the Chamber of Commerce and Industry of Ukraine or regional chambers of commerce and industry;

-          copy of the payment order (filed upon receipt of the issued license) on payment of the state fee for the issue of license in the amount established by the Cabinet of Ministers of Ukraine to the State budget;

-          documents and information that certify the use of practical measures on the termination of offense by the subject. Such documents and information are taken into account in the process of issuing the license;

-          conclusion of the expert organization on the compliance of the contract price with the level of prices of the market situation for goods (works, services), supplied (executed, provided) for a specific foreign economic operation.

The FEA subjects are responsible for the reliability of the information submitted to the Ministry of Economic Development and Trade or its authorized authorities.

Documents are not accepted in the case of incorrect registration of an application for the license or submission of incomplete set of documents.

Application cannot be rejected in the case of minor mistakes in the documents submitted for obtaining the license, if they do not change the basic data that is contained in the application. The main data is prescribed by the conditions of the foreign economic agreement (contract).

The license is issued:

- in duplicate;

- for a period not less than is necessary for carrying out of the corresponding foreign-economic operation;

- to the representative of the subject with a condition of properly registered order for its acceptation and document certifying the individual.

The license cannot be transferred to other legal entities.

Fee is charged for the issue of license, the amount of which is prescribed by the Cabinet of Ministers of Ukraine, taking into account the actual costs associated with the application of the licensing procedure.

Decision of the Ministry of Economic Development and Trade or its commission authorized to issue or refuse to issue the license is taken not later than 15 working days from the date of registration of the application.

Refusal decision to issue the license is:

-          taken in case of the non-compliance of the submitted documents with the current legislation of Ukraine, requirements of the Regulation, as well as in the case of receiving the information on the non-use measures to bring the FEA subject activity in the sphere of foreign economic activity according to the requirements of the current legislation, the return of currency and material values from abroad by the Ministry of Economic Development and Trade from the state and controlling authorities;  

-          presented in the written form on the basis of the conclusions made by the departments that conduct examining of applications on the issue of licenses;

-          reasoned and accepted in the time limits set for consideration of applications, and sent (issued) to the applicant in writing form.

Licenses or letters with refusal decision on the issue of licenses are entitled to be signed by the First Deputy Minister, the Deputy Minister - the Head of the Department, the Deputy Minister according to the division of responsibilities, the director of the department for regulation of foreign economic activity or the official who replaces it.

Applicant has the right to appeal the decision according to the law in case of refusal decision on the issue of licenses.

An individual licensing regime operates until the elimination of violations of Ukrainian legislation or the application on the practical measures that guarantee the implementation of the Law of Ukraine “On the foreign economic activity” and / or related laws of Ukraine and canceled by the Ministry of Economic Development and Trade.

Temporary suspension of the FEA is valid till the moment of elimination the violations of Ukrainian legislation or application of practical measures guaranteeing the implementation of the Law of Ukraine “On the foreign economic activity” and / or related laws of Ukraine, but not more than 3 months from the date of approved corresponding decision of the Ministry of Economic Development and Trade. After temporary suspension of the FEA, subjects of foreign economic activity or foreign business entities are transferred to the Ministry of Economic Development and Trade for an individual licensing regime.

For reference. Prolongation of the temporary suspension of the FEA is carried out exclusively by the court decision. Prolongation of the temporary suspension by the Ministry of Economic Development and Trade is conducted on the basis of the information filed by the initiator for  the imposition of special sanction appeals to the court. In the decision-making process on the prolongation of the FEA temporary suspension, the court must indicate the term for which the sanction is prolonged. 

In the case of force majeure, filing a claim to the court of the country of location of the counterparty or the International Commercial Arbitration Court, the Maritime Arbitration Commission at the Chamber of Commerce and Industry of Ukraine on the recognition or collection of debt related to non-fulfillment of foreign economic conditions according to the contract (agreement) from the foreign business entity, as well as in case of taking measures in order to eliminate the violations of legislation, sanctions from the Ministry of Economic Development and Trade may be temporary suspended. Upon the expiration of termination of imposed sanction, its action is renewed without the additional decision of the Ministry of Economic Development and Trade.

One-time (individual) license is the basis for conducting a separate foreign-economic operation by the FEA subject that was imposed with a special sanction - an individual licensing regime.

Source: Paragraph 1.3 of the Section “General Provisions”.

In this case, a separate foreign economic operation is a complex of actions of the FEA subject and foreign business entity that falls under the definition of one of the types of the FEA prescribe by Article 4 of the Law of Ukraine “On the foreign economic activity” and includes a complete one-time transfer of goods (execution of works, provision of services) and completed calculations (in cash, goods and other forms) for this one-time transfer of goods (execution of works, provision of services).

Agreements (contracts) of the FEA subject that were imposed with special sanction - an individual licensing regime - contain all essential terms of the agreement that must be agreed by the parties, according to the current Ukrainian legislation. Any changes or amendments to the specified agreements (contracts) that change these essential conditions require the obtaining of new one-time (individual) license according to the procedure stipulated by the Regulation. In this case, the previously issued one-time (individual) license is canceled.

One-time (individual) license is the basis for the customs clearance of goods and deferral operations in the foreign economic activity of the FEA by subjects that were imposed with a special sanction.

In the case of non-fulfillment of the foreign economic operation in the term specified in the issued license, this license is the subject to re-registration in the manner prescribed for its issuing.

When the foreign partner makes an advance payment for a part of the product that is supplied or will be delivered under the foreign economic contract, the exporter makes the shipment of the goods at an amount equal to the amount of the prepayment according to the terms of the contract. Only after the export of the specified goods that corresponds to the completed calculations, the foreign-economic operation is considered to be completed, regardless of the number of deliveries that were carried out under this contract.

In the case of such deliveries by foreign economic entities that were imposed with special sanctions, the one-time (individual) license in the amount of 1 license is granted for all partial supplies delivered during the term of the license, in the volumes and limits of the contract specified in the one-time (individual) license.

In the case of non-fulfillment of the foreign economic operation in the term specified in the issued license, and if the license on the delivery of goods and / or their payment was carried out, the re-registration of the license is carried out only for the balance of supplies of goods under this license on the basis of the appropriate markings of the customs or on the balance of payment of goods on the basis of the respective marks of the authorized bank.

If one copy of the license with the relevant marks of the customs or the authorized bank on the delivery of goods and / or their payment is provided for the re-registration, it must indicate the location of the second copy of the license.

If one copy of the previously issued license remains in the customs authority, and the other one in the authorized bank, a copy of the license with the relevant marks and the location of the originals of the license must be certified according to the procedure established by the legislation for the re-issuing.

In the case of non-fulfillment of the foreign economic operation in the term specified in the issued license, but if the delivery of goods and / or their payment were not carried out, the re-issue of the license is made only if two copies of the previously issued license are provided. In all cases, Paragraph 21 of the license must contain the record: “Instead of license № ____ from _________’.

There cannot be the refusal on the customs clearance of goods licensed and loaded in bulk, in the case when the value, quantity or weight of such goods is insignificantly different from the indicated in the license. The marginal difference between such values is stipulated by the Cabinet of Ministers of Ukraine by the submission of the Ministry of Economic Development and Trade.

If the FEA is performed by a foreign economic subject before the imposition of the special sanction to it or its foreign counterparty, then the subject receives the one-time (individual) license for this operation within 5 working days after the documentary confirmation of the fact on the execution of part of this operation. Information about these issued one-time (individual) licenses is given to the relevant territorial office of the SFS.

The Ministry of Economic Development and Trade monthly informs and Trade about issued licenses on the export (import) of goods that are subject to licensing.

The SFS monthly submits information on the volume of export (import) of goods under issued licenses to the Ministry of Economic Development and Trade.

The SFS and the Ministry of Economic Development and Trade explanations on some issues of customs clearance of certain foreign economic operations of the FEA subjects that are subject to the imposition of the special sanctions prescribed in Article 37 of the Law of Ukraine “On the foreign economic activity”, in particular, the individual licensing regime.

Regarding the temporary export / import of goods

According to the Customs Code, the temporary import (export) is a customs regime under which goods can be imported to the custom territory of Ukraine or exported beyond the custom territory of Ukraine with the obligatory subsequent return of these goods without any changes.

Taking into account the definition of the FEA and its types, according to Article 1, 4 of the Law of Ukraine “On the foreign economic activity”, the temporary import of goods to the custom territory of Ukraine or export outside the custom territory of Ukraine with the obligatory subsequent return of these goods without any changes that not related to the relationship (establishment or termination of the relationship) between the subjects of economic activity, that actually is not the FEA and does not require the issuance of the one-time (individual) license.

In the case of the return of goods that were temporarily imported / exported to / from the custom territory of Ukraine by the business entity (Ukrainian or foreign) that were imposed with the special sanctions according to Article 37 of the Law of Ukraine “On the foreign economic activity”, customs clearance is carried out without the provision of the one-time (individual) license to the FEA entity, regardless of when the temporary import / export of goods to / from the territory of Ukraine was made - before or after the imposition of the special sanctions.

Temporary import of goods to the custom territory of Ukraine or export outside the custom territory of Ukraine, executed for the purpose of one of the types of the FEA as defined in Article 4 of the Law of Ukraine “On the foreign economic activity” or the establishment of other relationships between economic entities, requires the execution of the one-time (individual) license by the subject of foreign economic activity that was imposed with the special sanction.

In particular, if the temporary export / import of goods from / to the territory of Ukraine is carried out according to the foreign economic contract on the provision of services that falls under the definition of one type of the FEA, as prescribed in Paragraph 3 and 11 Article 4 of the Law of Ukraine “On the foreign economic activity”, the imposed with the special sanction subject of the foreign economic activity must issue the one-time (individual) license for the foreign economic operation to the Ministry of Economic Development and Trade specified by the terms of the contract (i.e. the total cost of works (services), export / import that are under the temporary import / export of goods to / from Ukraine under foreign economic contracts). Meanwhile, the Paragraph 8 of the license should contain the record “export / import of services” and in Paragraph 6 and 7 their total value is determined. In Paragraph 21 “Special conditions” of the one-time (individual) license, there should be a record of the title of the goods that are subject to temporary export / import, its code according to Ukrainian classification of goods of foreign economic activity, the mortgage value and quantity.

Import / export of the humanitarian aid

According to Article 1 of the Law of Ukraine “On the Humanitarian Aid”, the humanitarian aid is targeted addressed free of charge assistance in cash or natural form, in the form of irrevocable financial assistance or voluntary donations, or assistance in the form of works, provision of services provided by the foreign and domestic donors originated from humanitarian motives to recipients of humanitarian aid in Ukraine or abroad who need it due to the social, material insecurity, difficult financial situation, the state emergency, in particular in the result of a natural disaster, accidents, epidemics and epizootics, environmental, man-made and other catastrophes that pose a threat to the life and health of the population, or a serious illness of specific individuals, as well as to prepare for armed protection of the state and its protection in the event of armed aggression or armed conflict. Humanitarian aid is a kind of philanthropy and should be directed according to the circumstances, objective needs, the consent of its recipients, and subject to the requirements of Article 3 of the Law of Ukraine “On Charitable Activities and Charitable Organizations”.

Taking into account the mentioned above and the definition of a separate foreign economic operation, issued by the Ministry of Economic Development and Trade Order No. 52 of April 17, 2000, the operations on import / export of humanitarian aid cannot be assigned to the separate foreign economic operation and do not require the provision of the one-time (individual) license.

According to Article 5 of the Law of Ukraine “On the Humanitarian Aid” the recognition of humanitarian aid for goods, funds, including the foreign currency, executed works, rendered services, as well as control over receiving, distribution, use for the purpose, preparation of statistical reporting, accounting of humanitarian aid recognized as such by the decision of the specially authorized state authority for humanitarian aid is carried out by the specially authorized state authorities on the humanitarian aid issues.

Article 4 of the Law of Ukraine “On the Humanitarian Aid” stipulates that the special authorized state authorities on the humanitarian assistance who have the right to recognize goods of the humanitarian aid are:

the central executive authority that implements the state policy in the sphere of social protection of the population (Ministry of Social Policy);

the сouncil of Ministers of the Autonomous Republic of Crimea;

the state administrations of regional cities, Kyiv and Sevastopol.

Specially authorized state authorities on humanitarian aid make decisions in agreement with the incomes and fees authorities and central executive authorities that ensure the formation and implementation of the state policy in the sphere of health protection, sphere of economic development, state financial policy, state policy in the sphere of the Civil Protection, the Ministry of Internal Affairs of Ukraine, the authorities of the National Police, the National Bank of Ukraine or its affiliates (territorial directorates).

Thus, if the specially authorized state authorities on humanitarian aid have recognized humanitarian aid as goods, money, including the foreign currency, executed works, rendered services, the customs clearance of this humanitarian aid, imported / exported to / from the custom territory of Ukraine that are the imposed with the special sanctions the FEA subject according to Article 37 of the Law of Ukraine “On the foreign economic activity” is carried out without giving the one-time (individual) license to the customs authorities.

Import of technical and humanitarian aid goods according to international governmental agreements on the humanitarian, technical and economic cooperation

In the case of imposition of the special sanctions to the FEA subjects prescribed by Article 37 of the Law of Ukraine “On the foreign economic activity” the one-time  (individual) license is issued to them for the FEA according to the Regulation on the procedure for issuing the one-time (individual) licenses, approved by the Order of the Ministry of Economy of Ukraine dated April 17, 2000 No. 47, registered by the Ministry of Justice of Ukraine dated May 5, 2000 under No. 259/4480 (with amendments).

Operation of this Provision applies to all subjects of the FEA and foreign business entities that are subject to an individual licensing regime, regardless of their ownership forms and place of registration. If an international agreement of Ukraine establishes other rules than provided by this Regulation, the rules of the international agreement must be applied.

Import of international technical assistance cargoes to the custom territory of Ukraine is carried out upon the execution of international agreements on humanitarian, technical and economic cooperation.

According to the Procedure for the involvement, international technical assistance (ITA) is the use and monitoring of international technical assistance, approved by the Resolution of the Cabinet of Ministers of Ukraine dated 15.02.2002 No. 153, the financial and other resources and services provided by donors under the international agreements of Ukraine on a non-repayable and irrevocable basis with a view to support Ukraine.

According to the Regulation on the Ministry of Economic Development and Trade of Ukraine, approved by the Cabinet of Ministers of Ukraine dated 20.08.2014 No. 459 (with amendments), the Ministry of Economic Development and Trade provides the formation of strategic and annual programs for the attraction of the ITA according to the main directions of the socio-economic development of Ukraine and coordinates activities, associated with the attraction of such assistance, conducts state registration / re-registration of projects (programs) of the ITA in Ukraine, maintains a single register of projects implemented in Ukraine using recourses of international financial organizations and ITA.

Thus, if the validity of the goods in the MTA is confirmed by the Ministry of Economic Development and Trade, the customs clearance of such cargoes in case of imposition of the special sanctions prescribed in Article 37 of the Law of Ukraine “On the foreign economic activity” to the recipient or donor is carried out without the provision of the one-time (individual) license to the customs.

Regarding the commodity exchange (barter) operations

According to Article 1 of the Law of Ukraine “On the regulation of the commodity exchange (barter) operations in the sphere of the foreign economic activity” the commodity exchange (barter) operation in the sphere of the foreign economic activity - one of the types of export-import operations, executed barter or a contract with a mixed form, as well as payment provided with partial payment on the export (import) supplies is provided in natural form, between the subject of foreign economic activity of Ukraine and the foreign subject of economic activity, which provides a balanced exchange by the value of goods, works, services in any combination without indirect cash flow in the cash or by the bank transfer.

Therefore, in order to conduct the foreign trade barter operation, the customs clearance is carried out due to condition that if the imposed with special sanction FEA subject will provide the one-time (individual) license of the Ministry of Economic Development and Trade for the foreign economic operation on the export / import of goods.

If the FEA subject has not started the foreign economic barter operation at the time of application for obtaining the one-time (individual) license, the first sheet of the license specifies the specific volume and cost of the exported product, and the second sheet - planned volume and cost intended to be imported.

In the case when the FEA subject’s contract is in the stage of execution, that is, the actual export or import supplies of goods have been made to the application of the individual licensing regime, the one-time (individual) license is issued for the volume of products intended to be exported or imported. However, the FEA subject provides a copy of customs declarations certifying the implementation of the specified supplies of goods to the Ministry of Economic Development and Trade or the authorized authority. Record of the actual execution of the contract at the time of obtaining the one-time (individual) license, that is, the number and value of the previously exported / imported goods and the indicated numbers of customs declarations, must be made on the basis of customs declarations certifying the implementation of the specified supplies of goods in Paragraph 21 or 41 of the license registered by Ministry of Economic Development and Trade (depending on what was done earlier, export or import).

Original of the one-time (individual) license remains at the customs office that conducted the clearance of cargo.

Regarding the parties of the foreign economic activity contract and the consignee / consignor

In other cases, the imposition of the special sanction regarding Ukrainian entity of foreign economic activity or the foreign economic entity that directly acts as a party to the foreign economic contract concluded according to the requirements prescribed in Article 6 of the Law of Ukraine “On the foreign economic activity” that imposes the rights and obligations on its implementation in the process of conducting the foreign economic operation - the customs clearance is carried out by the condition of providing the one-time (individual) license for the foreign economic operation with export / import of goods (works, services) to the Ministry of Economic Development and Trade.

In the presence of materials confirming the transfer of property rights to the consignee / consignor of goods or calculations under the foreign economic contract – the customs clearance of goods must be carried out within the presence of the one-time (individual) license issued by the Ministry of Economic Development and Trade.

In the case of the imposition of the special sanction regarding the consignee / consignor who is not a party of the foreign economic contract – the customs clearance of goods is carried out without providing the one-time (individual) license to the customs authorities

It should be noted that according to the Law of Ukraine dated June 21, 2018, No. 2473-VIII “On the currency and currency transactions” that will become valid starting from 07.02.2019, the Article 37 of the Law of Ukraine “On the foreign economic activity” will be excluded.