Adoption of the Law of Ukraine “On the Customs Tariff of Ukraine”

On 4 June 2020, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On the Customs Tariff of Ukraine”, which will enter into force on 1 July 2020.

This Law establishes the Customs Tariff of Ukraine, which is understood as an import duty on goods that are imported to the customs territory of Ukraine, systematized according to the Ukrainian Classification of Goods of Foreign Economic Activity (UCG FEA), compiled on the basis of the Harmonized Commodity Description and Coding System (HC).

The adoption of this law is caused by the need to bring the commodity nomenclature, which was built on the outdated HC 2012 in accordance with HC 2017 in compliance with the international obligations of Ukraine undertaken under the International Convention on the Harmonized Commodity Description and Coding System, as well as taking into account the obligations to the World Trade Organization.

At the same time, no change in the rates of import duty on goods is stipulated. The changes concern only the classification, inventory and additional units of measurement and accounting of individual goods.

The novelties of the law, according to the authors, are:

– specification of the procedure for setting or changing import duty rates;

– taking into account the latest amendments to the Customs Tariff of Ukraine provided for by the Law of Ukraine dd. 19.12.2019 No. 402-ІX “On Amendments to Certain Legislative Acts of Ukraine as to Improvement of the Legislation on Amber and Other Minerals Production” and the Law of Ukraine dd. 16.01.2020 No. 465-ІX “On Amendments to Certain Laws of Ukraine as to Improvement of Tax Administration, Elimination of Technical and Logical Conflicts in Tax Legislation”;

– applying from 1 April 2021 energy units (thousand kWh) as additional measurement and metering units for natural gas.

The adoption of the Act is expected to contribute to:

– Ukraine’s fulfillment of international obligations undertaken within the framework of the International Convention on Harmonized Commodity Description and Coding System;

– adaptation of the Ukrainian statistical system to international methods, standards and classification;

– simplifying the comparison and analysis of statistics, especially those related to international trade that are exchanged under international agreements or international trade negotiations;

– harmonization of non-tariff regulation measures on food safety, environmental protection, control of import and export of narcotic substances, precursors, military goods, dual-use goods, etc.;

– reduction of the costs associated with the need to re-describe, classify and codify goods when they are transferred from one system to another in the course of international trade, and to expedite and simplify customs clearance of goods in foreign trade operations.