Agrarian associations ask to cancel order of Odesa authorities, commander of Odesa district limiting grain exports

KYIV. Sept 19 (Interfax-Ukraine) – A number of agricultural associations appealed to the President of Ukraine with a request to cancel the order of Odesa Regional Military Administration and the commander of the Odesa task force limiting grain exports, and to the Antimonopoly Committee of Ukraine and the State Regulatory Service to consider violations of anti-competitive laws and principles of the state regulatory policy, the press service of the Ukrainian Grain Association (UGA) has reported.

According to the report, order No. 19 “On some issues of financial discipline under the legal regime of martial law” dated August 18, 2023, which significantly complicates the export of grain through Odesa region, was adopted with excess of authority, violates the Constitution and is contrary to the laws of Ukraine, and also carries significant corruption risks.

According to agricultural associations, the document, instead of combating shadow schemes, actually led to a complication of the work of leading grain exporters.

“The consequences of the order are already noticeable on the grain market, including grain shipments through the Danube ports have been stopped, the fleet is idle, and farmers are suffering losses. In addition, this order has negative consequences for the country’s budget and its reputation as a reliable supplier of food to the world market,” the associations said in the appeal.

The UGA reported that it had previously appealed to the head of Odesa Regional Military Administration with a request to cancel the order, but the administration did not respond to it.

According to the UGA, lawyers from the Interlegal international law firm, at the request of the association, analyzed this order, which provides for additional documentary requirements for exporters from regulatory authorities when registering cargo in the export regime.

Lawyers from Interlegal found that such requirements are not provided for by customs legislation. In addition, the legislation does not provide the military command and military administration with the authority to introduce new procedures, deadlines for customs clearance of goods and the fulfillment of tax obligations by business entities. The order does not define how it will influence the creation of appropriate conditions for the stable operation of civil shipping in the Black Sea, and will ensure financial discipline, accounting and reporting.

According to clause 1 of the order, business entities are recommended to provide Odesa customs (subordinate customs posts) with PP-type customs declarations 10 calendar days before the date of actual loading of property (cargo). On the day of filing a PP-type customs declaration, all tax invoices regarding the actually loaded goods must be registered.

Customs and tax legislation, the UGA recalled, does not provide for such requirements, and Ukrainian legislation in no way links the filing of a customs declaration with the loading of goods/cargo onto a ship. The Tax Code does not provide for the obligation of taxpayers to register tax invoices before submitting a periodic customs declaration when exporting goods.

In addition, the Tax Code provides that customs clearance precedes the creation of a tax invoice and entitles the taxpayer to register this tax invoice within at least 15 calendar days. Consequently, the provisions of the order contradict the Tax and Customs Codes of Ukraine.

Interlegal also said that the order was not registered by the Ministry of Justice of Ukraine, therefore it is not a legal act. Moreover, according to Article 92 of the Constitution of Ukraine, the foundations of foreign relations, foreign economic activity, and customs affairs are determined exclusively by the laws of Ukraine. Also, the taxation system, taxes and fees are established exclusively by the laws of Ukraine.

There are sufficient grounds to believe that joint order No. 19 “On certain issues of financial discipline under the legal regime of martial law” is not a regulatory legal act and is not an integral part of tax and customs legislation, the UGA claimed.

“The order is valid only on the territory of Odesa region, which significantly limits the activities of business entities that export cargo through Odesa customs. At the same time, the new rules for customs clearance and fulfillment of tax obligations do not apply to business entities using other logistics routes, for example, through the railway and road transport through customs and border crossings in western Ukraine,” the agricultural associations said.

Business organizations are convinced that the order may distort competition at the industry level in the field of transportation in the export of goods mode, while at the same time introducing competitive obstacles in the transportation of grain cargo by sea through the ports of Odesa region and other modes of transport when crossing the state border in Odesa region.

“General Order No. 19 ‘On certain issues of financial discipline under the legal regime of martial law’ and the Procedure were adopted beyond the scope of authority and do not comply with the Constitution of Ukraine and the laws of Ukraine,” the agricultural associations concluded.

The appeal to the President of Ukraine, the Antimonopoly Committee and the State Regulatory Service was signed by the Ukrainian Grain Association, the Ukrainian Agrarian Forum, the Agrarian Union of Ukraine, the Ukrainian Agrarian Council, the Ukrainian Agrarian Confederation, and the Ukrainian Agribusiness Club.


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