By KYIV. Dec 21 (Interfax-Ukraine) – Ukraine’s Bureau of Economic Security (BES) has identified a scheme for evading payment of export duties when exporting scrap ferrous metals, which the Ukrmetallurgprom association previously warned about.
According to a press release from BES, bureau analysts have found that since the beginning of 2022, more than 220,000 tonnes of scrap metal worth UAH 2.3 billion have been exported from the customs territory of Ukraine.
“At the same time, the risk associated with the export of scrap metal under the guise of goods used to hide it can reach hundreds of millions of hryvnia,” the BES said in the press release.
Since scrap metal is a strategic raw material for the metallurgical industry of the state, in order to provide domestic enterprises with a sufficient volume of raw materials, the legislation sets an export duty rate on waste and scrap ferrous metals at EUR 180 per tonne. However, a number of companies when exporting scrap metal use “cover” codes and descriptions of goods in customs declarations – such manipulation allows them to export goods without paying export duties.
Among the most common schemes: declaring scrap metal to customs authorities under the guise of used metal products or primary forms of metal.
“During the information and analytical work, Bureau employees discovered three enterprises that, by manipulating the product range, carried out export operations without paying customs duties for more than UAH 65 million. Analytical products were transferred to Bureau detectives,” the bureau said in the press release.
Earlier, the president of Ukrmetallurgprom, Oleksandr Kalenkov, stated in a column on the Interfax-Ukraine website: scrap metal is exported through the European Union, where there is a preferential export duty of EUR 3 per tonne, and from there the raw materials are redirected to real customers. He pointed out that exporting raw materials directly to customers would cost EUR 180 in export duties – and due to this the Ukrainian budget has already lost UAH 350 million.
According to him, the State Bureau of Investigation has already become interested in such export schemes.
The head of Ukrmetallurgprom called for a temporary ban on the export of ferrous metal scrap to provide metallurgical enterprises with strategically important raw materials in the context of the ongoing war. He also said that a tonne of scrap metal processed into steel brings the budget 10 times more than the export duty to the EU – about $300 per tonne.
