The EBA urges the government not to impose manual regulation of agricultural exports

Ukrainian agrarians warn parliamentarians against adopting draft laws “on the fight against shadow export of grain.”

Two draft laws – No. 10168-2 and No. 10169-2 are likely to create corruption risks – due to the possible establishment of a manual mode of regulation of agricultural exports. This was announced in the EBA.

Export control of companies with a global name and long-term experience in the Ukrainian market should be different from the measures applied to companies that can be attributed to a more risky inspection profile.

Therefore, it is necessary to establish clear criteria by which the potential riskiness of operations will be determined.

According to the EBA, it is likely that until the second reading in draft law No. 10168-2, the regulations regarding the possibility of blocking export tax invoices will remain.

“It is worth emphasizing that blocking the tax invoice in the context of this mechanism will mean blocking the physical export of goods. Therefore, the experts of the Grain and Oil Crops Committee of the European Business Association warn that the consequence of the physical blocking of exports may be the collapse of the entire system of seaports of Ukraine,” the statement reads.

In addition, business representatives express concern that tax authorities will be able to block exports, recognizing real trade transactions as fictitious.

Another provision that the EBA does not support is the procedure for establishing the minimum allowable export prices. According to the draft laws, prices will be set only once a month, which in many cases does not reflect the real level of prices on the agricultural market. The consequence of the introduction of such a mechanism will be the impossibility of concluding and executing contracts at current market prices.

Also, in both draft laws, rules are written so that it will be prohibited to mix wheat to achieve the necessary export specifications. And this is critical for the agricultural industry, the EBA emphasized.

Earlier, the American Chamber of Commerce did not support new draft laws. The US agency believes that they create significant corruption risks and potential blocking of the export flow of agricultural products from Ukraine.

As a reminder, on April 4, the Tax Committee of the Verkhovna Rada approved draft laws 10168-2 and 10169-2 for the second reading.They are declared as those that will help to fight against “shadow” export of grain and non-return of foreign exchange.