Criminal liability for smuggling of all goods: how violators will be punished

The European Business Association reminds that as of July 1, 2024, Law 5313-IX introduced criminal liability for smuggling for all goods:

• worth from UAH 7.57 to 15.14 million - liability in the form of a fine of UAH 170 to 425 thousand
• for goods worth more than UAH 15.14 million - from UAH 850 thousand fine to 11 years' imprisonment with confiscation of property.

The law came into force for excisable goods on January 1, 2024. In particular, liability is provided for smuggling of goods

• worth from UAH 1.136 to UAH 2.271 million - in the form of a fine of UAH 340 thousand to 6 years in prison;
• worth more than UAH 2.271 million - from UAH 1.275 million fine to 12 years in prison with confiscation of property.

The law was adopted with some amendments insisted on by the business. The main achievement of the European Business Association in the process of working on this initiative was the abolition of criminal liability for "false declaration" (unintentional errors in the declaration). Also, thanks to the EBA's efforts, the thresholds for the value of violations for the application of criminal liability were significantly increased.

It is worth reminding that the State Customs Service and the Bureau of Economic Security (BES) will be responsible for the controlling function in relation to the above-mentioned offenses. The results of the first half of the year regarding the situation with the criminalization of smuggling of excisable goods demonstrate the need for real reforms in the State Customs Service, increased motivation and financial support for customs officers, and their professionalism, as well as the need to develop cooperation with the customs authorities of neighboring countries within the framework of international customs cooperation.

In addition, we hope that soon the business will see a real reform of the BES and the effective work of the new body, which, in particular, should carry out pre-trial investigations of offenses related to commodity smuggling. This is extremely important for Ukraine's economy.

According to the State Customs Service, the number of detected offenses in Q1 2024 increased almost 4 times compared to the same period in 2023. Thus, customs officers reported 2,356 violations of customs rules worth UAH 4.8 billion. Customs has submitted almost half of the 1116 cases of customs rules violations worth UAH 1 billion to the court.

Starting from July 1, we expect news and feedback from the business community on the implementation of new legislative changes. We hope that the new liability measures will not lead to abuse of the fiscal functions of the customs. The EBA will impartially and openly inform about the implementation of new approaches at the customs and closely monitor any cases of increased pressure on business.