State Tax Service continues to ignore the CCI's letter confirming force majeure

Are penalties and fines for violation of legislation in the field of foreign economic activity applied during the period of martial law in Ukraine?

The legal framework for currency transactions, currency regulation and currency supervision, rights and obligations of currency transactions entities and authorized institutions and liability for violation of currency legislation are set out in the Law of Ukraine No. 2473-VIII "On Currency and Currency Transactions" dated June 21, 2018 (Law No. 2473).

Pursuant to Article 13(1) of Law No. 2473, the NBU is authorized to set deadlines for settlements under export and import transactions.

The deadlines for settlements for export and import of goods are set out in clause 21 of Section II of the Regulation on Protection Measures and Determination of the Procedure for Certain Transactions in Foreign Currency, approved by Resolution of the NBU Board No. 5 dated January 2, 2019 (hereinafter - Regulation No. 5), and amount to 365 calendar days.

In connection with the introduction of martial law in Ukraine by the Decree of the President of Ukraine No. 64/2022 dated 24.02.2022, the NBU Board adopted Resolution No. 18 "On the Operation of the Banking System during the Period of Martial Law" dated 24.02.2022, as amended on 07.07.2022, which established the deadlines for settlements for export and import of goods as of April 5, 2022 - 180 calendar days. For transactions carried out prior to 05.04.2022, the settlement deadlines are 365 calendar days.

According to clause¹² of the NBU Board Resolution No. 67 dated May 14, 2019 "On Establishing Exceptions and (or) Specifics of Implementation of Deadlines for Settlements for Export and Import of Goods and Amendments to Certain Regulatory Acts", the deadlines for settlements for exports of goods classified under the codes according to UKTZED: 1001, 1002, 1003, 1004, 1005, 1201, 1205, 1206 00, 1507, 1512, 1514, 2306, are:

1) 90 calendar days and apply to transactions carried out from November 11, 2023 to July 11, 2024 inclusive;

2) 120 calendar days and shall apply to transactions carried out from July 12, 2024.

Violation of the deadline for payments by residents, in accordance with part five of Article 13 of Law No. 2473, entails the accrual of a penalty for each day of delay in the amount of 0.3 percent of the amount of unpaid funds under the contract (the value of the undelivered goods) in national currency or in foreign currency converted into national currency at the exchange rate of the National Bank of Ukraine established on the day the debt arose.

Pursuant to part six of Article 13 of Law No. 2473, if the performance of a contract for import of goods is suspended due to force majeure, the payment term established by the NBU and the accrual of penalties in accordance with part five of this Article shall be suspended for the entire period of force majeure and resume on the day following the day on which such circumstances expire.

Confirmation of the occurrence and termination of force majeure is a certificate of the authorized organization (body) of the country of location of the party to the foreign economic agreement (contract) or a third country in accordance with the terms of this agreement (contract).

In other words, one of the parties to the contract must prove that the circumstances (imposition of martial law or the outbreak of hostilities) are relevant to a specific economic obligation and make it impossible for residents to receive foreign currency earnings or supply imported goods for an indefinite period after the delivery of goods or advance payment, and in order to avoid penalties for violation of payment deadlines during the period of force majeure, it is necessary to certify this fact with a certificate of the authorized organization (body)

Clause 6 of the Regulations on Certification of Force Majeure (Force Majeure Circumstances) by the Chamber of Commerce and Industry of Ukraine and Regional CCIs, approved by the Decision of the Presidium of the CCI of Ukraine No. 44(5) dated December 18, 2014 (hereinafter - the CCI Regulations), stipulates that the grounds for certification of force majeure are the presence of one or more force majeure circumstances listed in Article 14, para. 1 of the Law of Ukraine "On Chambers of Commerce and Industry in Ukraine", as well as those determined by the parties to the agreement, legislative, departmental and/or other regulations that affected the obligation in such a way as to make it impossible to fulfill it within the time period stipulated by the relevant agreement, legislative and/or other regulations.

Pursuant to the CCI Regulations, force majeure (circumstances of insuperable force) is certified at the request of business entities for each individual contract, the performance of which has occurred in accordance with the terms of the contract and the performance of which became impossible due to the existence of the said circumstances, by issuing a certificate by the CCI of Ukraine or a regional chamber of commerce and industry in accordance with applicable law and the Regulations.

The UCCI maintains a unified Register of Certificates issued by the UCCI and regional Chambers of Commerce and Industry (the Register of Certificates) certifying force majeure (force majeure) and the Register of Authorized Persons.

At the same time, the CCI of Ukraine by letter No. 2024/02.0-7.1 dated 28.02.2022 certified force majeure circumstances (circumstances of insuperable force): military aggression of the Russian Federation against Ukraine, which became the basis for the introduction of martial law from February 24, 2022 for a period of 30 days, in accordance with the Decree of the President of Ukraine dated 24.02.2022 "On the introduction of martial law in Ukraine".

Subsequently, the term of martial law in Ukraine was extended by Decrees of the President of Ukraine: from March 26, 2022 for a period of 30 days; from April 25, 2022 - for 30 days, from May 25, 2022 - for 90 days, from August 23, 2022 - for 90 days, from November 21, 2022 - for 90 days, from February 19, 2023 - for 90 days, from May 20, 2023 - for 90 days, from August 18, 2023 - for 90 days, from November 16, 2023 - for 90 days, from February 14, 2024 - for 90 days, from May 14, 2024 - for 90 days.

In other words, the CCI of Ukraine notified "all those concerned" by letter that starting from February 24, 2022, the above circumstances are extraordinary, unavoidable and objective circumstances for Ukrainian business entities. However, the CCI Regulations do not define a letter as a document such as a certificate certifying the occurrence of force majeure (force majeure) issued by the CCI of Ukraine or a regional chamber of commerce and industry in accordance with applicable law, the terms of the agreement (contract, agreement, etc.) and these Regulations.

Thus, a letter from the CCI of Ukraine is not a certificate of force majeure (force majeure).

In view of the above, the requirements of Law No. 2473 and the CCI Regulations, as well as the outbreak of hostilities on the territory of Ukraine, for the possible release of taxpayers from liability for violation of the deadlines for settlements established by the NBU, the justification of the impossibility of fulfilling a foreign economic contract, shall be certified by the CCI of Ukraine with a certificate of force majeure indicating the period of validity of such circumstances.