Tax and accounting insights for Ukraine
05.12.24
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"Gray" electrical engineering and consumer protection

Representatives of the EBA Consumer Electronics Committee took part in the press event "Black Friday - an opportunity to save money or misleading? Violation of consumer rights in online and offline stores", during which the results of the monitoring of the Consumer Trust - Center of Expertise Test for the observance of consumer rights in the sale of technically complex household goods were presented.

The EBA Consumer Electronics Committee brings together companies that are involved in the production of household electrical appliances in accordance with international standards, pay all necessary taxes and customs duties to the state budget and comply with the requirements established by law in Ukraine, including those stipulated by the legislation on consumer protection, state market supervision, technical regulations for a particular type of equipment, etc. Therefore, solving the problem of illegal imports of household appliances and electronics is one of the key priorities of the Committee.

Viktoriia Kulykova, Head of the EBA Committees Department
"Unfortunately, the number of illegally imported equipment that does not meet the requirements of Ukrainian legislation is not decreasing, but continues to grow in certain categories. So, recently, at a presentation by an official representative of Apple in Ukraine, I heard disappointing statistics that the shadow market for Apple smartphones grew from 60% in 2021 to 71% in 2023. And that in 2023 alone, the budget of Ukraine lost UAH 5.5 billion on non-payment of VAT on these smartphones.

It is worth emphasizing that illegal or so-called "gray" equipment is imported and sold in Ukraine not only without paying the proper taxes to the state budget, but also with a number of other violations of the law. Such equipment usually does not comply with the requirements of technical regulations adopted in Ukraine, is not labeled in Ukrainian, and often does not receive fiscal receipts, which in turn are a guarantee of warranty repairs of such equipment in the future.

It is worth noting that the moratorium on inspections by the state market supervision and customs control authorities, which was introduced in Ukraine in connection with the martial law, also contributed to the growth of the number of "gray" vehicles. For example, the Committee has repeatedly drawn the attention of public authorities to the fact that certain unscrupulous entrepreneurs transport inefficient gas boilers in Ukraine that contradict the requirements of the technical regulations on the ecodesign of space heaters adopted in Ukraine, approved by Government Resolution No. 1184, which banned the import of inefficient boilers that consume a lot of energy resources into Ukraine from August 2022. At the same time, in response to our inquiries, representatives of both the customs authorities and market surveillance explained that they could not do anything because of the moratorium. It was only in 2024 that the moratorium was partially lifted so that market surveillance authorities could start checking violators.

As of January 1, 2025, the moratorium on inspections by the state market surveillance and control of non-food products will be lifted. On the one hand, this will allow representatives of customs and market surveillance authorities to inspect business compliance with legal requirements.

At the same time, businesses have significant concerns that the controlling authorities will focus on inspections of only bona fide entrepreneurs, holding them liable for minor, often unjustified violations, while the shadow segment of the household appliances and electronics market will remain untouched by such authorities. This is partly happening already, within the framework of the existing exceptions to the moratorium on inspections, when companies are trying to bring to justice, for example, for the fact that the Ukrainian conformity mark, the so-called shamrock, is applied not to the product but to its packaging. Moreover, the argumentation of the manufacturers of the goods that for one reason or another the factory did not have the technical capability to apply the shamrock directly to the goods is not always taken into account.

At the same time, according to the results of inspections conducted by the Consumer Trust - Center of Expertise Test, we see that many stores sell goods without labeling, fiscal receipts, etc.

Therefore, the key task for the inspection authorities in 2025 should be to ensure equal and fair approaches to inspections so that not only "white companies" are inspected, but, first of all, systemic violators who import and sell "gray" equipment. After all, everyone suffers from the problem of "gray" imports - law-abiding businesses operating in unequal competitive conditions, the state that does not pay significant taxes, and consumers who, in case of any problem with illegally imported goods, remain as unprotected as possible.

European Business Association
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