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1 March 2012

The State Customs Service of Ukraine has almost blocked import of some medicines into Ukraine

Starting from February 2012 the State Customs Service of Ukraine has unexpectedly changed its approach to classification of some medicines imported into Ukraine. Particularly, the State Customs Service classifies some medicines containing ethanol as alcohol beverages under customs code 2208 90 69 00 of UCG FEA, while vitamins and vitamin-mineral products as food products under customs code 2106 90 92 00 of UCG FEA.

In case of such classification, while clearing the said medicines the importers/distributors may be required:

(i) to pay additional taxes and duties i.e. (a) import duty at rate 3.5 EUR per 1 liter of 100% alcohol and excise tax at the rate of 45,87 UAH per 1 liter of 100% alcohol are applied to the medicines classified as alcohol beverages; and (b) import duty at the rate of 8% is applied to medicines classified as foods;

(ii) to obtain additional approvals/permits i.e. the relevant license from the Ministry of Economic Development and Trade of Ukraine on the importation of alcoholic beverages that requires significant additional financial, administrative and time resources from importers/distributors.

The said unforeseen approach of the State Customs Service of Ukraine has already caused problems with customs clearance of the imported medicines and is regarded as quite questionable by market players. According to the industry experts (http://www.apteka.ua/article/128032) it is applied even to the medicines of the world-known pharmaceutical producers imported into Ukraine under the customs code 3004 of UCG FEA for a long time. Moreover, in terms of the Ukrainian legislation medicines, alcohol beverages and foods are separate products with different regulations and requirements to production, registration, licensing, storage, certification, different applicable tax regimes and controlled by the different state authorities.

It goes without saying that the current acts of the State Customs Service of Ukraine considerably affect importation of medicines into Ukraine. Thus, it may well be that the foreign medicines producers concerned may raise the issue of their incompliance with both bilateral and international obligations of Ukraine (incl. WTO).

For more information please, contact Tatyana Slipachuk or Nataliya Mykolska.

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