The Government by the Degree of 5 October 2016 No.686
annulled Resolution No.724 of the Cabinet of Ministers of Ukraine
of 16 September 2015 On Application of Benchmark Indexes of Customs
Value of Goods in the Risk Management System. How will this Act
impact the work of business entities in the implementation of
control over the correctness of determining the customs value of
goods transported through the customs border of
In September 2015 business was taken aback by the adoption of
the Resolution of the Cabinet of Ministers of Ukraine On
Application of Benchmark Indexes of Customs Value of Goods in the
Risk Management System No. 724 dated 16 September 2015
(Resolution No. 724) because all companies were sure that sadly
remembered indicative prices have returned. The tax authorities
declared immediately that the benchmark indexes should not be
mandatory and should be used only for information purposes.
However, the business and the legal community receive it with
incredulity due to the following quite justified reasons.
First, Resolution No. 724 itself was very equivocal. It did not
stipulate precisely how it should correlate with the Customs
Code of Ukraine setting out methods for customs valuation.
Second, Resolution No. 724 made no remarks as to the procedure for
application of benchmark indexes in the risk management system.
Third, the benchmark indexes have not been publicly available and
it remains unclear for companies how they have been calculated and
how they have been analyzed in each particular transaction as there
are different supply terms and incurred expenses, etc. Fourth, in
practice, Resolution No. 724 has complicated customs clearance
procedures at least at the very beginning because many companies
have been required to provide additional documents for customs
valuation purposes and have spent more time for customs clearance.
Last, but not least, unfortunately, customs value has always been a
stumbling block for conducting business in Ukraine for the vast
majority of companies.
Notably, Resolution No. 724has also raised WTO compliance
issues. The fact is that under the WTO jurisprudence e.g. Colombia
— Indicative Prices and Restrictions on Ports of Entrythe
panel has precisely concluded that application of mandatory
indicative prices contradict the Customs Valuation
In view of the above, it goes without saying that Resolution No.
686 of Cabinet of Ministers of Ukraine of 5 October 2016, which has
abolished Resolution No. 724, is in the interests of the business
and fully complies with WTO rules.
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