Government announces new export rules for agricultural products
- Tue, 14 November 2023
Ukraine has introduced mandatory registration for agricultural export companies designed to prevent abuse of laws like tax avoidance in the export of food, the Agriculture Ministry reported on Nov. 1.
Companies will have to apply to be included on the list of verified exporters in order to export goods like grain and processed oils. To be included on the list of verified exporters, a business must sign up to the State Agrarian Register, as well as meet a number of criteria.
The company must be registered as a value-added tax payer, and have no tax debts or delays in the return of earnings on foreign currency. They must also have been registered as a value-added tax payer before the start of the full-scale invasion.
The business additionally has to provide banking documents that confirm that it exported at least one shipment successfully between the start of the full-scale invasion and Oct. 27, 2023.
The rules also serve to protect the rights of entrepreneurs, the Agriculture Ministry said. However, the change in rules is likely to cause additional delays for exporters, Bloomberg reported on Oct. 27. Those who use river and sea ports are already being held up for weeks at a time due to bottlenecks, bad weather, and continued Russian attacks.
Russia’s de facto blockade of Ukraine’s Black Sea ports and attacks on port facilities on the Danube River have depleted export volumes significantly. Government data shows that agriculture exports are down by nearly half year-on-year.
In September, only 3.64 million metric tons of agricultural products were transported out of Ukraine, down from 6.87 million metric tons in the same period last year, according to Agriculture Ministry data.
The most recent data shows that agricultural exports fell from 4.22 million metric tons in October 2022 to 2.15 million metric tons in October 2023. Ukraine has so far managed to export over one million metric tons of agricultural products and other cargo using a temporary corridor in the Black Sea.
Neighboring Romania and Poland now serve as important transit countries for Ukrainian grain, with nearly 60% of the total volume of Ukrainian grain exports currently transiting through Romania, according to Romanian President Klaus Iohannis. Over 27 million metric tons of Ukrainian grain transiting through Romania since the beginning of the full-scale invasion, Iohannis said.