Law of Ukraine

On Operations with Give-and-Take Raw Materials in Foreign Economic Relations

Date of Entry into Force:
October 31, 1995

The Law establishes the procedure of conducting operations with give-and-take raw materials in the area of foreign economic activity. The force of this Law extends to residents and non-residents of Ukraine.

Give-and-take raw materials are defined in the Law as raw and other materials, semi-finished products, components, energy carriers imported into the customs territory of Ukraine by the foreign customer (or purchased by the foreign customer for foreign currency within Ukraine), or exported out of Ukraine by the Ukrainian customer to be used in the process of production of finished products. Give-and-take raw materials can not be purchased by foreign customers on Ukraine's customs territory for Ukraine's national currency or obtained as a result of other transactions, including barter.  Ownership rights to give-and-take raw materials on each stage of processing thereof, as well as to products manufactured from them shall belong to the customer. 

In this case the customer shall be a subject of economic activity that supplies give-and-take raw materials, and the contractor shall be a subject of economic activity that conducts processing, dressing, concentration or use of give-and-take raw materials.

The Law establishes general requirements to the procedure of importing into the customs territory of Ukraine of give-and-take raw materials, and exporting of finished products produced of such materials.

In case of importing give-and-take raw materials into the customs territory of Ukraine payment of the import duty, and other taxes and fees charged in case of importing such products shall be conducted by means of issuing the ordinary bill to the state tax inspection. The term of validity of the ordinary bill shall not exceed 90 calendar days beginning from the moment of legalization of the import cargo customs declaration. The bill shall be canceled in case of exporting of finished products that were produced of give-and-take raw materials. In this case the import duty, and other taxes and fees shall not by subject to payment.

The Cabinet of Ministers of Ukraine is granted the right to determine alternative terms of repayment of ordinary bills with respect to certain types of operations with give-and-take raw materials.

Violation of terms of exporting of finished products that were produced of give-and-take raw materials out of the customs territory of Ukraine shall entail imposing a fine for each delayed day in the size of 0.3 per cent of the customs value of give-and-take raw materials.

In case of exporting of finished products - produced of give-and-take raw materials imported by foreign customers - outside the customs territory of Ukraine, such products shall not be subject to payment of the export duty, nor other taxes and fees, charged in case of product exporting. Also determined are finished products not subject to licensing and quoting.

In addition, the Law determines the procedure of sale within the customs territory of Ukraine of finished products that were produced of give-and-take raw materials, imported by the foreign customer. Finished products may be sold by the foreign customer within the customs territory of Ukraine through the permanent representative office. In this case it shall be necessary to draw up the import declaration for finished products and pay a full amount of the import duty, as well as other taxes and fees, envisaged by legislation for similar imported products. The ordinary bill issued by the foreign customer for the amount of the import duty, and other taxes and fees while importing give-and-take raw materials into the customs territory of Ukraine shall be repaid by submitting documents, acknowledging the payment of the export duty, and other taxes and fees, imposed on finished products being sold in Ukraine.

The Law determines the procedure of purchasing by the customer of give-and-take raw materials within the customs territory of Ukraine, and the procedure of sales or exporting of finished products produced of such materials. The term of operations with give-and-take raw materials within the territory of Ukraine shall constitute 90 calendar days. In case of exporting of finished products - produced of give-and-take raw materials purchased within the customs territory of Ukraine - outside the customs territory of Ukraine, no export duty and other taxes and fees - charged in case of exporting of products outside Ukraine - shall be imposed.

The Law also determines the procedure of exporting of give-and-take raw materials of the Ukrainian customer outside the customs territory of Ukraine, with the following return of finished products to Ukraine. Give-and-take raw materials exported by the Ukrainian customer shall not be subject to the export duty, and other taxes and fees. In this case the Ukrainian customer shall provide a customs body with a written commitment with respect to return of finished products, produced of give-and-take raw materials, to Ukraine. The term of return of finished products shall not exceed 90 days. The Cabinet of Ministers Ukraine is entitled to establish other terms of return of certain finished products.

The written commitment of the Ukrainian customer shall be redeemed in case of importing of finished products into Ukraine, or return of currency revenue from the sale of finished products. In case of failure to return finished products or currency revenue to Ukraine, the Ukrainian customer shall pay a profit tax and a fine for each delayed day in the size of 0.3 per cent of the cost of non-imported products, or the currency revenue.

In case of imposing the export duty, and other taxes and fees on give-and-take products, the Ukrainian customer is entitled to postpone the term of their payment by means of issuing the ordinary bill for the amount of taxes. The term of bill repayment cannot be less than 90 calendar days.

The Law determines the procedure of payments between the customer and the contractor for processing, dressing, concentration or use of give-and-take raw materials.

The State also provides guarantees of observing rights and lawful interests of customers and contractors, including the right to free disposal of give-and-take raw materials and products, produced of such materials.

Warning! The information is outdated due to the fact that this section is temporarily not updated!


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