Purchases under threat: Ukraine Customs Service blocks parcels from abroad

Author : Nina Hlushchenko

Source : 112 Ukraine

May 27, a scandal around delays of parcels with Xiaomi and Meizu equipment erupted within Ukrainian segment of social media
16:39, 6 June 2017

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May 27, a scandal around delays at the customs of parcels with Xiaomi and Meizu equipment erupted within Ukrainian segment of social media. The story began with an article on (following the information in the network and complaints to the Ukrainian Mi Community about the problems with delivering parcels ordered by individuals), publication of Vladyslav Chechetkin about a similar situation with Meizu brand, as well as earlier publication of Association of Information Technologies of Ukraine about how Russia operates in a similar case. Meest Express service has also informed the buyers about the blocking of parcels to the customs. At the same time, "Ukrposhta" has been sending parcels with Meizu and Xiaomi in the regular mode.

May 25, it became known that the State Fiscal Service has been carefully examining the parcels sent via "Nova Poshta" since May 18, which took place until May 29 (by the way, "Nova Poshta" does not bind incident with delays in sending parcels).

Related: Farewell, China: Ukraine does not let parcels with Xiaomi gadgets

The news from the OpenBot blog about how many registered representatives of trademark owners are in the register of the State Fiscal Serviceб added fuel to the fire. All the major socio-political media reprinted it with varying degrees of distortion of facts. As we wrote earlier, according to the Ukrainian legislation (Customs Code, Article 398), the customs has the right to detain parcels only upon request from the right holder.

The customs register (СR) of objects of intellectual property exists in Ukraine for more than 10 years. "At first, only large manufacturers used it as opportunities, since the inclusion of an intellectual property object (trademark, invention, utility model, industrial design or copyright object) in the СP provided 5 and later 1 thousand euro deposit. With the beginning of the processes of harmonization of Ukrainian legislation with the EU legislation, the pledge was canceled, which sharply increased the number of objects introduced and, in addition, led to an increase in activity of the so-called patent trolls," says Danil Benatov, partner of the Patent Office and TM Benatov & Partners.

Danil Benatov specifies that the owner of a trademark has the ability to specify the minimum lot size of the imported goods marked with the indicated sign, which can be omitted, based on the parameters price or the number of units.

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Now we can assume that in case of strict compliance with the requirements of the current national legislation, Ukrainian consumers should not face any problems with orders from abroad, that is in the non-commodity quantity and for personal use, although the above cases say to the contrary.

But in our country, and this is a steady global trend, the volume of transnational trade is growing. Ukrainians willingly buy goods for their personal needs in foreign stores, because it is cheaper. This fact is important for our consumer with low solvency, and the difference in service is not felt.

The growing volume of such purchases abroad can lead to the fact that official distributors would begin to "tighten the nuts" in our country, motivating their decision by increasing tax revenues to the budget and combating smuggling.

"If such cases are involved, it is to be expected that in order to omit such "prohibitions," some suppliers would include "convenient" and eagerly anticipated corruption schemes, leading a significant part of the business "into the shadows," and will also start buying products from speculators that would bring it through some other alternative channels. A disturbing fact is that the salary of $ 200 is considered higher than the average in our country. Why do they block oxygen and restrict the right to choose? We understand that in this situation, we, as a commercial structure, should be "on the other side of the barricades" and worry that our potential buyers will order more from Aliexpress and buy less from our networks, but I would like everyone to be able to make shopping wherever he wants," says Olexander Shirkov, director of NIS, the partner of most of companies of the Xiaomi ecosystem in Ukraine.

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Taxes and payments to the budget are a popular argument of any dispute in Ukraine, and often they become a source for speculation. The current situation is another round of the conflict around the topic of trademark’s exhaustion of rights and the existence of the very concept of legal and illegal suppliers. On one side, there are supporters of the national principle of exhaustion of TM rights, that is, those who defend the idea that the right holder decides who can deliver his goods to a certain country and block the others. They insist that official distributors pay taxes to the budget, and thereby contribute to the rise of the Ukrainian economy. On the other side, there are supporters of the international principle, which implies that the producer has no right to interfere in the case of where his goods go.

These market participants declare that Ukraine's support of the national principle of exhaustion of TM rights would lead to some reverse consequences - the monopoly on sales, the rise in prices for goods caused by the monopolistic position of distributors, and the development of smuggling schemes. At the same time, it would not force those who did not pay taxes and worked illegally, start paying them.

According to the supporters of the free market, Ukraine needs to implement European approach, where the international system of exhaustion of rights to the trademark operates, and the distributors themselves determine which goods they would like to import. At the same time, buyers are free to decide where and how to buy their goods, and thanks to the free market, service develops and prices go down to reasonable sizes, and taxes come from everyone who works legally.

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The "official" supplier is not a legislative or fiscal concept, but an exclusively business one. One private person delegated certain rights to another private person. From the point of view of state customs, two firms importing the same goods must be absolutely equal. Customs and the tax service should not participate in any way in the process of competition between these subjects of the market. Customs should not intrude to whom the producer has given or withdrawn the status. It should professionally and impartially take the tax, not letting the goods to the country without taxation," explains Serhiy Arabadzhi, the founder of

According to Vladislav Chechetkin, after the adoption of the national principle in Russia in 2002, prices rose by 32%.

In the opinion of the supporters of the international principle, resorting to a ban on the basis of TM would not reduce illegal imports, but would stimulate corruption at customs, and this is a wrong tool to deal with it. Fighting with this means implementing a reform of customs and more stringent regulation of online trading. "Cross-border trade and other modern Internet technologies of trade and marketing radically change the behavior of the consumer. And this is like the wind, the movement against it will only deplete the resources. The appeal to trademarks does not reduce it. If we recognize this, our communication will become much more constructive," Arabadzhi suggests.

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Currently, there are two bills in the parliament that are aimed at settling the principle of exhaustion of TM in Ukraine. Bill 5419 supports the national principle. Bill 5699 supports reverse norms - the international principle. Further development of the situation with customs and overseas purchases largely depends on which of them are supported.

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