On March 21, 2012 Arzinger Law Office carried out business breakfast on the topic “Customs Issues by Medication Import” within the framework of the project Arzinger Academy Legal Days.

At the workshop spoke lawyers at Arzinger: Senior Associate Natalia Martynyuk, Associates Anton Polikarpov and Nazar Polyvka.

The workshop was opened by Nazar Polyvka, Associate of the Healthcare and Pharmaceuticals Practice, with his report “Change of the Product Code for Medications by Import to Ukraine”. Early 2012 the State Customs Service of Ukraine transferred a part of medications containing ethanol as auxiliary substance as well as vitamin and vitamin and mineral preparations to the group of excise goods through assignment to them of product codes in product positions 2208 as alcoholic beverages and 2106 as food supplements. Due to this change of product codes at customs clearance of ethanol containing medications products of product position 2208 90 69 00 are subject to customs duty in amount of 3.5 euro/l of 100% spirit , and products in product position 2106 90 92 00 – to 8%. Besides, it is necessary to obtain a licence for import of alcoholic beverages.

The speaker also announced and commented from the legal point of view the main novelties of the Customs Code of Ukraine, including: simplified goods declaration procedure; reduction of time limits for customs clearance up to 4 hours as of submission of the customs declaration and documents; right to carry out customs clearance at any customs authority; shortening of the list of documents to be submitted along with a customs declaration; prohibition for customs authorities to include into customs declaration information different from such determined by this list; right of the declarant to correct, change, recall or invalidate a declaration; establishment of the contract price method as the main method to determine customs value, use of other methods is strictly regulated; establishment of clear grounds for refusal in customs clearance and obligation of the customs authority to provide exhaustive explanations.

Further, Anton Polikarpov, Associate of the IP Rights and Litigation Practice spoke about protection of intellectual property rights during import of goods. He focused in his report mainly on the Customs Register of Objects of the Intellectual Property Rights, advantages and specifics thereof as well as issues of the parallel import – conflict between principle of free movement of goods and legal protection of industrial property objects. In second, practical, part of his report Anton discussed with participants a number of cases on this subject.

Natalia Martynyuk, attorney-at-law, Senior Associate of the Litigation Practice, spoke about singe aspects of appeal against decisions of the customs authorities, disputes with customs authorities and about the current court practice on such disputes. Thus, the majority of disputes with customs authorities arise based on: refusal to accept customs declaration, to carry out customs clearance or to let goods or vehicles through customs border of Ukraine; issuance by customs authorities of tax notices about additional charges in taxes or customs duties for business entities; or decisions of customs authorities as to goods classification. Cases involving customs authorities are tried by administrative and local courts.

Moreover, Natalia gave illustrative examples from the court practice regarding appeal against decisions of customs authorities made in course of inspections as to classification of goods, as well as disputes arising due to customs clearance of goods belonging to companies with foreign investment.

At the end of the workshop Arzinger’s lawyers gave a number of recommendations for representatives of pharmaceutical companies regarding customs clearance by import of medications and protection of intellectual property rights thereat, and regarding protection of own interests in disputes with customs authorities taking into account legislative requirements. 

After reports of speakers participants of the business breakfast had an opportunity to ask experts their questions and to share their experience with colleagues.