Economy 2022-05-15T07:36:07+03:00
Ukrainian news
Ukraine Holds First Seat Of Honor In 2016 As Source Of Counterfeit Cigarettes Supplies To Europe

Ukraine Holds First Seat Of Honor In 2016 As Source Of Counterfeit Cigarettes Supplies To Europe

Europe, cigarettes, Tobacco, counterfeit

The Ukrtiutiun association of tobacco products producers, with the reference to a study of counterfeit cigarette market in the European Union, the Kingdom of Norway and the Swiss Confederation conducted by the KPMG company, said that Ukraine held the "first seat of honor" as the leading country-source of counterfeit cigarettes to Europe in 2016.

Director General of the Ukrtiutiun association Valentyna Khomenko has said this in a statement, Ukrainian News Agency reports.

"Part of the counterfeit products are cigarettes mostly smuggled from the Republic of Belarus, the People's Republic of China and the United Arab Emirates through the territory of Ukraine as transit. And part of the products are cigarettes legally produced in Ukraine for domestic market but illegally smuggled abroad," Khomenko said.

At the same time, according to Khomenko, number of cigarettes seized in 2016 by overseeing authorities at the attempt of illegal smuggling abroad was numbered only in millions.

"Illegal traffic contracted from 8.5% in 2013 to 1.1% in 2016. The result was achieved thank to systematic cooperation of authorities and industry participants. In particular, a state registration of tobacco production equipment was imposed along with embargo on import of tobacco and non-tobacco materials (tissue paper, philters) by entities not possessing a manufacturing license," Khomenko said.

At the same time, Khomenko said, a study conducted by the TNS revealed that as of June 2017, volume of illegal cigarette market in Ukraine grew more than twofold to 2.6% year over year.

As Ukrainian News Agency earlier reported, the Finance Ministry of Ukraine initiated annual increase of an excise duty for tobacco product by 20%.

The bill was designed to meet the conditions of the Ukraine - EU Association Agreement.

The law provided for raising the excise duty on tobacco products by 8.1% consumer index in 2018 and additionally by 20%, and then annually by 20% until excise duty in an average retail price holds the share of 60%.

And when this happens, the excise will amount to at least EUR 90 per 1,000 cigarettes.

At the same time, in 2017, according to an explanatory note, the minimum tax obligation for cigarette industry of Ukraine was EUR 21 per 1,000 cigarettes.

Thus, the EU Decision must be fulfilled starting January 1, 2025.

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