Kyiv Post Legal Quarterly - - News - By Iryna Savchuk, Stella Sh­abliovska, Kyiv Post

“The vol­ume of smug­gling is so huge… (that) we are be­ing forced to leave the market,” the com­pany owner said.

Ac­cord­ing to him, it’s al­most im­pos­si­ble to re­sell of­fi­cially im­ported Ap­ple gad­gets. “We sell le­gal elec­tron­ics, pay all the taxes, and are be­ing crit­i­cized by cus­tomers for our prices, be­cause peo­ple have got used to the prices of smug­gled prod­ucts.”

Fis­cal Ser­vice Head Ro­man Nasirov didn’t re­spond to re­quests for com­ment, but in the an­swer to ques­tions from the Kyiv Post the Fis­cal Ser­vice de­nied there were any cus­toms bribery schemes, and said that there were plenty of other semi-le­gal ways to bring non-autho­rized elec­tron­ics into the coun­try.

For in­stance, cit­i­zens can bring in goods worth less than €1,000 and less than 50 kilo­grams in weight, although, the law says these goods mustn’t be for com­mer­cial pur­poses. Ac­cord­ing to the Fis­cal Ser­vice, this loop­hole is used widely. And in another shady ma­neu­ver, elec­tron­ics are hid­den among goods that have lower cus­toms tar­iffs, like food.

Ac­cord­ing to the Fis­cal Ser­vice, more scan­ning de­vices are needed on the bor­der to stop such smug­gled con­sign­ments of elec­tron­ics. A dif­fer­ent per­spec­tive How­ever, some think that the prob­lem lies not with the cur­rent laws or cor­rup­tion, or the lack of mod­ern scan­ners on the bor­der, but in the mo­nop­o­liza­tion of this business by just two com­pa­nies.

Volodymyr Kolodiuk, the pres­i­dent of the Uni­trade Group Hold­ing, and the brother of the fa­mous Ukrainian ven­ture cap­i­tal­ist Andrey Kolodiuk, said that to­day plenty of com­pa­nies are ready to im­port elec­tron­ics of the same qual­ity to Ukraine, but charg­ing much less than the of­fi­cial dis­trib­u­tors do.

“As a re­sult, the de­vices cost sig­nif­i­cantly more than on the U.S. and Euro­pean mar­kets. The of­fi­cial dis­trib­u­tors earn ex­cess prof­its due to such a monopoly,” Kolodiuk, whose shop City.com has ad­mit­ted sell­ing “gray” gad­gets, told the Kyiv Post. “In the civ­i­lized world this is called par­al­lel im­port­ing (when one buys goods in one coun­try cheaply, and sells them more ex­pen­sively in another coun­try).”

“It’s not business that suffers from this sit­u­a­tion,” he went on. “It’s or­di­nary peo­ple, who have to pay too much for de­sir­able goods.”

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