Ukrainian businesses may be required to include ban on re-exports to Russia in contracts

Ukraine is considering new requirements for foreign trade contracts involving goods at high risk of re-export to Russia, Belarus, Iran and North Korea. Under the proposed legislation, the Cabinet of Ministers would approve a list of products that could potentially be used to support the military, defense-industrial or economic capabilities of these countries.

When selling, supplying or exporting goods included in the list, Ukrainian companies would be required to include an explicit ban on their re-export or use in the designated countries in foreign trade contracts. Contracts would also have to specify penalties for violations, including fines, compensation for damages, suspension of performance or termination of the agreement.

Compliance with the new requirements would also be checked during customs clearance. For high-priority goods, declarants would have to confirm that the relevant restriction is included in the contract by entering a special code in the customs declaration.

If a foreign counterparty violates the ban on re-exporting or using goods in Russia, Belarus, Iran or North Korea, the Ukrainian company would be required to report the violation to the authority responsible for Ukraine’s state security. The notification would have to be submitted within five working days after the company becomes aware of the violation.

The bill also provides for the possibility of banning imports into Ukraine of certain goods manufactured using materials or raw materials originating from an aggressor or occupying state. This means restrictions could apply not only to products manufactured directly in such countries, but also to goods produced in third countries using the relevant raw materials.

Tags: ban, re-exports, businesses