Statement on Draft Law #1049

Statement on Draft Law #1049

The proposed trade margin in Draft Law #1049 is bizarre for market economies and is inconsistent with many of Ukraine's international obligations. We are concerned about the Draft Law, which deprives companies’ the right to determine their own prices and the compulsory distribution of revenues from the sale of tobacco products among market players.

The draft law sets a trade margin for wholesale and retail, obliging manufacturers to sell to distributors at a price not higher than 80% of the maximum retail price.

We welcome the initiative of the Government and the President of Ukraine aimed at finding a solution not to approve Draft Law #1049. We support the Memorandum signed on December 12, 2019, a positive step towards further development of fair and transparent competition in the industry, combating illegal trade and tax evasion, ensuring predictability and transparency.

The American Chamber of Commerce in Ukraine urge President Volodymyr Zelenskyy not to sign the Draft Law #1049 and return it to the Verkhovna Rada. Paragraph 2 of Section II of the Final and Transitional Provisions should be withdrawn. We urge government authorities not to allow the deterioration of Ukraine’s investment attractiveness and the economy as a whole.

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