In 2020-2021, hundreds of Ukrainian companies imported personal protective equipment on a preferential basis, i.e. without import duty and VAT. The reason was CMU Resolution No. 224 of 20.03.2020, which allowed preferential treatment for goods from the approved List aimed at combating COVID-19.
Now, three to four years after import, customs authorities are conducting audits of these transactions. And the results are predictable: massive additional charges. The logic of the customs is simple: if the gloves were later sold as household goods, it means that the benefit was applied illegally. Below is an analysis of a case in which we proved that this logic is wrong, and which has direct implications for any importer who has used COVID benefits.
Legal construction of the privilege: where customs is wrong
Resolution No. 224 defines the list of goods to combat COVID-19 based on two criteria: the name of the product and the UKTZED code. For nitrile and latex gloves, this is code 4015. The Resolution does not contain any additional conditions for labeling, packaging or further use of the goods after importation. There is no requirement that the gloves be sold in pharmacies or labeled as medical.
This is a fundamental point that customs systematically ignores. The customs authorities are actually adding a requirement to Resolution #224 that is not in it: that the goods be used exclusively “to combat COVID-19” after importation. But the law does not set such a requirement. The exemption is determined at the time of border crossing, based on objective criteria – the UKTZED code and the List.
Notification of the State Labor Service: a key document that is often underestimated
The second legal instrument on which this privilege is based is the notification of the SLS. According to paragraphs 1-1 of CMU Resolution No. 761, personal protective equipment may be put into circulation on the basis of a notification from the SLS without meeting the requirements of technical regulations. This is a special mechanism created specifically for the pandemic.
In our case, the company received notifications from the State Labor Service for each customs declaration. These notifications had not been canceled at the time of the audit, which was confirmed by an official letter from the State Labor Service. Customs knew this fact, but simply ignored it in the inspection report.
Please note: if you used the COVID benefit and have notifications from the State Labor Service, check their status. As long as they are valid, this is your strongest argument.
The mistake of the court of first instance: a lesson for those who stop at the first refusal
The court of first instance dismissed the claim. The reason is illustrative: the judge applied the Technical Regulation on Medical Devices instead of the Technical Regulation on Personal Protective Equipment. This is a fundamental mistake – gloves imported as PPE under Resolution No. 761 are regulated by the PPE TR, not the Medical Devices TR. Different regulations, different requirements, different legal consequences.
In addition, the court completely ignored the conclusions of laboratory tests confirming the effectiveness of gloves against SARS-CoV-2 and a letter from the Ministry of Health recognizing the possibility of using “household” gloves to prevent COVID-19.
The Court of Appeal corrected all this and satisfied the claim in full. But this example is important for practice: losing in the first instance is not a reason to give up. Especially in complex cases where the court of first instance may not understand the specifics of the regulation.
What does this mean for your business?
If you used COVID benefits in 2020-2022, be prepared for an audit. Customs is systematically reviewing these transactions. Here’s what you should do now:
- Check the status of notifications from the State Labor Service. If they are valid, save the confirmation.
- Collect laboratory reports or certificates confirming that the product meets the characteristics of PPE.
- Check whether your product is included in the List of Resolution No. 224 by the UKTZED code.
- If you receive an audit report with additional charges, do not automatically agree. Practice shows that these cases are won in court, even if the first instance refuses.
Do you have a similar situation? Send us your documents and we will analyze your prospects for free.
Phone: +38 093 722 56 33
Email: fo@fedoryshyn.com
