This site has limited support for your browser. We recommend switching to Edge, Chrome, Safari, or Firefox.

Why does Ukraine introduce licenses for the export of grain?

Защо Украйна въвежда лицензи при износа на зърно?

Ukrainian agricultural exporters have left about $3 billion of their earnings abroad since the start of the war, increasing pressure on the country's foreign reserves, according to Central Bank estimates consulted by Bloomberg.

"Merchants from various industries have taken 70% - 75% of their revenue outside of Ukraine since the start of the war," a government official said, citing Central Bank calculations.

This is also one of the reasons why the government tightened control over the supply of cereals and oil crops. The government will require exporters of such goods to either obtain licenses or provide VAT documents from before the invasion.

They will also have to prove that their earnings will remain in the country's banking system. The new regulations will come into effect in 10 days and will be valid until 2024.

Ukraine was one of the most important global manufacturers and exporters of food products, and its agricultural sector traditionally provided significant revenue for the state.

The government wants to eliminate shell companies, "remove" foreign currency profits and ensure better tax collection. These actions will be closely watched by Ukraine's allies, who have long raised the alarm about the country's corruption problem.

By law, Ukrainian exporters are required to declare revenue within 180 days, a requirement that helps Ukraine's Central Bank increase its foreign reserves to prop up the national currency during the war, but that never happens.

According to the governor of the Central Bank, Andrey Pishtny, the situation is much worse. He told Forbes that the exporters did not bring in foreign exchange earnings of eight billion dollars.

He did not specify the time period, but issued a sharp criticism, saying that while some remittances were delayed, other "unscrupulous entrepreneurs" did not return their earnings at all, which became "an extremely important problem for the state, especially in the conditions of war ".

Leave a comment

Please note, comments must be approved before they are published