Law on SEZ “Crimea”: some made by non-residents and others enriched

Law on SEZ "Crimea"It has been six months since the Law on Creation of a Free Economic Zone “Crimea” and on the peculiarities of economic activity in the temporarily occupied territory of Ukraine has been in force in Ukraine. Everyone involved in the Crimea: ordinary Crimeans, IDPs, representatives of small, medium and large businesses have experienced the pros and cons of this legislation. He made some non-residents and enriched others.

“The adoption of the law was necessary,” says tax expert Inna Onishchenko. – After all, in some way the authorities needed to determine the status of the occupied territory in the context of economic relations, property rights, turnover… But, in practice, it appeared that some parts of this document did not interact. In particular, the first section deals with the existence and legal status of a free economic zone, which provides for the creation of economic conditions for the prosperity of the territory, and the second part deals with the creation of conditions when relations with the occupied territory are limited as much as possible . 

According to the expert, the controlling bodies that are supposed to organize the work of this Law have been put in a situation of constant questions today. Because it is not clear how to use the first and second parts of the law that are in conflict with each other. Moreover, according to the expert, some provisions of this law also contradict the framework Law of Ukraine “On General Principles of Creation and Functioning of Special (Free) Economic Zones” and the Law of Ukraine “On Ensuring the Rights and Freedoms of Citizens and Legal Regime in the Occupied Territory of Ukraine”, and also to the Tax Code of Ukraine. “It (the law) creates a scheme of tax exemptions for Ukrainian suppliers regarding the application of a zero VAT rate and non-payment of excise duty on goods (exports) to the territory of Crimea, which will additionally result in the loss of non-payment of these taxes in the territory of Ukraine by more than UAH 2 billion in year ”, – states Inna Onishchenko. The expert is convinced that at present the Law on FEZ “Crimea” demonstrates the intention of Ukraine not to block the economy of the peninsula, but on the contrary, creates a legal field for economic interaction with the peninsula, despite political conflict and occupation.

It turns out that for some, the occupied peninsula has become essentially an offshore area where there is no control, taxation, and no controlled business processes. But others – mere mortals – did not receive such preferences from the authorities. For them, the free economic zone turned into a violation of the Constitution of Ukraine and international norms in the field of human rights. “Instead of working out economic control mechanisms in an occupation situation, the Law has undertaken to regulate the rights of ordinary Crimeans and IDPs,” states Olga Skrypnyk, a human rights activist and head of the Almenda Civic Education Center. – What are the difficulties, because all the necessary changes regarding rights and freedoms can be introduced into the Law of Ukraine “On Ensuring the Rights and Freedoms of Citizens and Legal Regime in the Occupied Territory of Ukraine”.

When the authorities cannot…

Even before the Law came into force, public organizations and experts asked the President of Ukraine to veto – the request was denied. During the six months of the law, despite all its shortcomings, there was no interest in finalizing the document, either from the representatives of the executive power or from the people’s deputies. Therefore, NGOs decided to set up a working group. “Each organization, depending on the direction of its activity, is working on its part of the bill. In particular, the Maidan Foundation for Foreign Affairs deals with the economic bloc, and human rights activists will work to ensure that the rights of Crimeans are protected, ”said human rights activist Olga Skrypnyk.

According to tax expert Inna Onishchenko, in a new version of the law they are currently working on, it was decided not to use such methodological concepts as free economic zone and resident / non-resident. That is, the law will be solely related to the peculiarities of state regulation of economic activity in the occupied territory, based on the economic security of the state. In turn, issues related to individuals were transferred to the law “On Ensuring the Rights and Freedoms of Citizens and Legal Regime in the Occupied Territory of Ukraine”. Because it is his job to protect the rights and freedoms of people.

As the member of the working group Olga Skrypnyk reported, her organization has already sent its proposals, under these two laws, to the People’s Deputy, a member of the Crimean inter-factional deputy association, Georgy Logvinsky. “After all, he is the only one who has stated publicly that he is engaged in the development of amendments to the law on the FEZ” Crimea. I have no confidence that the proposals will be taken into account, because we do not agree on all points. Because he has a more governmental position and he defends certain political and economic interests. We are also currently looking for opportunities to work with other MPs, ”the human rights activist said.

She also noted that today there is a rather bad tendency in terms of work in the Crimea. There is a lack of relevant experts who would understand Crimean issues with the right of legislative initiative, first of all – deputies. Of the 450 Crimean MPs, only two or three are interested in cooperation, this is not enough to assert at the legislative level the rights of those who left the peninsula and those who remained there. “The problem is also that the deputies are, in principle, a closed caste that works with a narrow circle of trusted people, lack of openness and normal interaction with the public,” – said the head of “Almenda”.

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