The requirements on cigarette labeling as proposed in draft law No. 2820 could result in the stoppage of cigarette production for between six to 12 months as it will be impossible to fulfill the new requirements within this timeframe, the Ukrtiutiun tobacco association has said.
"According to the preliminary assessments, the implementation of the bill would result in a 15% fall in the legal tobacco market and growth of illegal turnover, the temporary halt of tobacco product output for the period from six to 12 months due to the impossibility of fulfilling its requirements," Ukrtiutiun Director General Valentyna Khomenko told Interfax-Ukraine while commenting on the draft law.
She said that radical changes have been proposed to the regulation of tobacco production and will affect turnover within less than the 12 month period. In 2016 alone, the budget could lose taxes worth some UAH 15 billion.
Corporate Director of JTI Ukraine Oleksandr Kohut said that the authors of the draft registered it for the second time. The first draft had another name and was to be discussed by the parliamentary committee for tax and customs policy. Not waiting for the conclusions of the committee, the authors of the document withdrew it and registered it repeatedly under another name with the purpose of sending it to the parliamentary healthcare committee.
"The authors of the document proposed that Ukrainian law is brought in line with new EU Directive 2014/40 concerning the manufacture, presentation and sale of tobacco and related products, which EU countries will start to observe only from May 2016," the expert said.
He said that the Ukraine-EU Association Agreement does not contain these liabilities: Ukrainian law is supposed to be in line with the requirements of Directive EU 2001/37.
Kohut said that the document does not foresee a realistic transition period to change the characteristics of tobacco products and their packages.
