Foreign Trade Restrictions: Risk Management Issue

Under Article 37 of Law No.959 "On Foreign Trade Activity" from April 16, 1991, Ukrainian authorities have extensive powers to impose so-called "special sanctions" on importers/exporters and their foreign counterparts for "violations of foreign trade and related laws".

Such sanctions interrupt the normal course of business and may lead to considerable financial losses. There are cases where sanctions have been applied in order to put pressure on companies that are in dispute with customs authorities. Below we provide comments on applicable rules and practices in respect of these sanctions.

There are two forms of special sanctions: the temporary suspension of foreign trade activity ("FTA") and the individual license regime of FTA.