CC BY
6711. Shchegolevsky V. Prehistory of classical political economy in the works of thinkers of the Enlightenment era // Bulletin of the Institute of Economics of the Russian Academy of Sciences. 2012. № 1. pp. 117123.
12. Shpinev Iu. S. On the issue of defining the concept of investment in law science // Modern Science. 2020. № 6-1. P. 245-251. DOI 10.18411/13111972-2020-00008
13. Shpinev Iu. S. Social entrepreneurship in Russia // The scientific heritage. 2021. № 60. P. 71 - 75.
14. Sismondi J.-S. New beginnings of political economy, or About wealth in its relation to the population. T. I. M.: State Social-economy. ed. 1936. 386 p.
15. Smith A. Research on the nature and causes of the wealth of peoples / Exclusive classics. M. Publishing house AST. 2020. 1072 p.
16. Turgot A. R. Zh. Reflections on the creation and distribution of wealth / Turgot A. R. Zh., Dupont de Nemours P. S. Physiocrats. Selected economic works. M. Eksmo. 2008. 1102 c.
17. Vdovin I. A. The mechanism of legal regulation of investment activity: Historical and theoretical-legal analysis: dis. ... d-RA yurid. nauk. SPb. 2002. 388p.
18. Zankovsky S. S. Entrepreneurial (economic law) in the XXI century: continuity and development. In the collection: State and Law at the turn of the Century. 2001. pp. 223-229.
19. Zhdanova L. L. Debatable issues of the theory of reproduction and capital accumulation. 2019. Vol. 16. № 1. PP. 154-168. DOI 10.31063/20736517/2019.16-1.14.
LEGAL REGULATION OF FOREIGN ECONOMIC ACTIVITY OF UKRAINE: CURRENT STATE
AND PROSPECTS FOR IMPROVEMENT
Hrechyn Ye.
Doctor of Law, senior lecturer National Academy of the Security Service of Ukraine,
Kyiv, Ukraine
Abstract
In the paper, the normative and legal acts in the sphere of foreign economic activity of Ukraine are analyzed. The main shortcomings in the legal regulation of foreign economic activity of Ukraine are defined. Possible directions of improving the legal mechanism for regulating the above-mentioned sphere are suggested. Keywords: state security, foreign economic activity, legislation, export, import.
Nowadays the legal regulation of foreign economic activity of Ukraine is a system of legislative, executive and control measures carried out by authorized state institutions to maintain foreign economic balance, stimulate progressive changes in the exports and imports structure, encourage foreign capital inflows, protect national interests, etc.
In the legal literature, foreign economic activity is considered as an activity aimed at developing cooperation with other countries in the sphere of trade, economy, technology, culture, tourism. According to various scholars, it is a special form of social and industrial relations between individual states, states and international organizations, international organizations in the field of international economic cooperation, which is the subject of international economic law as an independent branch of public international law [1, p. 461].
Moreover, it should be noted that the above-mentioned activity, being studied by the international economic law, is also administered by a number of state laws and regulations. Let us now consider them in more detail.
State regulation of foreign economic activity of Ukraine is carried out by the Verkhovna Rada of Ukraine, the Cabinet of Ministers of Ukraine, the National Bank of Ukraine, The Ministry of Economic Development, Trade and Agriculture of Ukraine and the State Customs Service of Ukraine in accordance with their competence defined in Article 380 of the Com-
mercial Code of Ukraine, as well as by local governments, whose competence in the sphere of foreign economic activity is defined in Article 10 of the Law of Ukraine of 21.05.2007 "On Local Self-Government".
The state regulates foreign economic activity of Ukraine by means of:
- currency control (Law of Ukraine of 21.06.2018 "On currency and foreign exchange transactions", where the legal basis for foreign exchange transactions, currency regulation and currency supervision, the rights and obligations of foreign exchange transactions and authorized institutions are defined and their liability for currency legislation violation is established);
- customs control (carried out in accordance with the Law of Ukraine of 16.04.1991 "On Foreign Economic Activity" and the Customs Code of Ukraine of 13.03.2012 and is performed through licensing and quotas).
The regulatory and legal regulation of foreign economic activity of Ukraine, in its turn, is carried out by a number of general economic legislation acts and special legislation on foreign economic activity. Therefore, the legislation acts dealing with foreign economic activity can be divided into general (include regulations containing general provisions on foreign economic activity) and special (include legislation or norms determining the specific character of foreign economic activity in certain sectors of the economy, territories, with the participation of individual entities, etc.
First of all, let us refer to a general economic legislation. Taking into account the legal force of regulations, the system of foreign economic activity legislation can be represented as follows.
Acts of higher legal force:
Constitution of Ukraine (in particular, provisions on determining the principles of foreign economic activity exclusively by laws - paragraph 9, Article 92; on assigning the Cabinet of Ministers of Ukraine such powers as organizing and ensuring the implementation of foreign economic activity of Ukraine, customs, etc. - paragraph 8, Article 116), as well as the Commercial Code of Ukraine and the Law of Ukraine "On Foreign Economic Activity".
It is worth reminding that one of the first legal acts of independent Ukraine aimed at ensuring the market orientation of the domestic economy (and, accordingly, the development of economic competition, saturation of the domestic market with various goods, including those of foreign origin, to meet consumer needs and stimulate domestic producers to the modernization, production of new goods, etc.), was the Law of Ukraine "On Foreign Economic Activity".
The enactment of the above-mentioned normative act allowed all business entities with the appropriate amount of legal personality (including the absence of prohibitions or restrictions on such activities / certain types of them) to carry out foreign economic activity, which in terms of centrally planned economy used to be the prerogative of state and state-owned organizations [1, p. 632-633].
According to Article 1 of the mentioned law, the foreign economic activity is defined as the activities of domestic and foreign economic entities, built on the relationship between them, which take place both in Ukraine and abroad [2].
In the Commercial Code of Ukraine, a slightly different definition of this concept is suggested. Thus, according to Part 1 of Article 377, foreign economic activity is an economic activity, requiring the cross of the customs border of Ukraine by goods and / or labor force (as specified in Part 1 of Article 139 of this Code) [3].
However, both of these definitions do not reflect all the features characteristic of the foreign trade, which can be identified by analyzing the relevant provisions of the Civil Code (including Articles 377-389) and the Law of Ukraine "On Foreign Economic Activity".
Thus, the characteristic features of foreign economic activity are:
- production and sale of goods, performance of works, provision of commercial services (Article 3 of the Commercial Code of Ukraine);
- crossing the customs border of Ukraine by labor force and / or goods;
- special parties (Article 378 of the Commercial Code of Ukraine);
- special economic activity regime.
We support O.V. Mykhailov, who, studying foreign economic activity legal regime, emphasizes the need to distinguish between the concepts of foreign economic activity and foreign economic operation (Article 379 of the Civil Code, Articles 15-16 of the Law of Ukraine "On Foreign Economic Activity").
Thus, according to the scholar, the content of any activity (including foreign economic one) consists in systematic actions of a certain direction, not limited in time or those that are carried out over a long period of time (for example, during the license validity issued for 5 years). The meaning of the term "operation" (in the economic and legal sense) is much narrower. It may be considered as individual actions or their combination aimed at achieving a certain result (for example, the transfer of funds to a foreign contractor in accordance with the terms of the foreign trade agreement and the construction of the facility, which provides for payment by the customer in advance). A characteristic feature of a foreign economic transaction is crossing of the customs border of Ukraine by labor force and / or goods used in the foreign economic activity [4].
In the Article 379 of the Commercial Code of Ukraine, it is stipulated that all the subjects of foreign economic activity may carry out any types of this activity and foreign economic operations, unless otherwise provided by law. A complete list of foreign economic activity types authorized in Ukraine is contained in Article 4 of the Law "On Foreign Economic Activity". Among them: export and import of goods, capitals and labor; provision of services to foreign business entities by the subjects of foreign economic activity of Ukraine; scientific, scientific and technical, scientific and production, production, training and other cooperation with foreign economic entities; commercial education and training; international financial transactions and securities transactions in cases provided by the laws of Ukraine; credit and settlement operations between foreign and domestic economic activity subjects; joint venturing between domestic and foreign economic activity subjects, which includes creation of different types and forms of joint ventures, conducting joint business operations and joint property ownership both on the territory of Ukraine and abroad, etc.
As to the agency operations, when the legal ownership does not pass to the intermediary (on the basis of commissions, agency agreements, power of attorney, etc.), in the Article 4 of the Law of Ukraine "On Foreign Economic Activity" a special provision is contained: such operations are carried out by of foreign economic activity subjects without any restrictions.
One of the main types of foreign economic activity is the export and import of goods, capital and labor. The Article 1 of the Law of Ukraine "On Foreign Economic Activity" defines these concepts, distinguishing between exports / imports of goods and exports / imports of capital:
- export (export of goods) - sale of goods by Ukrainian subjects of foreign economic activity to foreign economic entities (including non-monetary payment) with or without export of these goods across the customs border of Ukraine, including re-export of goods. In this case, the concept of "re-export" (re-export of goods) means their sale to foreign economic entities and export of goods that were previously imported on the territory of Ukraine;
- import (import of goods) - purchase (including non-monetary payment) by Ukrainian subjects of foreign economic activity from foreign economic entities
of goods with or without import of these goods into the territory of Ukraine, including the purchase of goods intended for own consumption by Ukrainian institutions and organizations located abroad;
- export / import of capital - export from outside Ukraine / import from outside Ukraine of capital in any form (currency, products, services, works, intellectual property rights and other non-property rights) in order to obtain income from production and other types of business activity.
It is also worth mentioning that except a variety of opportunities for export-import as a kind of foreign economic activity and export-import operations as a component of foreign economic activity enshrined in current legislation, there is also a number of restrictions aimed at protecting national interests. According to Article 17 of the Law of Ukraine "On Foreign Economic Activity", a ban is imposed on the following types of exports and imports:
- export from the territory of Ukraine of objects that constitute the national, historical or cultural heritage of the Ukrainian people, determined in accordance with the laws of Ukraine;
- the import or transit of any goods which are known in advance to be harmful to health, endanger the life of the population and wildlife, or to destroy the environment;
- import of products and services that contain propaganda of war, racism and racial discrimination, genocide, etc., contradicting the relevant provisions of the Constitution of Ukraine;
- export and import of goods that are carried out in violation of intellectual property rights;
- export of goods from the territory of Ukraine within the framework of the implementation of the decisions of the United Nations Security Council dealing with the application of restrictions or embargoes on the supply of goods to the relevant state.
It should be noted that the exact list of goods, prohibited for export and import, is approved by the Verkhovna Rada of Ukraine on a submission from the Cabinet of Ministers of Ukraine.
Moreover, in order to ensure state security in the sphere of foreign economic activity, the laws of Ukraine also provide for restrictions / prohibitions on certain methods of goods import into Ukraine. This refers to the so-called dumping / dumped imports and subsidized imports.
Thus, according to the Article 1 of the Law of Ukraine "On Foreign Economic Activity", dumping / dumped imports is the importation of goods at a price lower than the comparable price of similar goods in the exporting country, which harms the domestic producer of such goods. Subsidized import is the importation into the customs territory of the country of import of goods that enjoy the benefits of a subsidy provided for the production, processing, transportation or export of such goods. Relations that arise in the process of these public activities are regulated by the Law of Ukraine of 22.12.1998 "On protection of national producers from dumped imports".
According to the Article 30 of the Law of Ukraine "On Foreign Economic Activity", the re-export of
goods imported at the expense of the State Monetary Fund of Ukraine and currency funds of district councils of people's deputies of Ukraine is prohibited. However, the body that manages the State Monetary Fund of Ukraine or the currency fund of the district council of people's deputies of Ukraine may allow re-export in case it is impossible to use imported goods on the territory of Ukraine for their intended purpose.
Laws defining the terms of international agreements in Ukraine (dated 29.06.2004 "On International Agreements of Ukraine") and a number of laws on ratification of international agreements with Ukraine - bilateral, multilateral (including those concluded between countries - members of international economic organizations: Law of Ukraine of 20.09.2001 "On Ratification of the Decision of the Council of Heads of Government of the Commonwealth of Independent States on the Rules for Determining the Country of Origin of Goods"), universal (Law of Ukraine of 16.03.2000 "On Ratification of the Convention on the Settlement of Investment Disputes between States and Nationals of other States"; Law of Ukraine of 10.01.2002 "On Ukraine's accession to the Convention abolishing the requirement of legalization of foreign official documents").
The Customs Code of Ukraine regulates relations connected with crossing the customs border of Ukraine and payment of customs duties.
The Law of Ukraine of 24.02.1994 "On International Commercial Arbitration" determines the legal status of this jurisdiction, which resolves disputes between Ukrainian and foreign business entities, subject to the relevant agreement between them.
Law of Ukraine of 02.12.1997 "On Chambers of Commerce and Industry in Ukraine" defines the legal status of these organizations, including their powers in the sphere of foreign economic activity. Among them: to carry out in the cases provided by law the declaration of foreign trade goods; to carry out at the request of Ukrainian and foreign entrepreneurs examination, quality control, quantity, completeness of goods (including export and import) and determine their value; to organize international exhibitions, national exhibitions of foreign states and separate foreign firms, to provide organization of exhibitions of the Ukrainian goods in Ukraine, abroad, etc.
Laws regulating contractual relations in the sphere of foreign economic activity: dated 23.12.1995 "On regulation of the export-import (barter) operations in the sphere of foreign economic activity"; dated 14.09.1999 "About production sharing agreements"; dated 03.10.2019 "On the concession"; dated 04.07.2002 "About ensuring the implementation of investment projects in Turkmenistan", as well as resolutions of the Verkhovna Rada of Ukraine, decrees of the President and acts of the Government of Ukraine.
As can be seen from the above, the legal regulation of foreign economic activity of Ukraine includes a number of legislative acts. Thus, today, the provisions of 554 field-specific normative legal acts of Ukraine correspond with the norms of the Law of Ukraine "On Foreign Economic Activity".
Therefore, we can come to the conclusion that the main shortcoming in the legal regulation of foreign economic activity of Ukraine consists in the unreasonably large number of interrelated normative and legal acts regulating it, the lack of clarity and systematicity. The result is the lack of proper regulation of the current legal framework.
In view of the above mentioned, we believe that numerous amendments and additions only complicate the monitoring mechanism of foreign economic activity, causing shortcomings and inconsistencies.
Another problem of the legislation in the sphere of foreign economic activity, in our opinion, is its excessive detailing. Thus, recently there has been a trend towards the adoption of field-specific laws for certain directions of foreign economic activity. In particular, these are the Laws of Ukraine "On export duty on live cattle and leather raw materials", "Export Duty Rates for Scrap of Ferrous and Non-Ferrous Metals", "On peculiarities of state regulation of business entities' activities related to production, export and import of disks for laser reading systems", "On state regulation of import of agricultural products", etc.
That is why, according to A. Omelchenko, the legislation dealing with general rules of conduct is transformed into one that is designed only for incidents, exceptional cases. Whereas, they do not contain new rules of conduct of a general nature - references to other laws are provided instead [5, p. 27].
In our opinion, the improvement of the legal mechanism for regulating foreign economic activity should be aimed primarily at consolidating the national economic sovereignty of Ukraine. The concept of economic sovereignty defines the leading role of the state as a subject of international economic relations, able to pursue an active and independent foreign economic policy and promote other foreign economic activity subjects to act for the benefit of the state via legal, political and economic measures, taking into consideration modern trends on the global economic stage.
Improvement of the mechanism of foreign economic activity legal regulation should take into account strategic directions of foreign economic activity development and priorities of foreign economic policy.
In the process of developing ways to improve the foreign economic activity legal regulation, in our opinion, special attention should be also paid to:
- bringing it into compliance with international law (primarily it refers to customs regulation, accounting and registration of certain types of foreign economic contracts, implementation of special types of control in the sphere of foreign economic activity, etc.);
- stimulation of interest from potential domestic and foreign subjects of foreign economic activity (regulation of foreign investment regime, creation of an adapted legal system for international trade in goods and services, environmental protection, improvement of rules and procedures for trade disputes regulation, etc.).
Finally, it should be emphasized that improving the legal support of foreign economic activity should promote the profitable use of global integration processes in order to stabilize and restore progressive trends in the economic system of Ukraine, increase the competitiveness of domestic producers, seamless and non-discriminatory entry into the world economy and guarantee protection of national interests on domestic and global markets, effective protection of vital national interests from real and potential threats in this sphere.
References
1. Nesynova S.V., Voronko S.V. et al. Commercial law of Ukraine: study guide. Kyiv: Tcentr uchbovoi literatury, 2012. 664 p.
2. Law of Ukraine of 16.04.1991 "On Foreign Economic Activity" № 959-XII. URL: https://za-kon.rada.gov.ua/laws/show/959-12.
3. Commercial Code of Ukraine of 16.01.2003 № 436-IV. URL: https://zakon.rada.gov.ua/laws/show/436-15#Text.
4. Mykhailov O.V. Code of private commercial laws: series of lectures. URL: http://rad-nuk.info/pidrychnuku/gospodar-pravo/456-mihailov.html.
5. Omelchenko A. Ways of improving and development of Ukrainian legislature in the sphere of foreign economic activity. Pravo Ukrainy. 2011. № 6. P. 23-29.
