Ukraine is losing hundreds of millions of dollars on the export of scrap metal because of corruption

Nov 6, 2019 Новини

Due to corruption schemes, the state annually loses hundreds of millions of dollars on the export of scrap metal, says doctor of technical Sciences, Professor, corresponding member of NAS of Ukraine, Minister of industry of Ukraine in 1995-1997 Valery Mazur. He wrote about this in an article for "a Mirror of week".
The government of Ukraine by its decree should be lifted immediately contrived quotas and other obstacles to the free export of scrap metal from Ukraine. Such a step will meet Ukraine signed the Treaty of accession to the WTO and the Association Agreement with the EU. Due to this in 2015 Ukraine will increase exports of ferrous scrap to 2.5 million tonnes and worth nearly $ 700 million. from the export of these products.
The author recalls that for decades, Ukraine was one of the largest producers and exporters of scrap metal. In the late 2000s in Ukraine annually harvested 8-11 million tonnes of ferrous scrap, and exports were 4.5–5.2 million tons of Scrap surplus and have enough for domestic industry and for export.
That is, Ukraine exported 46-54% of the collected scrap. Scrap collecting enterprise (collectors) have created thousands of jobs, regularly paid wages and taxes, were loading their orders ports, Railways and court of rechflota. The export of scrap metal annually provided entry to Ukraine about 1 billion dollars.
As stated in the article, a major financial flow of currency do not remain without attention "watchers" of the previous government. And criminal "shemschiki" in 2012-2013 implemented the scheme of reorientation of money flows from the budget to private pockets. First, blocked the export of scrap metal. Second, the order entered manual control of volume of export of scrap by issuing officials of the Ministry of economic development and trade of permits (quotas) on export of these products. The illegal system of restrictions on exports of scrap metal braided web of regulations in the form of orders and decrees of Cabinet of Ministers orders the Ministry of industrial policy first, and later the Ministry of economic development.
The economic danger to the state
This "order" allows you to withhold the granting of quotas to the real exporters of scrap and to issue permits for the export of hundreds of thousands of tons of this product intermediary firms. In most such firms have not prepared scrap, no contracts with the ports for cargo or chartered vessels. They just resell obtained the Ministry permission (quota) to the actual exporters. The fare comes to $ 10. the export quota of tonnes of scrap metal. With a minimum amount of exported scrap, for example, in 2013 approximately 255 thousand tons the amount of "dividends" from the resale of quotas could be roughly 1.5–2.0 million dollars. Even if we assume that the amount is overstated by half, still the scale of corruption is impressive.
The implementation of plans to restrict the export of ferrous scrap is automatically accompanied by a reduction of currency proceeds to Ukraine.
Ukrainian metallurgists support system restricting exports of scrap metal, since in case of blocking lomozagotoviteli forced to sell the scrap of ferrous metals at bargain prices, much lower than the world almost $ 100./so in Total due to lower purchase prices of ferrous scrap and grace metallurgists get... a profit of $ 300-350 million. a year.
Because of the artificial curb exports in recent years, the country is actually overstocked scrap. Its nowhere to sell. As a result of such industrial policy, the collection and preparation of scrap of ferrous metals decreased from 8-11 to 5.0–5.5 million tons per year.
According to the author, while eliminating corruption barriers Ukraine will be able to come out in 2016 at the same volume (4 million tons) of exports of ferrous scrap, which will provide 1.0 to $ 1.2 billion. foreign exchange earnings and about 40 million Euro direct investments in the budget at the expense of export duties. A significant increase in the revenue part of the budget will provide additional tax deductions as a result of the revitalization of enterprises in the procurement and export of scrap metal, and also involved in export operations sea and river ports of Ukraine, shipping companies.
While legislative "umbrella" to justify restrictions of the export of scrap metal there. Article 9 of the Law of Ukraine "On scrap metal" provides that contracts for the export of scrap metal must be registered, but not "approval" and "approval," as interpreted by officials. Accordingly, all decisions and orders of the Cabinet of Ministers, orders of the Ministry, based on the need for "coordination contracts", are questionable from a legal point of view. Quotas for export of ferrous scrap violates not only Ukrainian law, but Ukraine signed an Agreement on accession to the world trade organization and the Association Agreement with the European Union. And, therefore, violates the principles of freedom, including trade.
The author writes that the representatives of industry, Ukrainian Association of secondary metals (Uavtormet) and scrap exporters (of WEM), which unites almost all scrap processing enterprises have repeatedly appealed to A. Yatsenyuk, N. Yaresko, V. Gontareva, A. Turchinov, A. Abromavicius with specific proposals for simplification of the regulatory framework and elimination of regulations that impede doing business in the field of export of scrap metal. "The positive response from the named person and, most importantly, decisive action, unfortunately, no. Shying away from the necessary intervention of the SBU and the interior Ministry, although it is, in fact, about the economic security of the state," notes the author.

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