Senior partner, attorney
DEGA Partners Law Firm
According to GfK company research, the share of “gray” imports, sales of “gray” imports of household appliances and electronics in 2019 in Ukraine is 24% of total sales of the legal market of this segment of the economy of Ukraine, which in foreign currency equivalent is 20.5 billion UAH, or 792 million USD.
What are the prospects of the “gray” market of home appliances and electronics in a crisis in the world economy, preventive epidemiological measures related to the pandemic virus COVID-19, restriction of trade networks, temporary closure of international logistics supply channels, closure of customs checkpoints and other negative factors in trade?
According to the results of the comparative analysis of indicators for 2018 and 2019, it should be noted the increase in “gray” imports in 2019. General indicators and market sentiment in early 2020 indicate the expected growth dynamics of “gray” imports.
The specifics of the work of most subjects of e-commerce of home appliances and electronics is to operate in the “shadow”, in the absence of identification of business entities, in order to evade taxation and avoid liability for violations of the law. Such subjects always have the opportunity to “earn” with the use of illegal schemes. And now they see a real opportunity to work without competitors (entities that legally import and sell equipment in Ukraine), as corporate security measures of the latter are aimed at complying with legal restrictions on the mode of operation of companies as a whole and their staff.
It should be noted that an additional incentive for the growth of the “gray” e-commerce sector is the introduction of restrictions on the influence of regulatory and law enforcement agencies on the implementation of illegal activities, as government agencies also operate in a quarantine regime.
The key to success in overcoming such a phenomenon as “gray” imports is the systematic work with violators by legal business; by state institutions of Ukraine at all levels of government (executive, legislative, judicial), as well as by the media, which form the public vision and attitude to this problem.
1. Claim work on behalf of the owner of the trademark, which allows:
2. Initiation of criminal prosecution of violators by appealing to:
3. Judicial protection of infringed rights (trademark owner or consumer whose rights have been infringed during the purchase of illegally imported products into Ukraine).
Statistics of successful cases of DEGA Partners Law Firm on the above issues for 2019 allow us to conclude that the skillful use of the above tools of legal influence can be effective for legal business, as it will significantly strengthen its position in the e-commerce market and eliminate dishonest players.
– pre-trial claims work was carried out with violators engaged in the sale on the Internet of products illegally imported into Ukraine, as a result of which commodity positions on more than 460 web resources, including price aggregators and marketplaces, were closed / removed;
– pre-trial claims work was carried out with violators engaged in offering “fictitious” service on the Internet, as a result of which 12 large “fictitious” services were closed (closing was preceded by a detailed legal investigation to identify persons involved in the service);
– for the first time in law enforcement brought to criminal responsibility under Art. 229 of the Criminal Code of Ukraine, the owner of a large online store (“gray” import) and collected in favor of the owner of the trademark losses for illegal use of the trademark;
– developed a positive practice of conducting domain name disputes in the courts of Ukraine with the obligation of hosting providers to stop delegating the domain name of the Internet resource, which violates the right to use the trademark;
– developed approaches and methodology of interaction with state control bodies of Ukraine to stop the implementation of “gray” imports / counterfeits in Ukraine (Department of Consumer Protection of the State Food and Consumer Services of Ukraine, SFS of Ukraine, etc.), as well as law enforcement agencies of Ukraine to investigate criminal cases and prosecute sellers “Gray” import / counterfeit (Article 190 of the Criminal Code of Ukraine “Fraud”, Article 212 of the Criminal Code of Ukraine “Tax Evasion”).
Under such circumstances, we plan to apply and improve all the experience and skills gained in the fight against “gray” imports and counterfeiting in 2020.