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Criminal Proceedings Launched in Ukraine Against Severstal

News date: 22 April 2021

On 21 April 2021, the National Police of Ukraine in Odessa launched criminal proceedings under Article 366(2) of the Criminal Code of Ukraine (forgery by an official, which caused severe damage) pertinent to Trade and manufacturing company Metiz and Trade company Metiz — dealers of Severstal-Metiz, Russian group of companies.

The criminal proceedings were launched in connection with forgery of the documents, attributable to the goods’ country of origin for the purpose of importing to the customs territory of Ukraine of the steel ropes, manufactured in Russia, bypassing the trade embargo and applicable anti-dumping duties. Ilyashev & Partners acts in defense of interests of Ukraine-based Stalkanat-Silur production association.

Law enforcement bodies are investigating the facts of systemic supplies via Bulgarian company Valimar — official representative of PJSC Severstal — of steel ropes, manufactured in Russia, under the disguise of braces, designating the manufacturing country as the Republic of Bulgaria.

“In the customs documents, batches of the supplied goods were profiled as “Braces”, designating the manufacturing country as “the Republic of Bulgaria”, although the ropes manufactured in the Russian Federation had been used in order to manufacture these braces. The handling of Russian steel ropes in Bulgaria had been done by arranging the rope ends in loops. Upon importing to Ukraine, the loops were cut off the braces and the goods were sold to end users and were identified as the steel ropes,” — Ilyashev & Partners commented on the details of this case.

At the same time, imports of steel ropes that originate from the Russian Federation to the customs territory of Ukraine has been prohibited by the Decree of the Cabinet of Ministers of Ukraine No. 1147 till 31 December 2021. By resolution of the Interdepartmental Commission on International Trade dated 21 February 2020, these products have also been exposed to the import anti-dumping duty that amounts to 50.09%.

In such a manner, based on the forged documents that featured false information about the manufacturing country, representatives of Severstal group imported to Ukraine, under the disguise of Bulgarian braces, minimum 160 tons of steel ropes that had been prohibited for import over the course of the years 2019-2020. As a matter of failure to pay the anti-dumping duty based on the already ascertained facts, the state budget sustained losses in an especially large amount.

“By facing charges of committing the forgery that caused severe damage, the appropriate public officials may be sentenced to imprisonment for a period up to five years, — explains Roman Marchenko, Partner at Ilyashev & Partners, Honored Lawyer of Ukraine. — If suspicions are presented to foreign nationals, such individuals shall be subject to the detection procedures by Interpol and the applicable extradition procedures”.