CRITICAL MISTAKES IN EXPORT OPERATIONS: ANALYSIS OF A REAL CASE AND ITS CONSEQUENCES FOR BUSINESS (Part 1)

The Client entered into a number of export contracts with non-residents, under which goods manufactured in Ukraine were exported abroad for a total amount of approximately EUR 400,000. These export transactions were subject to currency control.

Under Ukrainian law, following the export of goods outside Ukraine, the proceeds must either be credited to the Client’s (Exporter’s) bank account within 180 days, or the exporter must file a claim for debt recovery with a court within the same period.

However, the non-resident counterparties failed to settle payments with the Client within the statutory deadline.

The Client conducted negotiations regarding payment for the supplied goods, but these efforts did not produce any results.

After the expiration of the 180-day period, the Client filed several claims with Ukrainian courts seeking recovery of the outstanding debts.

In parallel, the tax authority conducted an audit and assessed UAH 7.1 million in penalties for violation of the deadlines for repatriation of foreign currency proceeds.

The Client approached us at a stage when:

The court of first instance had closed the proceedings in the debt recovery cases due to lack of jurisdiction of Ukrainian courts.

At the same time, once such decisions entered into legal force, the Client could have been effectively deprived of the possibility to recover the debts through court proceedings, while the tax authority could have increased the penalties up to the UAH equivalent of EUR 400,000.

The Client had lost the case at the court of first instance in the tax dispute challenging the assessment of currency penalties in the amount of UAH 7.1 million.

As a result, the Client not only failed to receive payment for the supplied goods (approximately EUR 400,000) and faced the risk that Ukrainian courts would refuse to consider these disputes, but also remained liable to the state for UAH 7.1 million in penalties — with the prospect of this amount being increased by the tax authority up to the equivalent of EUR 400,000.

We were tasked with urgently salvaging the situation — effectively retroactively.

What happened next will be discussed in the following post.

This material is published with the Client’s consent.

15.12.2025