EBA discussed the risks of draft law on tobacco raw materials with the EU Delegation

11/ 02/ 2026

Today, the European Business Association held a meeting with Nicola Sibona, Head of Trade and Economic Section, and EU Delegation Trade and Economic Section officers to discuss the business community’s position on Draft Law No. 14245 “On Amendments to the Tax Code of Ukraine and Certain Other Legislative Acts Aimed at Enhancing the Effectiveness of Control over the Production and Circulation of Tobacco Raw Materials.” During the meeting, the EBA presented key concerns of the business community regarding the proposed provisions of the draft law. The Association experts emphasized that the requirement to ensure the priority use of tobacco raw materials grown in Ukraine effectively introduces a local content requirement and limits companies’ ability to freely choose suppliers based on quality, price, and technical specifications. Special attention was paid to the proposal to extend electronic traceability and marking requirements to tobacco raw materials. Business representatives consider these measures excessive and not aligned with EU practice. In particular, EU legislation, including Directive 2014/40/EU, requires tracking and tracing exclusively for finished tobacco products, not for raw materials. The EBA also noted that Ukraine is already implementing a number of control instruments in the tobacco sector, including the e-Excise system, enhanced reporting to tax authorities, and video surveillance at production facilities. Introducing additional regulatory layers before assessing the effectiveness of existing tools may significantly increase costs and operational complexity without providing clear added value. Additionally, EBA shared practical insights into the potential impact of the draft law and outlined the concerns in more detail. The parties agreed to continue the dialogue in order to identify solutions that are in line with EU legislation and contribute to a transparent and predictable regulatory environment in Ukraine.

During the meeting, the EBA presented key concerns of the business community regarding the proposed provisions of the draft law. The Association experts emphasized that the requirement to ensure the priority use of tobacco raw materials grown in Ukraine effectively introduces a local content requirement and limits companies’ ability to freely choose suppliers based on quality, price, and technical specifications.

Special attention was paid to the proposal to extend electronic traceability and marking requirements to tobacco raw materials. Business representatives consider these measures excessive and not aligned with EU practice. In particular, EU legislation, including Directive 2014/40/EU, requires tracking and tracing exclusively for finished tobacco products, not for raw materials.

The EBA also noted that Ukraine is already implementing a number of control instruments in the tobacco sector, including the e-Excise system, enhanced reporting to tax authorities, and video surveillance at production facilities. Introducing additional regulatory layers before assessing the effectiveness of existing tools may significantly increase costs and operational complexity without providing clear added value.

Additionally, EBA shared practical insights into the potential impact of the draft law and outlined the concerns in more detail.

The parties agreed to continue the dialogue in order to identify solutions that are in line with EU legislation and contribute to a transparent and predictable regulatory environment in Ukraine.