The conclusion states that the draft order of the Cabinet of Ministers contradicts Part 2 of Article 19 of the Constitution, according to which state authorities and local self-government bodies must act only on the basis, within the limits of authority and in the manner provided by the Constitution and laws.

The Ministry of Justice believes that the ban on oil re-export does not comply with Article 42 of the Constitution, according to which everyone has the right to entrepreneurial activity that is not prohibited by law.

The conclusion also states that the termination of customs clearance of re-export oil contradicts Article 43 of the Economic Code, according to which entrepreneurs have the right to independently carry out entrepreneurial activity not prohibited by law without restrictions.

Also, the Cabinet of Ministers' order contradicts Part 1 of Article 96 of the Customs Code, according to which the import and export from Ukraine, as well as transit through its territory of certain types of goods may be prohibited by laws.

The conclusion states that the conditions for movement of goods in the re-export regime are defined in Article 197 of the Customs Code, according to which goods that are re-exported are not used on the territory of Ukraine for the purpose of obtaining profit.

"The draft order of the Cabinet of Ministers... does not comply with the Constitution, the Economic Code, the Customs Code and the Law 'On Foreign Economic Activity,'" the Ministry of Justice conclusion states.

As reported, the Cabinet of Ministers on February 16 adopted a decision on the temporary suspension of oil re-export from Ukraine.

A few days after this decision, it became known that Zvarych intended to resign.

Commenting on Zvarych's intentions to resign, Cabinet members assumed that it was connected with the Cabinet's decision to ban oil re-export.

Experts consider the main motive for Zvarych's decision to be the circumstance that it directly affected the activities of LLC "Oil Transit," where the wife of Justice Minister Zvarych works as deputy director.

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On Wednesday, February 23, the government of Ukraine adopted a resolution according to which a 20% value added tax will be levied on oil imports.

Prime Minister Yulia Tymoshenko told journalists about this, commenting on the decision adopted at the Cabinet meeting on Wednesday.

According to her, in accordance with the Cabinet's decision, from March 1 oil importers will pay 20% VAT on supply instead of the zero rate that existed previously.

In addition, the Cabinet abolished the promissory note deferral of VAT payment upon oil import.

According to Tymoshenko, this Cabinet decision was agreed with oil traders and it removes all abuses related to oil re-export.

As reported earlier, on February 16 the Cabinet adopted an order providing for the temporary suspension of oil re-export from Ukraine.

Previously, according to legislation, oil entering Ukraine was subject to a zero VAT rate and the Cabinet discovered illegal schemes where it was illegally customs-cleared on the territory of Ukraine and then exported.

At the same time, applications were submitted for VAT refunds, which is considered upon export of products.

The Cabinet motivated the decision on the temporary suspension of oil re-export by the intention to prevent deterioration of the situation on the domestic petroleum products market and to ensure loading of Ukrainian oil refining enterprises' capacities in volumes necessary to satisfy the needs of agricultural producers in fuel and lubricants during the spring field work period.

Russia decided to abolish VAT on oil and gas exports to the countries of the Commonwealth of Independent States from January 1, 2005.