Foreign trade of goods illegalization in Ukraine

Economic Annals-ХХI: Volume 142, Issue 7-8(1), Pages: 44-47

Citation information:
Melnyk, T., & Vyshynska, T. (2014). Foreign trade of goods illegalization in Ukraine. Economic Annals-XXI, 7-8(1), 44-47. https://ea21journal.world/index.php/ea-v142-11/

Tetiana Melnyk
D.Sc. (Economics),
Professor,
Kyiv National University of Trade and Economics
19 Kioto Str., Kyiv, 02156, Ukraine
t.melnik64@mail.ru

Tetiana Vyshynska
PhD (Economics),
Lecturer,
Kyiv National University of Trade and Economics
19 Kioto Str., Kyiv, 02156, Ukraine
tvyshynska@gmail.com

Foreign trade of goods illegalization in Ukraine

Abstract. Introduction. In every country, in every economy shadow economic activities are present in the area of foreign trade in greater or lesser extent. Experts have determined that the approximate volume of international trade associated with smuggling, «pirated goods», take over 20% of the legal world trade, «laundering» shadow income in international business is over 2-5% of global gross domestic product. The purpose of the article is to analyze illegalization sphere processes of the foreign trade in Ukraine, to define illegal import and export flows by product and geographical structure using methods of structural and dynamic analysis.

Results. Theoretical approaches to the definition of the term «illegalization» in the area of foreign trade have been generalized in the article. Existing methodological approaches in the worldwide practice to identification and assessment of illegal sector of economy have been analyzed. It has been established that the most appropriate to use the method of comparing the foreign trade data to quantify illegal imports and exports. Method of foreign trade data comparison from Ukraine and its main partner countries has been improved. Corrective parameters (lag time, insurance, chartering, and cost of goods originating in third countries) have been proposed. Illegal trade flows in Ukraine are presented. Possible losses of customs payments from imported goods have been identified. Illegal import and export to Ukraine in accordance with the commodity structure have been analyzed. Thus, it was calculated that in 2002-2012, the biggest amount of illegal international trade with Ukraine had EU-27 countries. Amount of total illegal international trade operations for Ukraine in studied period was 3.49-7.79% of GDP; and total losses in custom receipts from trade with EU-27, CIS and China were $11.64 billion. General financial outflow in 2002-2012 through different illegal trade operations was estimated by the authors in amount of $44 billion. Conclusion. For calculating the volume of illegal import and export, the method of comparing the data with adjustment coefficients could be applied. It shows effectively the routes of illegal operations in international trade of goods and services, facilitating economic regulations in the country.

Keywords: Illegalization; Foreign Trade; Customs Payments

JEL Classification: O17

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Received 28.05.2014