Legislative framework of road transportation in Ukraine

An Expert's View about Road Freight in Ukraine

Posted on: 29 Jan 2013

Legislation regulating the issues on transport carriages is rather complicated. It includes the laws of the former USSR, current regulatory legal acts, as well as Regulations of International contracts ratified by Ukraine and implemented into the Ukrainian system of law. Hence, when disputed situations as to a contract of international carriage arise, issues of limitation of actions, and the order for filing of claims in disputes related to international transportation are governed by international contracts to which Ukraine is a party and transport codes (charters). Since Ukraine joined the WTO, the transportation services market, namely services on the transportation of goods, is rising in proportion to the development of export and import of goods by Ukraine.

Motor vehicle transportation in Ukraine is governed by the Law of Ukraine “On Motor Vehicle Transport” as of 5 April 2001 No. 2344-III as amended (the “Motor Vehicle Transport Law”), which governs the issues of general organization and exploitation of motor vehicle transport. Besides, all matters relating to motor vehicle transportation are comprehensively regulated by the Charter of the Motor Vehicle transport of the Ukrainian Soviet Socialist Republic as of 27 June 1969 as amended, which is still in force in Ukraine and which governs a wide array of issues concerning organization and conduct of transportation, liability of the parties etc. In addition, all the cargo carriers when providing motor vehicle transportation services are also obliged to comply with the Rules of Transportation of Cargo by Motor Vehicle Transport in Ukraine as adopted by the Order of the Ministry of Transport as of 14 October 1997 No. 363 as amended.

In accordance with the Rules on State Registration and Recording of Cars, Buses as well as Automotive Machines, Motorcycles of All Types, Marks and Models, Trailers, Semitrailers and Cycle-Cars, adopted by the Resolution of the Cabinet of Ministers of Ukraine No. 1388 dated 07 September 1998, all vehicles and semitrailers are subject to state registration by respective branches of the State Automobile Inspectorate of the Ministry for Internal Affairs. Without such state registration operation of a vehicle is forbidden. Under the same Rules, motor transport service is to be established if the number of vehicles possessed by legal entity exceeds 15 items located within the territory of one settlement. Foundation of such motor transport service is a pre-condition for state registration of other vehicles. As regards international transportation of passengers and cargo by motor vehicles international treaties of Ukraine are of primary importance. Currently Ukraine is a party to several bilateral treaties (e.g. with Kazakhstan, Sweden, Iran, Lithuania) dealing specifically with motor vehicle transportation.

Furthermore, Ukraine has acceded to a number of multilateral international treaties facilitating international carriage of cargo by motor vehicle transport. One of the major instruments is a Convention on the Contract for the International Carriage of Goods by Road as of 19 May 1956. Ukraine acceded to the Convention on the Contract for the International Carriage of Goods by Road as of 19 May 1956 according to the Law of Ukraine “On accession to the Convention on the Contract for the International Carriage of Goods by Road” as of 1 August 2006 No. 57-V. According to the Letter of the Ministry for Foreign Affairs of Ukraine as of 16 May 2007 No. 72/14-612/1-1559 it came into force for Ukraine on 17 May 2007. It introduces a unified form of international consignment note which certifies the fact of delivery and acceptance of goods as well as contractual relations between the parties. However, Ukraine did not ratify the Protocol to the said Convention as of 1978 extending limits of the carrier’s liability, nor did it accede to the Additional Protocol as of 2008 introducing electronic consignment note.

Another important instrument is a Convention on the International Transport of Goods under Cover of TIR Carnets as of 14 November 1975. Ukraine is bound by the TIR Convention as a legal successor of the USSR. The Parliament of Ukraine consented to participation of Ukraine in the TIR Convention by the Law of Ukraine “On Participation of Ukraine in the Convention on the International Transport of Goods under Cover of TIR Carnets (TIR Convention of 1975)” as of 15 July 1994 No. 117-97/BP. It substantially simplifies customs procedures for motor vehicles carrying cargos by introducing TIR carnets, which give possibility for such vehicles to transfer the border of up to 4 countries in so far as the total sum of obligatory payments does not exceed USD 50.000,00. Such limit is increased for Ukraine and amounts to EUR 60.000, 00.

Goods, luggage, passengers and mail can be carried by a combination of types of transport under one transportation document, which is called multimodal transport. Under a contract of carriage of goods, a carrier is obliged to deliver the goods of a sender to the destination point within a defined by legislation or the contract term and to pass it to the authorized for the receipt of goods person (recipient), and a sender is obliged to pay for the transportation of goods at set rates.

Under a contract of transportation of passenger and luggage, a carrier is obliged to take a passenger to the destination point, and in the event of booking of luggage — also take the luggage to the destination point and give it to the person, who is liable to receive the luggage, while a passenger is obliged to pay for the trip at set rates, and in the case of booking of luggage — also pay for its transportation. The conclusion of a contract on transportation of passenger and luggage is acknowledged by issuing an appropriate ticket and luggage receipt, the forms of which are set pursuant to legislation.

Trucking services are subject to licensing. The requirements for obtaining licenses and comprehensive procedure thereof are laid down in the “License Provisions of commercial activity relating to provision of services of carriage of passengers and cargos according to types of work as determined by the Law of Ukraine “On Motor Vehicle Transport”, adopted by the joint Order of the State Regulatory Committee and the Ministry of Transport as of 1 February 2008 No. 9/119 as amended. Such licenses are issued by the Main State Inspection of Motor Vehicle Transport.

Legal entities of foreign countries (non-residents) that intend to render transportation services on the territory of Ukraine have to take into account that pursuant to Ukrainian legislation, which regulates entrepreneurial activity, a non-resident and a Ukrainian legal entity have equal rights. Namely, non-residents have the right to acquire into ownership movable property necessary for the performance of such activity. However, foreign companies have to bear in mind that for carriage by rail, sea, inland water, air, motor transport and for the transportation of oil, oil products via long-distance pipelines, and transportation of natural and oil gas via pipelines are all subject to licenses issued by authorized state bodies of Ukraine. Accordingly, motor transportation licenses are issued by the State Inspection of Motor Transport. Railway transportation licenses are issued by the Ministry of Transport of Ukraine. Air transportation licenses are issued by the State department of Air Transport of Ukraine. Sea and inland water transportation licenses are issued by the State Department of River and Sea Transport of Ukraine.

To obtain a license for the transportation by a certain type of transport, a company has to conform to the licensing requirements established for each type of carriage. Thus, there are license requirements for the provision of services on transportation of passengers and goods by river and sea transport; license requirements for provision of services on transportation of passengers and goods by urban motor transport; license requirements for the provision of services on transportation of passengers and goods by railway transport; license requirements for the provision of services on transportation of passengers, goods by air transport. The licensing requirements stated above establish certain conditions for the business legal structure and size of the charter capital of the company, which intends to obtain a license and provide transportation services.

Tariffs for motor vehicle transportation are as well subject to certain state control. According to Article 10 of the Motor Vehicle Transport Law tariff policy on motor vehicle transport shall satisfy entrepreneurial interest, development of motor vehicle transport and stimulate introduction of the newest technologies. For this purpose the Ministry of Transport adopts the methodology for calculation of tariffs for services relating to motor vehicle transportation.

Special conditions are provided for the transportation of dangerous goods (explosive substances, weapons, poisonous, inflammable, radioactive and other dangerous substances). They are regulated by the On Transportation of Dangerous Goods Act and European Agreement on International Road Carriages of Dangerous Goods of 2000.

 


Posted: 29 January 2013

See more from Road Freight in Ukraine

Expert Views    
Regulatory Background of Freight Forwarding in Ukraine   By Marketplace UkrRos LLC
Legislative framework of road transportation in Ukraine   By Marketplace UkrRos LLC