Alcoholic beverage that imitates (reproduces) legally produced excisable goods is subject to criminal offence under Art. 204 of the Criminal Code of Ukraine - SC GC

An alcoholic beverage may be the subject of a criminal offence under Art. 204 of the Criminal Code of Ukraine, provided that it is produced on the basis of alcohols, the content of which is determined in accordance with the norms established by the Tax Code of Ukraine in the version in force at the time of the commission of the offence; unlawful treatment of it as an excisable product defined by law.

This conclusion was made by the Grand Chamber of the Supreme Court.

In the criminal proceedings, the person was accused of acting intentionally, for mercenary motives, for personal enrichment, contrary to the legislation of Ukraine on the circulation of excisable goods, engaged in criminal activities related to the illegal manufacture and circulation of excisable goods (ethyl alcohol) using counterfeit excise stamps of Ukraine. The local court upheld by the decision of the court of appeal convicted the person under parts 1, 2, 3 of Art. 204, part 1 of Art. 199 of the Criminal Code of Ukraine.

In the cassation appeal, the defence attorney argued, inter alia, that the challenged court decisions did not contain a conclusion that the alcoholic beverages seized from the convict belonged to excisable goods with reference to a specific commodity item under the Ukrainian Classification of Goods for Foreign Economic Activity (UCGFEA) in accordance with the opinion of the Supreme Court of Ukraine set out in the decision of 5 September 2013 in case No. 5-15к13. According to this conclusion, the subject of criminal offences under Article 204 of the Criminal Code of Ukraine are only those solutions containing ethyl alcohol, which are produced in the manner prescribed by law (in its broad sense).

Based on the review of the case, the Grand Chamber of the Supreme Court noted that the definition of the concept set out in the said decision of the SCU is typical for alcoholic beverages that are the product of legitimate business activities carried out in compliance with the requirements and production technology established by law. However, it does not seem possible to equate the criteria by which an alcoholic beverage is classified as an excisable good as a product of legitimate business activity and an alcoholic beverage as an object of criminal offences under Article 204 of the Criminal Code of Ukraine, since, given the disposition of this article, the subject of the criminal offence includes excisable goods that are manufactured illegally, and therefore cannot a priori meet the criteria of good quality products, but only imitate (i.e. reproduce) them in some respects in order to give such products the properties of excisable goods.

In the absence of the feature of ‘imitation (reproduction) of a legally produced excisable alcoholic beverage’, home-produced alcoholic beverages cannot be the subject of a criminal offence under Article 204 of the Criminal Code of Ukraine. At the same time, the manufacture or storage of moonshine or other home-made spirits without the purpose of sale, as well as the purchase of such beverages, are administrative offences (Articles 176 and 177 of the Code of Ukraine on Administrative Offences).

In view of the foregoing, the SC GC concluded that it was necessary to deviate from the conclusion set out in the SCU Resolution dated 5 September 2013 in case No. 5-15к13 regarding the definition of the subject matter of the criminal offence under Article 204 of the Criminal Code of Ukraine.

Resolution of the Grand Chamber of the Supreme Court of 27 November 2024 in case No. 336/3796/15-к (proceedings No. 13-10кс24) - https://reyestr.court.gov.ua/Review/123780067.

This and other legal positions of the Supreme Court can be found in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.