The new Consumer Protection Act (Law of Ukraine No. 3153-IX) radically changes the rules of the game for Ukrainian businesses. Although it will only come into full effect after the lifting of martial law (and certain provisions regarding the e-buyer portal will take effect within three years), delaying preparations is a sure-fire way to lose sales channels. In this article, we have analysed the main risks for manufacturers, importers, authorised representatives and sellers.
The main mistake businesses make is to assume that liability lies solely with the party that directly delivers the goods to the customer. In practice, if a discrepancy is discovered in retail sales, this leads not only to disputes but also to a halt in sales. The retailer will demand that the packaging, instructions, warranties and promotional materials be revised immediately.
The financial pressure is immediately passed on to the importer or manufacturer. Therefore, even companies operating in the B2B sector need to ask themselves one question: Will our goods be able to reach the end consumer legally and without hindrance under the new e-commerce rules?
The most significant change is the shift towards a strict regulatory framework for e-commerce. The law introduces the E-Buyer Portal and the status of ‘verified seller’. Marketplaces and price aggregators will be required to block those who are not registered in the system.
For businesses, this means that any disruption in the chain (for example, a dealer’s unwillingness to operate under the new rules) will result in the brand’s sales being halted on that particular platform.
Previously, food products were regulated primarily by specific legislation. The new Consumer Protection Act includes food products within the general definition of ‘products’.
Safety requirements are now supplemented by a new set of rules: provisions on distance contracts, promotions, consumer rights and dispute resolution procedures. If the final B2C model does not comply with these standards, the distribution of products across the entire network is halted.
Under the new law, a ‘defect’ is defined not only as a physical fault, but also as any discrepancy in the information provided by the business. An incorrect label, exaggerated claims in advertising or an inaccurate description on a marketplace constitute legal grounds for a return.
It is manufacturers and importers who form the primary information base. To avoid mass returns and fines, it is crucial to ensure that products are correctly labelled. Alden’s specialists will help you adapt your labelling to the requirements of the new legislation, thereby minimising the risks to your business and the likelihood of complaints.
The law sets out the right to withdraw from a distance contract within 14 days. Businesses are now required to publish a specific return request form on their website (standard forms are approved by the competent authority). Furthermore, once such a request has been submitted, the seller must immediately notify the consumer of its receipt. If, however, these procedures are not in place and the consumer has not been properly informed of their right to withdraw, the return period is automatically extended to 12 months!
The law stipulates a minimum warranty period: two years for new goods and at least one year for second-hand goods. In addition, a presumption is introduced: any defect discovered within the first year is deemed to have existed at the time of sale. All costs relating to diagnostics, logistics, dismantling and re-installation are borne by the business.
Products containing digital content (smart devices, equipment with firmware and apps) can no longer be sold as standard goods. Businesses are required to provide information on the availability of updates. If the instructions were incomplete, the seller (and therefore the manufacturer) is liable for any software malfunctions.
Marketing tactics are now strictly regulated. The ‘usual price’ used to calculate a discount is the lowest price over the last 30 days. It is prohibited to conceal additional charges or to levy a commission for card payments without the customer’s written consent. Contracts that restrict the buyer’s rights are deemed null and void.
The new consumer protection law poses a challenge for the entire supply chain. Retailers will not accept losses and will quickly shift the blame onto importers and manufacturers.
To avoid losing profit, businesses need to focus on seven key areas: online channels, B2C in the food sector, verification of information and correct labelling, return policies, warranty obligations, digital content and pricing. Prepare in advance to ensure the transition to the new rules goes smoothly and without financial losses.
