Import tariff waylays biz for Ukraine

Buyers face tax on foreign films, TV shows

CANNES -- Ukrainian customs officials have imposed a new tariff on intellectual property rights entering the country, demanding buyers of foreign films and TV shows pay an additional import tax amounting to 20% of their license fee.

The move has essentially shut down Ukraine's international acquisitions business as channels and distributors find themselves unable to bring in foreign product.

"Everything's stopped at the border, no one knows what to do," said Iryna Kostyuk, director of Media Resources Management and a consultant specializing in the Ukrainian media industry. "Channels who have bought new shows are scared to air them for fear of having to pay the tax plus a fine, so they are showing reruns instead."

Customs headaches are nothing new for Ukraine, though the recent measure is more extreme than previous levies.

Local broadcasters and producers are pushing to change the law but this being an election year in Ukraine that could prove a difficult task.

"I don't expect anything to change soon," Kostyuk said. "In the end, it will probably mean more bribes and more corruption. Either channels will air their shows and hope to get away with it or they will bribe the right official to get them to look the other way."