A conflict that may end in an international scandal

The Tax Inspectorate performs a spot check on Ukraine’s leading film distributing company@WW

On April 5 the tax police of the State Tax Inspectorate in Kyiv’s Shevchenkivsky District confiscated the accounting documentation and computers of Ukraine’s leading film distributor. The official press release of B&H Distribution Co. says that these items were confiscated illegally, without making the list of the documents. On the same day, at Le Doyen dubbing Studio (a subsidiary enterprise of B&H) the equipment for dubbing audiovisual products into Ukrainian language was illegally confiscated. The company asserts that the actions of the Tax Inspectorate may result in “disruption of screening in Ukraine of the world-renowned movies, non-fulfillment of the undertaken obligations before the foreign partners and possible bankruptcy of the enterprise.” As explained, the reason of the “raid” was the launch of a criminal action against B&H. The company claims it was groundless.

Immediately after these “large-scale” actions of the Tax Inspectorate, as defined by the company’s press release, several essential ideas concerning the nature of the phenomenon were expressed. First, it is of course a political issue, as the company is the pioneer of Ukrainian-language dubbing (it owns 60 percent of the market). Second, this is a business issue, as B&H, which is quite essential, is the leading film distributor over Ukraine.

All this being fair, the story also has another important connotation, which has been mentioned by ex-head of the State Cinematography Agency Hanna CHMIL in a commentary to Den/The Day:

“Two very important items were confiscated from the company, which are connected not only with the accounting activity. These are hard disks, carrying the originals of the matrixes of the new movies, both dubbed and not dubbed yet. Here it should be admitted that in our time we led heated debate with the world organizations concerning the problem of piracy in Ukraine, which was connected with protection of authors’ rights, especially when Ukraine was entering the WTO. As a result, we made several important steps, we made decisions, which were assessed by foreign companies (unfortunately, we stopped our activity in this direction). Moreover, by ratifying the European Convention on Cinematographic Co-Production, Ukraine practically entered the all-European field, including the legislative level. I asked lawyers what these actions can entail. If, God forbid, at least one copy of the confiscated movies appears on the market, this will be a huge international scandal,” Chmil warns.

So, this is not only a domestic problem, whether it refers to language, political, or business issues. This is a question of Ukraine’s ability to keep to the international law, the obligations before the international community the state undertook. If the confiscated movies get on the pirate market, people who have an invincible desire to take over the branch, will probably have nothing to take over in Ukrainian cinema market.

According to social networks, civic activists plan several protest rallies against the actions taken against B&H. One of them will take place today at 12 p.m. at the central squares of Ukrainian cities, another one – on April 12 in front of the Cabinet of Ministers building.

The topic will be continued in the next issue.