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  • A Quarter of all Goods on the Ukrainian Market is "Gray Imports" (Survey)

    11.12.2020

    On December 10, 2020, experts from the Institute for Economic Research and Policy Consulting (IER) presented the fourth part of the V Annual Survey of Exporters and Importers on corruption and “gray imports” at Customs. In total, more than 1,000 Ukrainian exporters and importers were interviewed in April-June 2020 with the support of the European Union, the Renaissance Foundation and the Atlas Network.

    20% of respondents consider corruption and bribery to be a problem in the work of customs. At the same time, enterprises do not consider corruption to be a priority. Corruption ranks fourth in the list after imperfect customs legislation, overestimation of customs value and lack of transparency and openness. According to IER Executive Director Oksana Kuzіakiv, the study shows that there is a strong link between the level of corruption and the efficiency of customs. "Those customs that have bigger problems with corruption were assessed by the respondents as less effective," – she concluded.

    44% of respondents consider the presence of "friends" in government important for successful business. This is slightly more than in 2018, when there were 39% of such respondents. Most often, respondents mean “friends” in customs and tax authorities, but the importance of "friendship" with them in 2020 has diminished. "The study shows a tendency for importers to treat informal relations with the authorities primarily as means of protecting business, and exporters - as means of facilitating business," - said Iryna Fedets, IER Senior Research Fellow.

    A quarter of all goods on the Ukrainian market is "gray imports". This level has not changed since 2018, but the share of respondents who are aware of this phenomenon on their market has increased significantly. At the same time, "gray imports" is not an acute problem for importers. In 2020, it ranked 9th among the problems – same as the problem of poor infrastructure.

    More than ¾ all respondents support the criminalization of smuggling. At the same time, 53% support criminal liability without imprisonment, and only 26% support criminal liability with imprisonment. According to Ekaterina Yakovleva, the Public Finance Manager of the EU Delegation to Ukraine, Ukraine is the only country in Europe where smuggling of goods is not a criminal offense, causing Ukraine to lose significant budget revenues. “Like most respondents in this study, we believe that it is very important for Ukraine to effectively criminalise the large-scale smuggling of all commodities. Today, this issue is very high on the agenda of cooperation between the EU and Ukrainian counterparts", - she concluded.

     

    Background information:

    The survey was conducted by the Institute for Economic Research and Policy Consulting in April-June 2020 within the project Support to the Public Initiative "For fair and transparent customs" with the financial support of the European Union, the International Renaissance Foundation and Atlas Network. It was attended by 1 thousand 45 enterprises engaged in foreign economic activity.

    The Initiative “For Fair and Transparent Customs” was created in 2018 and aims at facilitating the successful implementation of customs reform and the construction of effective and fair customs through ongoing public monitoring. The Initiative is led by the Institute for Economic Research and Policy Consulting and co-funded by the European Union, International Renaissance Foundation, and Atlas Network. The Initiative includes 26 NGOs and business associations.

    The first partof the report on customs reform is available here. The second part – here. The third part – here.

    For more information please contact Olena Rubanik: +38 (097) 352 04 11 or rubanik@ier.kyiv.ua

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