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  • Customs reform is moving in the right direction, but due to a lack of understanding of the processes and consequences, it is resisting - monitoring results

    17.06.2021

    On June 16, 2021, experts from the Institute for Economic Research and Policy Consulting (IER) presented the results of the Public Monitoring of Certain Aspects of Customs Work under the project “Support to the Public Initiative“ For Fair and Transparent Customs” with the support of the European Union, the International Renaissance Foundation and Atlas Network. 

    In January-April 2021, the IER and four partner organizations collected data and monitored the work of seven regional customs offices of the State Customs Service: Volyn, Polissya, Odessa, Kyiv, Halych, Vinnytsia and the North. To collect information, the method of in-depth semi-structured interviews with representatives of stakeholders was used: exporters, importers, customs brokers, representatives of customs and control authorities, as well as with experts. 

    43% of respondents believe that customs reform is moving in the right or rather right direction, while almost 35% believe that the direction of customs reforms is wrong or rather wrong. 

    According to Oksana Kuziakiv, project team leader of the support for the public initiative "For Fair and Transparent Customs", entrepreneurs do not have a clear understanding of customs reform, so there is no trust, and innovations meet with some resistance. “We have to take into account that different stakeholders have different expectations. And we need to work with them in different ways. The issue of trust is very important - trust in the state. Entrepreneurs fear that greater openness will create conditions for other bodies to interfere in their activities. That is why you will not be so active in innovation, ” - Kuziakiv said. 

    From the customs reform, respondents expect, first of all, a reduction in time during customs procedures, automation and reduction of queues. Every tenth respondent (9.6%) simultaneously expects a decrease in the fiscal role of customs and an increase in customs revenues to the state budget. "This means that respondents have different interpretations of what the" fiscal role of customs "should be and what results a change in this role can lead to," said Iryna Fedets, a senior researcher at the IER. 

    41.4% of respondents believe that the regulatory conditions for doing business have improved over the past 2 years. The average Index of changes in the business environment according to all respondents is +0.07. The worst scores were given by customs brokers (-0.06), the best - by representatives of customs authorities and CCI (+0.33). 

    Respondents rated different types of control (phytosanitary, veterinary and food safety control) as not causing problems or causing minor problems. Customs control, which is considered the most difficult, causes mostly minor problems. Passing different types of control is more problematic for importers than for exporters. 

    Respondents noted the improvement of infrastructure in recent years, but pointed out the shortcomings: queues, lack of equipment, lack of service infrastructure for truckers, unsatisfactory general condition of customs posts. According to Andriy Butin, a senior researcher at the IER, there are significant regional differences in the quality of customs infrastructure. "The European direction is in a better condition than, for example, the direction to Belarus," he said. - Despite the long history of trade with Belarus and Russia, today we have a greater emphasis on the European direction. That's why the conditions there are better." 

    Most respondents are well informed about the new digital customs products (state information web portal "Single Window for International Trade", QD Professional, MD Declaration, online map of the infrastructure of Customs facilities. Business Intelligence analytical module). However, respondents emphasize the need to refine digital products, ensure their smooth operation, more actively inform businesses about these products and their functions.

    For example, 52.9% of customs brokers and business representatives who know about the personal account on the portal "Single Window for International Trade" and use it, complain about the "hanging" of the site, problems with entry and display of not all declarations. 

    As for NCTS (New Computerized Transit System), most of the surveyed brokers and subjects of foreign economic activity are quite generally informed about it and do not sufficiently understand the mechanism of its activity. They complain about the lack of information materials about this system. 

    Most businesses know what Authorized Economic Operator (AEO) status is. 43.2% of enterprises participating in foreign economic activity would like to obtain the status of AEO, but for almost half of the respondents the procedure for obtaining this status is unclear. 

    Respondents rated corruption at customs at an average of 3.7 points, where 1 is a high level of corruption and 5 is a low level or no corruption. Representatives of regulatory authorities and experts assess the situation worse - by 3.3 points. According to some respondents, customs corruption has decreased due to automation, the transition to electronic document management and reducing the role of customs. 

    Two thirds of respondents believe that the Security Service of Ukraine (SSU) has the greatest influence on the work of customs among all law enforcement agencies. Respondents point to obstacles for official business that arise due to the involvement of the SSU in customs control, including increased time for customs procedures, cargo care and "manual" control over transportation/

    Public Monitoring of Certain Aspects of Customs Operation 2021: Analytical Report 


    Interviews were conducted by regional partner organizations: Association of Customs Brokers of Ukraine (Kyiv), NGO "Agency for International Cooperation" (Lutsk), NGO "Association of Regional Media" (Chernihiv), NGO "SFERO" (Vinnytsia). 117 respondents were interviewed in 8 regions: Vinnytsia, Volyn, Kyiv, Lviv, Odesa, Rivne and Chernihiv regions, Kyiv.

    The Public Initiative "For Fair and Transparent Customs" was launched by the IER in 2018 to promote the successful implementation of customs reform and build an efficient and fair customs through continuous public monitoring. The participants are 26 CSOs and business

    associations. The activities of the Initiative from 2020 take place within the framework of the IER project of the same name, which aims to increase the capacity of civil society to participate in the development of economic policy in Ukraine. The project is implemented with the financial support of the European Union, the International Renaissance Foundation and the Atlas Network

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