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  • IER presented the results of public monitoring of the border crossing from the point of view of business and citizens "Fair Border"

    22.12.2022

    On December 22, the Institute for Economic Research and Policy Consulting, within the project "Support for the Public Initiative "For Fair and Transparent Customs," presented the results of public monitoring of the border crossing from the point of view of business and citizens "Fair Border," conducted during September-November 2022.

    During the presentation, Deputy Head of the State Customs Service of Ukraine Vladyslav Suvorov emphasized the importance of conducting such monitoring and also spoke about the work of the Ukrainian customs and the problems it faced due to Russia's full-scale invasion. 

    "It is very good that, despite the situation in the country, you continue researching and studying public opinion, which is very important for customs as well. Ukrainian customs officials faced the problem of fuel and lubricants shortage; then we faced the problem of product shortage because the enemy blocked the traditional routes of Ukrainian exports. The war changed priorities. What will be done in this extremely difficult year is Ukraine's entry into the common transit procedure. We are the 36th member country of this convention. NCTS system declaration is customs formalities, for example, from Romania, that take up to five minutes. If there is no such declaration, it takes 30 minutes," said Vladyslav Suvorov. 

    Director of the Department of Customs Policy of the Ministry of Finance of Ukraine, Oleksandr Moskalenko, spoke about the importance of the implemented changes and joining the Convention on the NCTS common transit procedure. 

    "Since October 1, we have had changes in our procedures. For our part, we have conducted a significant amount of consulting for businesses. Currently, a new philosophy of customs control and clearance is being formed. If about 80% of enterprises in the EU now use simplification, then it is already the main system of registration of enterprises. I call on you, specialized associations, advisers, and experts in the field, to communicate more actively about the fact that Ukraine is moving in the same direction as the EU, and businesses need to use this simplification regime more actively,” Moskalenko said.

    Oksana Kuziakiv, executive director at the Institute for Economic Research and Policy Consulting and project manager, spoke about the purpose and features of the monitoring conducted by the organization: 

    "In the middle of the summer, we returned to issues related to crossing the border. Our partners in the regions and we saw that it is necessary to receive feedback. Our research aims to obtain feedback on satisfaction with border crossing services and to give recommendations. The peculiarity of our approach is that we involved regional NGOs to collect and analyze data as they know better and can reach businesses and citizens who cross the border," explained Oksana Kuziakiv.

    According to Dariya Shapovalova, a junior research fellow at the IER, since the beginning of the full-scale invasion, it took longer to cross the foreign checkpoint than the Ukrainian one. 

    "On average, our respondents stayed at a foreign checkpoint longer than Ukrainian one. At the checkpoint of a foreign country, this indicator was 47 minutes, and at the Ukrainian checkpoint it was 41 minutes. A similar trend is observed in front of checkpoints: for a foreign country, the figure is 76 minutes, and for Ukraine it is 61 minutes. In general, it takes more time to cross a foreign checkpoint than a Ukrainian one," the expert explained.

    She added that in November, the maximum time of stay, waiting, and crossing the border on both sides decreased. 

    "The time decreased the most on the part of the foreign country, in particular by 18 minutes, but for Ukraine, it became shorter by only 6 minutes. On average, citizens spent 4 hours 33 minutes crossing the border in September, 4 hours 9 minutes in October, and 3 hours 51 minutes in November," Dariya said.

    According to the junior research fellow at the IER, the passengers cited the following problems when crossing the state border: in the 1st place - the presence of queues at the border crossing (38%), in the 2nd place - slow work of staff (23%), and in the 3rd place - the restroom absence or inaccessibility(15%).

    Regarding the necessary conditions for passengers at Ukrainian checkpoints, only a quarter of the respondents noted that there is a restroom at checkpoints.

    "Another 20% noted the presence of the rain/sun canopy, 13% named duty-free, 12% mentioned the presence of a cafe or places to sit, and 23% of people did not pay attention or do not remember," Dariya added.

    Also, according to Daria, the monitoring results showed an increasing trend of satisfaction with sanitary conditions and the quality of Internet and mobile communication at checkpoints. 

    "The average rating of satisfaction with sanitary conditions increased from September (3) to November (3.2). The average rating of satisfaction with the quality of the Internet and mobile communication remained unchanged - 3.6. However, everything is not so clear regarding the level of satisfaction with sanitary conditions. The average rating has increased, but quite a lot of respondents rate sanitary conditions as "1" and "2" - 25%, another 25% rate it as "3" and exactly half (50%) rate it as "4" and "5". However, the average rating of satisfaction with the quality of the Internet and mobile communication did not increase. Only 21% of respondents rated it at "1" and "2", 16% - at "3," and 63% at "4" and "5". - said the expert.

    Taking into account the indicated results to improve the work of customs IER experts advise:

    • to increase the number of employees of the State Customs Service and the State Border Service serving the respective checkpoints;
    • to introduce regular online monitoring of border crossings, organize places for eating at checkpoints, especially in winter time (setting up places/cafes);
    • to improve sanitary conditions, in particular, add clean restrooms at the checkpoints and at the entrances to them, and improve access to mobile communication networks of Ukrainian operators.

    Andriy Butin, a senior research fellow at the IER, spoke about the monitoring results as part of the survey of Ukrainian businesses. He emphasized the changes and difficulties that appeared in the work of exporters and importers with the beginning of the full-scale Russian invasion. 

    "All goods are now moving through the western border, and it increased the burden on customs workers and border guards working on the EU and Moldova side. It affected the increase in the queue and, accordingly, the foreign economic activity. It affects the delivery time of our exporters and reduces the competitiveness of our producers in foreign markets. After the war started, businesses started trying to ship through seaports, but this increases the cost of shipping and production, and therefore, makes the product less competitive in the market,” he explained.

    According to Butin, the monitoring showed a gradual increase in operations using the NCTS transit mode. At the same time, the respondents stated the complexity of the new service and the insufficient amount of information about its operation.

    As for the obstacles, as the survey showed, the respondents noted: a lack of skilled personnel at customs, queues at the border/much waiting time at checkpoints, increased frequency of additional customs inspections of homogeneous goods (re-weighing of cargo), abuses during the import of humanitarian aid, cases of non-transparent determination of customs value , cases of corruption to "speed up" the passage of customs procedures.

    As for infrastructural obstacles, the monitoring participants emphasized the reduction of capacity on the international checkpoints from the Hungarian side since September last year, the absence of a customs terminal in Chernihiv, cases of corruption at checkpoints set up a few kilometers from the international checkpoints (selective passage of those, who paid the contribution (Hrushiv and Sheghyni checkpoints), the impossibility of completing foreign economic contracts, by which payments were made to counterparties from Belarus until February 24, due to the impossibility of returning the subscription or receiving goods that require legal regulation (non-return of currency funds).

    Also, as Butin added, the respondents complained about the sharp increase in the number of blocked tax invoices (from 2-5% to 70%), losses during currency transactions due to the difference in the official hryvnia exchange rate of the NBU and commercial banks, the low quality and speed of work of the State Food Products Safety and Consumer Protection Service due to its inferior digitization, the increase in the cost of cargo transportation services by Ukrainian companies due to the lack of competition and the peculiarities of one-way delivery.

    Taking into account the results, the IER experts advise the following to improve the work of customs and facilitate business conditions:

    • create a logistics hub on the western border of Ukraine;
    • open a customs terminal in Chernihiv;
    • implement an electronic queue at the border linked to the number of customs declarations and monitor the dynamics of the movement of cars in the queue (customs officers and border guards);
    • increase the number of inspectors at customs;
    • intensify negotiations with neighboring countries to organize joint control at the border and increase the capacity of international checkpoints of neighboring countries;
    • establish more efficient communication with representatives of the customs of Bulgaria and Georgia (movement from sea ports);
    • to complete additional tracks at the checkpoints and to remove "problem" vehicles there;
    • to organize a more simplified border crossing for regular participants of the bus service;
    • continue measures to popularize the use of the common transit regime (NCTS) by Ukrainian enterprises;
    • resume regular meetings of regional customs representatives with business.

     

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