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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

The border is waiting for reforms

MPs might change customs rules before the end of the spring session
29 March, 2011 - 00:00

Ukraine’s President Viktor Yanukovych has instructed the government to develop a program of customs reform within a month. With this commission the president, so to say, hit the bull’s eye, as work of customs services has recently given rise to complaints from businesspeople. Suffice it to recall the notices written by Odesa customs brokers concerning the increasing pressure from customs officers during customs clearance in the ports. There were a number of legal cases initiated by the Prosecutor General’s Office that revealed violations at the customs in Lviv. The main department’s reaction to all this was to fire the lawbreakers. This satisfied neither the president nor the public, which aspires to positive changes. Now the parliament’s agenda includes an important question: how to reform the customs correctly.

According to Ukrainian Deputy Prime Minister Serhii Tihipko, the economy is suffering the most from “grey imports” and the absence of determined procedures. “The present non-transparent system puts entrepreneurs in insecure conditions. When one brings a container and doesn’t know how much it will cost to get customs clearance, it’s not business,” claims Tihipko. In his opinion, to avoid this it’s necessary to simplify customs procedures as much as possible, to determine a clear procedure for customs valuation, and to introduce responsibility for violations by customs officers.

The implementation of a system of authorized customs operators will allow companies engaging in long-term foreign economic activity to execute customs procedures with minimal participation of the customs officers. If the regular work of the “single window” is provided, it will reduce contacts with the officials to a minimum and thus also reduce corruption.

According the Head of the Parliamentary Committee for Finance, Banking, Tax and Customs Policy Vitalii Khomutynnik, the committee has started active work on the project of a new version of the Customs Code so that MPs could vote for it by the end of the session.

“The new version of the Customs Code is approved in 70 percent, and we will find agreement with business leaders on the contentious issues soon,” thinks the Director of the Department for Customs Information Technologies and Customs Statistics at the State Customs Pavlo Pashko. In his opinion, the reform has to prioritize the simplification of customs procedures, which is impossible without the introduction of full-fledged electronic customs. “We’re interested in a quick transition to paperless customs clearance for import and export goods. It will reduce corruption and speed up the clearance of commodities,” he explained.

This system has failed to be implemented in Ukraine so far, says the former head of the State Committee for Enterprise Oleksandra Kuzhel, as the government avoided this topic, and various corruption schemes arose when different departments introduced different electronic keys for the document feed. She thinks that the implementation of the electronic customs system will have a positive influence on business, as can be seen from the experience of other countries, e.g. Portugal. “If we don’t introduce the electronic customs, a further innovative element, the information exchange, will be impossible,” she sums up.

The economist Viktor Lysytsky opines that the electronic border will help introduce one more mechanism for the transparent work of customs officers, notably indicative prices. These prices, Lysytsky told The Day, will eliminate the issue of understated or overstated prices for commodities. Accordingly, arguments between customs officers and businessmen, concerning correctness of the sum of money to be paid to the budget, and taxes and duties at the border, will no longer stand.

Business approves all these steps, and asks for several new rules that would take their position into account. The General Manager of Rokada Group, the representative of the working group for the Customs Code development at the Ukrainian government Andrii Bohomolov believes that the reform has to be created jointly, as the customs are unable to reform themselves.

He was supported by the director of the container terminal TIC (Pivdenny port) Andrii Kuzmenko. According to him, officials do not always understand how ports work, which is why part of their suggestions, such as the use of technological transport for the transportation of commodities inside the port or the maintenance of formalized and non-formalized containers are technically impossible. “If this norm is adopted, loading and unloading a container in the port will cost 200 to 300 dollars more, and neither the importers nor the port workers need it,” he expounded.

The deputy director of the Customs Information Systems Center at the Lithuanian Customs Vityanis Alishauskas has already expressed readiness to help the Ukrainian government modernize the border. He has suggested using the European experience in implementing the electronic customs and assured that the EU is ready to provide Ukraine with the necessary technical help.

By Natalia BILOUSOVA, The Day