GREEN CORRIDOR

In the latter half of December, nine of Ukraine’s customs border crossings launched an experiment. To simplify the border crossing procedure and customs control, electronic declaration systems will be installed to speed customs clearance of individuals crossing the border, deputy chief of the State Customs Service Mykhailo Ivaniuk told journalists during a government hotline phone-in.

According to Mr. Ivaniuk, in the first eleven months of 2004 the customs service channeled UAH 16.7 billion into Ukraine’s state coffers, an impressive 29.2% increase over last year. But customs officials are taking a sober view of the situation and are in no rush to celebrate, since they are expected to collect another UAH 1.7 billion by year’s end.

The customs service is not just about collecting duties. Officers spend much of their time fighting cross-border crime. This year alone 320 criminal cases were instituted against smugglers, with the authorities seizing UAH 146.7 million worth of contraband. This year the customs authority reported a more than twofold increase (2.4) in the volume of seized contraband. Not surprisingly, many callers wanted to know what happens to seized items and where they can be redeemed. Ivaniuk answered that seizing contraband is the business of the customs service, but what happens to it afterward is the business of the Justice Ministry, which disposes of all seized property.

Customs officers work to curb the practice of deliberate understatement of the customs value of items. This year penalties imposed in this connection totaled UAH 400 million. Ivaniuk revealed some ruses that people use to skirt the law. Offenders use tried-and-true methods, such as declaring other items than those they are carrying across the border or understating their value. In such cases governmental decree No. 1375, which states that cargo trucks crossing the Ukrainian border must carry export declarations of the country of origin, comes in very handy. According to Ivaniuk, importers often resort to the fraudulent practice of assigning codes to imported goods, which qualify them for customs duty rebates.

The rising statistics of prevented cross-border crimes naturally prompted the question of whether crime is on the rise. Mr. Ivaniuk replied that the increase in crime detection is due to the enhanced performance of the customs service, which is bringing to light an ever-increasing number of crimes that used to go undetected.

The question of used cars clearing customs was to be expected, especially given the rumors that hundreds of cars are now waiting on the border for a green light to enter the country. In fact, many callers wanted to know when they could collect their cars now standing idle at the border. Ivaniuk said that these troubling delays are simply technicalities.

The customs authority has proudly announced some changes to transit legislation, under which excise-free goods in transit via Ukraine no longer need to be accompanied by customs cargo declarations. This has simplified the border crossing procedure and relieved some of the burden on customs officers.

A simplified border crossing procedure is also in place for foreigners entering Ukraine. Last year, the customs service and border guards opened the so-called green corridor to simplify the crossing procedure for foreigners traveling in private cars. This is especially relevant in the summertime when tourist traffic to resorts in the Crimea and the Carpathians increases. Using the green corridor, travelers without goods can cross the border without leaving their cars. If any suspicion arises, they have to pass through the red corridor with its old border-crossing procedure.

Indicative of the liberalization of the customs service is a newly created register of companies whose goods qualify for a simplified customs clearance procedure. The customs service signs a special agreement with a company, which gives customs access to the company’s financial documents relating to its cross-border traffic. Today there are few such businesses, but the customs service is working to expand their numbers. Companies are not resisting this initiative, since it is becoming more prestigious to do business in a transparent manner. Moreover, it is very convenient having the assistance of the customs service.

INCIDENTALLY

The Russian customs authority intends to simplify imports of a whole range of goods. By year’s end Russia may approve a resolution to eliminate the mandatory declaration of perishable goods (fish, flowers, vegetables, etc.) at a number of customs crossings. Russia’s chief customs officer Aleksandr Zherekhov recently made a statement to this effect. By 2006 these changes will affect the imports of cars and household appliances. So far all importers have been registering their goods at customs crossings specially prescribed by the Russian customs authority for different types of cargo. This procedure was necessitated by the need to relieve traffic at border crossings and cut down registration time. However, increased commodity flows began creating problems for both importers and customs officers, with the former accusing the latter of delays and filing lawsuits demanding compensation. However, the elimination of this regulation does not mean a complete liberalization of Russia’s customs clearance procedures. The new regulations do not apply to shuttle traders carrying consumer goods in the trunks of their cars.