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Why cargoes are affected by long waiting times at Ukrainian customs?

Author : Olena Holubeva

Source : 112 Ukraine

The business has serious problems with one of the key bodies in its activity - the State Customs Service
14:18, 11 September 2020

Open source

Despite promises from President Zelensky and his team that normal conditions and investment nannies will be created to facilitate honest business in Ukraine, the worst practices of the past are returning. The business has serious problems with one of the key bodies in its activity - the State Customs Service. Companies complain about unreasonable delays in customs clearance at almost all regional customs offices, leading to huge queues. Hundreds of trucks were stuck at the checkpoints of the Kyiv and Lviv customs, where the situation is the worst. Market participants are seriously afraid of a return to dark times when arbitrariness reigned at customs, and those who did not want to wait in line for days at the border were forced to settle issues with the help of high ties or bribes.

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Endless queues at the border

For several months now, residents of Western Ukraine have been observing the situation of the accumulation of heavy-duty trucks waiting in line for customs clearance at the entrance to Ukraine. They resigned themselves to the phenomenon as inevitable, realizing that the solution to the issue depends exclusively on the officials in Kyiv. “On weekends and then on Monday-Tuesday we really observe large congestions of heavy vehicles at the border. Since we have been facing this situation for a long time, we even got used to the fact that drivers waiting for permission to enter Ukraine park on the road, creating problems for the rest of the cars. The truck stands at the checkpoint directly in front of the Lviv sign directly at the entrance to the city,” Igor Zinkevich, a deputy of the Lviv City Council, founder of the VARTA1 community (promptly reports on incidents in the region), told in his commentary for 112.ua.

Over the past few months, all customs offices have been facing difficulties with registration, but the most acute situation remains at the Lviv and Kyiv customs offices, where hundreds of trucks are waiting in line, Oleg Goshko, general director of the transport company RIOTrans, told 112.ua: “At checkpoints from Poland (Galician Customs) queues have always been (once more, sometimes less) due to the physical low throughput of checkpoints. In the last 3-4 months, against the background of persistent problems with throughput, queues have become simply huge. only with the fact that one car is now issued within the time for which three cars were previously issued.”

If the registration of a truck takes 30-40 minutes, then with an additional check of the customs value, the waiting time increases many times, market participants note. “Truck drivers stand in line for more than one day. As a result, instead of three flights a month Ukraine - Poland - Ukraine, it turns out to make only two - this is the main business component. Instead of driving, drivers stand in lines. From 6 up to ten days a month the driver just stands in line.”

Related: Cabinet of Ministers dismissed head of Customs House, head of State Tax Service

The European Business Association has received 20 complaints from its members about delays in the processing of goods and queues at the border. “We understand that the customs service is changing its leadership and it is difficult to set up all the processes quickly enough, but for a transparent business that honestly pays all taxes and fees to the budget, a change in management is not enough reason to put up with the willfulness of customs officers,” Anna Derevyanko, executive director of the Association, told 112.ua.

Applications from companies began to arrive in late August-early September. “Most of the complaints came about the actions of customs officers of Kyiv and Lviv customs, but there are problems with customs in other regions. Among those who applied there are both international and domestic companies, both market operators and carriers. We do not disclose the companies that applied. We hope that those who complained and whose appeals were forwarded to the leadership of the State Customs Service, in the future will not experience additional pressure from government agencies, the same customs. We well remember how it was in the past, when companies were "punished" for appeals to transparent structures with a request to help defend legitimate interests. I would not like to return to dark times, when transparent business experienced serious problems due to the fact that it did not pay bribes, and those who did not disdain corruption risks had advantages over it,” said Anna Derevianko.

The overwhelming majority of complaints from companies are related to delays in customs clearance due to discussions over the customs value of goods.

“Until recently, we were sure that this kind of thing remained in the past. For many years, such questions have not arisen. Recently, a contract, an invoice (a document provided by the seller to the buyer and containing a list of goods and services, their quantity and price at which they were delivered to the buyer, formal features of the goods (color, weight, etc.), delivery terms and information about the sender and the recipient, - ed.) in some cases, additional documents that companies on their own initiative could provide customs, were an exhaustive list of documents confirming the fair customs value of the goods. These documents are enough to carry out customs clearance,” Derevyanko stressed.

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Business trying to reach out far-off offices

The European Business Association and the American Chamber of Commerce are associations that unite the largest companies, including foreign investors and major taxpayers, to resolve the issue, they began to seek a meeting with the leadership of the State Customs Service. “At first, we could not achieve a dialogue with the leadership of the EBA State Customs Service: we went to the press, and only after that the process moved off the ground. Before that we were told that what was happening was connected with perturbations, the restructuring of internal customs processes. But! Customs is a body with There are big doubts that what is happening is connected with the arbitrariness of the management or individual employees of specific local customs,” Derevyanko said.

Related: 50% of Ukraine's customs officials fired at meeting of State Customs Service collegium

In May, half of the heads of regional customs offices were fired. Since the beginning of the year, the third head has been appointed to the State Customs Service - now the department is headed by Andriy Pavlovsky. On April 24, the Cabinet of Ministers dismissed the head of the State Customs Service Maksym Nefiodov.

After that, the customs office was headed by Ihor Muratov. In mid-August, he was dismissed due to the alleged “delay in reforming the department, in particular, because of the delay in preparing the department's transition to work in the format of a single legal entity.”

On September 8, Pavlovsky met with representatives of the European Business Association and the American Chamber of Commerce. He promised to hold a conference call on the issue. “Today we see that the situation has gotten off the ground. After the issues were raised by business at all levels, most of the cargo went,” Derevyanko assured.

Following the meeting with representatives of the Associations, the head of the State Customs Service "studied information about the delay in cargo of Ukrainian companies at several checkpoints and gave guarantees: a transparent business will not have problems with passing customs control," the press service of the State Customs Service reported.

"Now we are observing the delay of goods at some customs points. However, I want to note that there is no sabotage on the part of the customs authorities: the work process is carried out exclusively in the legal field. Indeed, the duration of customs clearance may fluctuate. At the same time, it depends on the subject itself If there are no questions about the documents, the content of the cargo and its declared value, then the clearance takes place in the shortest possible time. Today, we do not observe violations of the legal control period (up to 10 days) at customs," Pavlovsky's press service quotes.

Among other things, Pavlovsky assured that companies that did not have a history of violations will be given the status of a “reliable subject” by the system: “This is a marker that the client has met the transparency criteria for a long time. Then its registration takes place quite quickly.”

Related: Customs, Tax Services to work in new format in Ukraine

Return of dark times

“We are afraid of a return to the practice when companies were obliged to constantly prove that the customs value was such, and not otherwise. Often, companies bring promotional goods or goods for which the price has been revised. Since we live in a market economy, it happens that one and the same goods can be imported with different prices. If there is a contract and an invoice available, then this should be enough for the clearance of goods of companies that, moreover, have been working in Ukraine for a long time and have never been noticed in attempts to dishonestly pay all customs payments in full If in specific cases the customs sees grounds for additional verification, then it may well be carried out during the post-audit after the completion of customs clearance in the regular mode. If during the post-audit the company cannot prove its case, and the customs can do it, there will be grounds for a fair revision of the customs value,” EBA executive director said 112.ua.

We, as a private business community, did not ask for any preferences for specific companies, did not ask for benefits, says Derevianko. According to her, business asks for an equal approach and respect on the part of the state institution to the current legislative norms, comfortable conditions for all companies that work honestly.

“If Ukraine wants to return to its past practices, when the customs did not collect payments, namely, it collected them from the companies at the customs, sought to knock out as much money as possible, not caring about anything else, then it is worth, perhaps, honestly telling them about this: they say, we have taken a course towards an administrative regime for determining the customs value and want to fill the budget at any cost. Then companies will at least be aware of the situation and decide whether they should continue to do business in Ukraine. We do not want such approaches to become a permanent practice,” Anna Derevyanko noted.

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The EBA Executive Director also noted that the companies complaints about delays in customs clearance, as it is bad for the import perishable products. There are construction companies for which the rhythm of deliveries is of great importance: “Companies now have to work in difficult conditions due to the coronavirus pandemic. Against this background, delays in customs clearance are felt especially sharply by them. All this negatively affects companies that legally pay white wages and all taxes, on their financial condition. If such phenomena take place for a long time, revenues to the state budget may decrease.”

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