Until recently, we had an extra professional holiday on our national calendar – Day of Customs Service. Today, there is no holiday, but the customs service still exists, with all its imperfections, lack of transparency and corruption. What has been happening with our customs since the Revolution of Dignity, why is the Ukrainian budget losing billions every year and how severe are the reforms expecting customs officers? Let’s figure it out.

What was before

The peak moment of Yanukovych’s inner circle. In 2012, the tax and customs service were combined into the Ministry of Revenues and Taxes. According to the investigators, then-Minister Oleksandr Klymenko did not mind abusing his powers. He engaged in scheming around customs, such as customs clearance of of goods at reduced prices and tax avoidance. His schemes have caused possible losses to the national budget amounting to over UAH 6 billion.

The notorious ministry was dissolved back in 2014, creating the State Fiscal Service. Its head Roman Nasirov was also involved in a major scandal following NABU accusations of abuse of power. Now, the SAPO will have to prove in the High Anti-Corruption Court that Nasirov made a number of groundless, illegal decisions.

What is the impact of corruption?

USD 5 billion a year. That is the amount that Ukraine is losing to corruption schemes in customs every year, according to the calculations of Süddeutsche Zeitung. And this is just forging of paperwork to reduce the taxes.

Moreover, over 35% of business representatives believe that corruption in the customs service remains the same (EBA, 2018). The process of customs clearance is still getting stalled, and the practice of requesting unnecessary extra documents continues.

What next?

The State Fiscal Service is being reorganized, and the tax service will be separated again, reforming it into a “fair, honest and transparent customs system,” where the number of procedures will be reduced, and mot of them automated. The authorities claim that the concept has been harmonized with IMF recommendations. For instance, the system “Single Window” has already been set in place, which should help to do away with running around various offices and institutions to collect paperwork.

UPD: Maksym Nefiodov, First Deputy Minister of Economic Development and Trade, has been selected as the head of the State Customs Service. Congratulations and we hope that this appointment will help make a lasting change in the way the Customs Service works.

Until recently, we had an extra professional holiday on our national calendar – Day of Customs Service. Today, there is no holiday, but the customs service still exists, with all its imperfections, lack of transparency and corruption.