9 August 2018

Customs reform: from one-stop shop to outsource

Regular crusades undertaken in the media by public officials against smuggling, the carrying out of experiments contrary to legislation, and frequent ideas about how to reform the customs services will somehow fail to bring results expected by the country.

The applicable Ukrainian Customs Code does not provide for a definition of ‘customs duty authority’ as such or a similar concept. However, Article 544 specifies that the duty of tax and revenue authorities is to create favourable conditions for the development of foreign economic activity, to ensure the security of society, and to protect the customs interests of Ukraine. In article 545, the customs service is referred to as ‘a customs authority that ensures the performance of tasks vested in tax and revenue authorities within the scope of its competence’. Therefore, the law does not differentiate the tax and revenue authority and the customs authority, resulting in the fuzziness of their functions and allowing for relevant manipulations.

The customs service performance is poor with the Government lost approximately UAH 100 billion in fiscal revenues in 2017 due to flourishing smuggling.

Any government faces grey schemes, which do nothing but become more sophisticated with the lapse of time. To learn more about the reasons behind that, please read the entire article authored by Drozdova & Partners Law Firm Director Olena Drozdova for YURLIGA web-portal.