The war caught Ukrainian customs in the process of reform. Before the war, the customs service in Ukraine was reformed in several stages. Some results have been achieved, although the main challenges, corruption, and inconsistent regulatory enforcement, still need to be overcome.
Ukrainian exporting and importing businesses have recently got the much-awaited opportunity to register as Authorized Economic Operators (AEOs). This status will make them trusted companies in the country’s Customs Office’s eyes and considerably facilitate their cross-border trade.
Ukraine has been going through ambitious structural reforms aimed to strengthen its democratic institutions and human rights protection, impose rule of law, and develop modern market-oriented economy. Customs reform is among key reforms in Ukrainian policy agenda in 2019.
In compliance with the requirements of the International Monetary Fund, Ukraine has split its previously combined fiscal service into separate tax and customs agencies. This is a step in the right direction, which should be followed by re-orienting the customs to serve businesses and promote cross-border trade.
The first steps of the long-awaited customs reform in Ukraine started in 2017 only to be cancelled at the beginning of 2018. Meanwhile, customs clearance in the country remains lengthy and complicated, which is reflected in Ukraine’s low positions in comparative international rankings.
The Ministry of Finance proposed to reform customs in Ukraine with the aim of better transparency and predictability. The model of the reform and changes in custom procedures is currently debated between the Ministry of Finance and the representatives of the Parliament and civil society. The reform will hopefully be implemented by the end of 2017.
Businesses in Ukraine want the customs procedures to become less income-focused and instead, to be aimed at facilitating trade. As the 2015 survey of Ukrainian businesses by the Institute for Economic Research and Policy Consulting showed, changes in trade regulations and customs rules are needed to boost international trade.