If authorized economic operators are introduced in Ukraine both business community and state will benefit – Finance Ministry and experts

If authorized economic operators are introduced in Ukraine both business community and state will benefit – Finance Ministry and experts
February 25, 2016.

Kyiv, February 25, 2016. “Both business community and the state will benefit from approval of amendments to the Customs Code. For business community it will result in less time for customs clearance and will neglect the human factor in this process. As to the state simplification of customs procedures will stimulate increase of flow of goods from the EU countries, it will also stimulate EU companies to come to Ukraine as well as to help our economy grow,” Olena Makeieva, Deputy Finance Minister of Ukraine at Ukraine Crisis Media Center at the discussion on the draft law on introducing authorized economic operators in Ukraine. The draft law suggests granting certain preferences and is based on the EU directives. Thus they include the certificate for simplification of customs procedures. “It will be in demand by the companies that conduct international economic activities and expect very swift customs clearance,” Makeieva explained. Another certificate on reliability and safety will be in demand by logistical companies that are providing services to companies performing export-import activities. Deputy Minister noted that a company may have both certificates, such preferential status is called “authorized economic operator”.

Deputy Finance Minister explained that the companies that are to get the certificate for simplification of customs procedures will be offered priority customs clearance with less number of customs procedures to be applied. Thus they will clear their cargo without checks at customs, noted Makeieva. These companies will also get the status of authorized consignors and thus customs clearance will be made at an authorized location. “The companies that will have the certificate on reliability and safety will be able to send a very brief preliminary customs declaration and while still in transit get informed whether additional physical checks of cargo at customs are required,” elaborated Makeieva.

To get the certificates in question the companies need to have impeccable business reputation, satisfactory system for managing commercial and transportation documents, to not have debts etc. Maximum term for checks on compliance with the above requirements is up to 120 days. “Certificate will be issued by the State Fiscal Service free of charge and for unlimited term. The certificate in question can be recognized in the EU countries based on the Association Agreement that Ukraine and the EU have signed,” said Makeieva.

According to Tetyana Palamarchuk, EasyBusiness partner, certain critical statements as to the draft law in question are explained by lack of understanding of the process. “When experts were working on the draft law EU regulation no.952 was taken as reference. It is the new EU Customs Code that is to come into force this spring. European Union countries start implementing all these norms only now while the State Fiscal Service has received draft implementation and delegation acts. Based on them we were drafting our legislation,” explained Palamarchuk.

Ihor Muratov of the Federation of Employers of Ukraine, EasyBusiness expert, noted that modern history of customs legislation is based on simplifying procedures for honest participants of international economic activities. “This process is based on framework standards of safety and reliability developed by the World Customs Organization in 2005. They contain the idea that if a company that is qualified by customs as reliable, it is granted maximum simplifications,” said Muratov. He added that the draft law on introducing authorized economic operators in Ukraine is just the first step in bringing Ukrainian legislation in correspondence with international standards.

“The draft law corresponds to the maximum to the logic and requirements of the European community. That’s why it is very important that the status of authorized economic operators granted in Ukraine is recognized in the EU and potentially internationally at a later stage,” said Ihor Dankov, co-chairman of the Customs Committee at the American Chamber of Commerce in Ukraine. He also emphasized that in addition to adopting the draft law itself a series of bylaws need to be adopted otherwise the innovations are not going to work.

Oksana Drozdach, co-chair of the Customs Committee at the American Chamber of Commerce in Ukraine, emphasized that the main driving force turned to be “white” big business compliant with legislation. Raising business standards needs to become main task, so that violating the legislation becomes disadvantageous. These legal changes should also help increase the business culture. “At the moment legally-compliant business bears biggest tax burden […]. By introducing this institution white business is granted competitive advantages on the market. The business that does not yet see it possible to conduct its activities in an honest manner needs to follow the example of the legally compliant businesses,” explained the representative of the American Chamber of Commerce. Herman Taslitskyi, member of the Civic Council at the Ministry of Finance of Ukraine; chairman of Customs Committee voiced his expectations that the draft law in question will create conditions under which “being an honest tax payer and an honest international economic activity operator becomes more advantageous than searching for some ‘grey’, illegal ways to minimize taxation.”

“The status in question actually means that one assumes functions of the customs officer. One has been checked, is trusted by state agencies and that’s why major part of customs functions one bears on his own. However one is responsible with his name and honest reputation,” explained the changes in plain words Oleksandr Lazarev, co-chairman of Customs Committee at the European Business Association in Ukraine.

Oleksandr Moskalenko, deputy director of Customs Development Department, head of the Customs Policy Department at the Ministry of Finance of Ukraine said that in the beginning EU experts will be helping Ukrainian colleagues and will be training them to correctly evaluate companies and issue certificates. “We do not only need an EU project but also that it is implemented in the same way as in the EU,” noted Moskalenko. He added that based on the preliminary information the draft law received positive feedback from the EU side. Official response from the European Commission is now expected. Afterwards the draft law will be presented to the government and later submitted to the Parliament.

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