The enactment of the new Customs Code on June 01, 2012 will bring quite a lot of regulatory changes which will really influence the relationships between business and customs authorities. And, as any new legislative act, it causes resonant judgments and quite controversial comments from different sides, customs authorities and business.
Customs authorities characterize the new version of the Customs Code as an innovative step forward towards the WTO which introduces more clear rules and equal possibilities for both parties of the process. According to the officials of the Central Customs Administration, the regulations of the new Customs Code have direct effect and contain many simplifications which will have a positive effect on customs clearance procedures: they will become more efficient, fast and transparent.
And, in fact, the following actual simplifications for businessmen may be noted, which are stipulated in the new Customs Code: interpretation of disputed regulations of the CC to the favor of a customs applicant; the right to choose the place for customs clearance by the customs applicant him/herself without a letter of clearance; setting a maximum time period for customs clearance not exceeding 4 hours; possibility for a customs applicant to appeal against lack of action by customs authorities, as well as against their actions and decisions; simplification of customs procedures related to taxation of goods imported on the basis of temporary import and re-export regime using the procedure of processing at customs territory; the procedure of amending the Cargo Customs Declaration is legitimized both at the time of customs clearance and within 3 years after customs procedures; several positive changes related to control over establishment of customs value. According to prevailing practices in the last several years, this issue is quite sensible for many importing companies because there is a tendency of the customs authorities to adjust customs value, i.e. overvaluation thereof 1.5-12-fold. Adjustment of customs value by customs authorities is a fiscal instrument for replenishment of the state budget on the account of the proportional increase of customs duties, and it is the main problem in the relationships between “white business” and customs. And the Central Administration promises that the first method will be used when assessing customs value using reliable information and valid documents, which is regulatory set in the new Customs Code as follows: clear definition of the grounds entitling customs authorities to apply indirect methods for assessment of customs value, reduction of the list of supporting documents; the obligation to prove the fact that the interdependence between interrelated persons has effect on the value of imported goods will be borne by customs authorities, etc.
Also, it may be noted that some innovations introduced by the Customs Code, which will give new possibilities for protection of their interests by entities engaged in foreign economic activities, such as: authorized customs operator, the status of whom entitles to receive certificates for simplification of many customs procedures; intermediary decisions which a customs applicant can receive in respect of coding of goods before delivery of such goods, and which will be binding for any customs authority during the clearance process; possibility to receive consultations from customs authorities, as an individual legal act.
But the above mentioned positive innovations are not meanwhile inspiring the business which has already learned from the bitter experience of practical implementations of legal changes. And the Customs Code is not an exclusion because it will entail several difficulties for business: for example, implementation of risk management system, the purpose of which will be prevention, forecast and identification of violations of the legislation of Ukraine pertaining to issues connected with the State Customs Service, which actually means strengthening the procedures of analysis and monitoring by customs authorities. But the most negative changes in the Code are the changes pertaining to documentary verifications. Documentary audits connected with timeliness, veracity, fullness of accrual and payment of customs duties may be carried out by customs authorities with a 1095 days period of limitation of documents.
In the context of today’s agitation of customs authorities to switch to electronic declaration, the mechanism will be as follows. Customs applicants will undergo customs clearance by means of electronic declarations, applying the direct method of customs value assessment, and within 3 years the “post-audit” department, the staff of which has been increased 50-fold in the last several months, will be entitled to adjust customs value and add duties and fines.
But we really want to believe that there will be positive changes for business when the Code is enacted, despite some objective counterarguments. Because customs duties amount to approximately 30% of the state budget’s revenue side, and customs authorities have high goals to replenish the budget in 2012, and we hope that increase in customs payments will take place due to increase in goods turnover, and not due to increase in customs value…
Oksana Kochmarskaya,
Deputy Director, Konsu Kyiv LLC
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