You're reading: Lviv Oblast’s border with Poland is clogged daily with opportunistic small traders

SHEHYNI, Ukraine – There are lots of road signs in the city of Lviv and the surrounding oblast pointing to Shehyni, a village of 1,000 people straddling the M-11 highway.

The village, 630 kilometers west of Kyiv, is unremarkable but for one thing – at its western end is one of Ukraine’s largest border checkpoints with Poland. Most importantly, it’s the only one of the region’s six border checkpoints that allows people to cross the Ukrainian-Polish frontier on foot.

This has spawned a lively, small-scale smuggling industry in the village, which supplements the locals’ meager incomes and raises money for the Polish budget. But it also gives trouble to local business and the customs authorities.

Four-dollar trade

After the Soviet Union collapsed in 1991, the local collective farm in Shehyni closed down, throwing the whole village out of work. The few remaining jobs were at the local school, health clinic, hotels, restaurant and stores, and at the border checkpoint.

The villagers quickly started to exploit the border trade as an additional source of income, playing on the price differences for cigarettes and vodka in Ukraine and Poland.

Once across the border, the value of a pack of Ukrainian-made cigarettes of well-known brands almost triples. Immediately after crossing, Ukrainians hawk their products to the Polish customers at an informal market.

Lyubov Patsan, a pensioner from Shehyni in her mid-50s, is one of perhaps hundreds of locals who is active in this shady cross-border trade.

“I’m doing business – two packs (of cigarettes) and half a liter (of vodka),” says Patsan, naming the maximum amount of cigarettes and alcohol a person can take across the border per day.

Any more than that, and a person may be forbidden entry to Poland, adds the head of the village council, Ihor Kryveiko.

Patsan says it takes up to three-and-a-half hours to cross the border by foot with her goods. If she sticks within the permitted amounts of products, she can make up to Hr 100 ($4) a day. However, some traders risk taking more, hoping the border guards won’t be too thorough in their checks. Another way is to hide larger amounts in a car, as only about one in 20 vehicles are searched.

Every day, a crowd of illegal traders stand in lines to cross the border.

“Go and try it – you could have your ribs broken (in the crush of people) there,” Hanna, an elderly retiree, said.
Another illegal trader, she doesn’t want to give her full name. She has just returned from the pedestrian border crossing, carrying a plastic bag filled with pasta from Biedronk, a Polish supermarket.

Hanna gets a monthly pension of Hr 1,200 ($48), and the illegal trade gives her much needed additional income. Every pack of cigarettes she buys for Hr 15 (60 cents) in Ukraine, she sells for around 6.5 zloty (Hr 45, or $1.80) in Poland.

“Life is so good that we just want to die,” she said sarcastically about the life in her village.

And it’s not just pensioners who are in on the trade: teachers, store workers, and other people with regular jobs are also “doing business.”

Kryveiko won’t say exactly how many villagers are involved in illegal trading, only that there are “a lot of them.” Besides the locals in Shehyni, which sits practically on the border, people from other villages in the area arrive at the checkpoint by bus each day to take cheap goods into Poland.

No visa needed

Villagers who live in the 30-kilometer-wide border zone don’t need a visa to get into Poland. Around 300,000 people now have permits to cross the border without a visa after Ukraine struck the deal on local border traffic with Poland in 2009.

The bilateral agreement allows locals to travel 30 kilometers into the territory of Poland for “cultural interchange and regional cooperation,” according to the Ministry of Foreign Affairs. But that rule could easily be flouted, as the border service doesn’t check if people stay within the zone.

The agreement is supposed to work the same for both countries, but Ukrainians benefit the most, as Poles already have the right to spend up to 90 days in Ukraine without a visa.

In July, Poland suspended its local border traffic with Ukraine and Russia as a security measure while it hosted the NATO Summit in Warsaw and the World Youth Days in Krakow, which was attended by Pope Francis. Although local border traffic with Ukraine resumed in August, the suspension triggered a protest rally by local citizens with border permits, who blocked off the roads leading to the border checkpoint.

Local border traffic between Poland and Russia remains suspended for security reasons.

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Border opportunities

The border gives the villagers other opportunities to make money besides selling cigarettes and vodka.

Once across the border and having sold their goods, a villager may be picked up by a trader transporting Polish products to Ukraine, Kryveiko said. Such traders look for people to share the car ride as, according to customs rules, the maximum amount of goods for personal usage cannot exceed 50 kilograms per person or be worth more than €500. With an additional person in a car, a trader can avoid paying customs duty, while the villager gets Hr 50-70 ($2-3) for the ride.

Some 100 meters from the checkpoint an old, white, Soviet-era Volga car is parked with 10-kilogram plastic tubs of honey on its hood. A ragged cardboard sign reads “Honey. Hr 50”

But that’s not the price of the honey – it’s how much a person will be paid for taking a tub of honey across the border and delivering it to a honey trader in Poland.

Locals make money from the illegal trade in Poland, but they spend money there as well. According to Polish Main Statistical Office, Ukrainians who crossed into the local border zone spent around $180 million in the first quarter of 2016.

Locals buy cars in Poland, where they are cheaper, and don’t bother to re-register them with the Ukrainian authorities. Registering a car in Poland costs half the amount it does in Ukraine, and as long as the car owner crosses the border at least once every five days, they can keep their Polish plates.

Kryveiko points to a line of cars with the European Union license plates: “They are all from our village.”

Border guards’ burden

The crowds crossing from into Poland and back every day complicates the work of customs and border officers. Lines frequently build up, sometimes with 300-400 cars waiting at the vehicle checkpoint, and dozens of people at the pedestrian crossing point.

Levko Prokipchuk, the ex-head of Lviv customs, who is temporarily serving as a head of Ivano-Frankivsk Oblast customs, said that around 60-70 percent of the people crossing the border into Poland are Ukrainian citizens with local border traffic permits. He said that after Poland temporarily suspended the special border-crossing regime in July, the lines reduced significantly.

“We have a situation in which the salary they (the residents of the 30-kilometer border zone) can earn officially… is smaller than the amount of money they can earn by trading across the border,” Prokipchuk said.
Since the beginning of 2016, Lviv customs has seized around 200,000 packs of cigarettes from smugglers, Prokipchuk said.

According to him, bringing the price of cigarettes in Ukraine to the same level as in Poland would greatly reduce the problems. Prokipchuk also advocates reducing the amount of goods a Ukrainian is allowed to carry across the border. Today it’s 50 kilograms per day.

“Once we resolve these two questions, the local border traffic won’t play any role,” he said.
Obstacles to business

The lines on the border also disrupt the business of European companies that have chosen to work in Lviv Oblast specifically for its location close to EU territory.

Maryana Lutsyshyn, the head of the western Ukrainian branch of the European Business Association, said that a person may have to wait for eight hours to cross the border. This is a big obstruction for businesspeople who work with companies on both sides of the border, and who cross the frontier regularly.

Lutsyshyn also noted that the lines at the border controls vanished after Poland’s temporary suspension of the local border traffic regime, but appeared again when Poland lifted the restriction.

The business community is meeting with the customs authorities, the border service and local administrations to try to resolve the problems. Lutsyshyn said setting up separate lines for people with permits as a potential solution to the issue of overcrowding at the border.

“We need to find common ground, which would allow investors to work, and let them (local border traders) earn a living,” she said.