The country’s most corrupt customs services are in Volyn, Dnipropetrovsk, Lviv, Zaporizhzhia, Kyiv and Odesa oblasts, according to a study carried out by the Institute of Economic Research and Policy Consulting (IERPC), in cooperation with the European Union and the International Renaissance Foundation.
The study polled 1,018 entrepreneurs across the country engaged in foreign trade, between December 2017 and February 2018. The ranking was narrowly published in July 2018, and then presented to the Kyiv Post on Nov. 6. The next report will be published in March.
Oksana Kuziakiv, the executive director at IERPC, said her organization did another report that gives the percentage of respondents who believe it is necessary to have “friends” in the authorities to solve problems with customs.
According to the results of that report, 63 percent of respondents who use Volyn customs say one has to have personal connections with customs officers, while only 18 of those who use Zakarpattia customs say that this is necessary.
“Something illegal is happening in our country, because there can’t be (such differences between customs services) when the legislation is all the same,” said Kuziakiv.
Similar results were published by the Business Ombudsman Council in Ukraine. Geographically, the largest number of complaints were received from Kyiv, Dnipropetrovsk and Odesa regions customs as well, the council found.
However, fewer complaints came from Lviv, Volyn, Sumy, Mykolaiv and Zakarpattya oblast customs.
After analyzing 150 complaints received between May 2015 and July 2018, the council’s experts identified several problem issues for business with the customs authorities, such as: delays in, or refusal to grant customs clearance, not receiving reimbursement for overpaid customs duties and fees, as well as customs value determination.
“Usually, business people complain that customs officers work in not an entirely fair, predictable, transparent or honest way,” said Iaroslav Gregirchak, deputy business ombudsman. “This is confirmed by the many court decisions taken in favor of business.”
Intricate schemes
Ukraine loses around $4.8 billion per year from corruption at customs, according to the Anti-Corruption Action Centre, a Ukrainian civil society organization, German newspaper Süddeutsche Zeitung reported on Aug. 6.
That is 20 times more than state financing for science in Ukraine, or almost five times higher than public spending on procuring medicines in 2018.
The typical customs scheme involves goods in a shipment being declared as something else, lower in value or which is taxed at a lower rate.
The schemes are “helped” by other state bodies that are also actively engaged in the process: goods enter the country at a lower cost meaning that less taxes are paid to the budget.
According to Süddeutsche Zeitung, the rampant corruption at Ukraine’s customs is also the fault of the Border Guard Service, the General Prosecutor’s Office, and Ukraine’s SBU security service.
The newspaper said the SBU is paid at the end of each month for each container imported through corrupt schemes. “They all have their own companies and people there,” an informant in Odesa told Süddeutsche Zeitung.
Currently, there is no effective system for holding customs officers accountable for taking a bribe, the Business Ombudsman Council said in its report.
