Problem

2.3.1. Insufficient transparency and effectiveness of customs authorities, excessive discretionary powers of customs officers

General information about the problem

The problems of effective, transparent, and predictable functioning of the customs authorities, digitalization and automation of their workflows, as well as the presence of corruption factors in the customs legislation attract broad attention from both the academic, expert (professional) community and practitioners. Taking into account the main publications in this field, it is safe to say that the activities of the State Customs Service fall short of its potential effectiveness. Therefore, there is a need to improve the effectiveness of this activity, taking into account the principles underlying the 2021-2025 Anticorruption Strategy.
Such improvement should take into account the need to address the following issues:
the existence of cases of unreasonable and unjustified use of the backup method of customs value determination by customs officers;
a large number of violations of intellectual property rights during the import of goods;
insufficient digitalization and automation of process of the customs authorities;
the need to improve the public control body at the State Customs Service.
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Implementation of SACP measures within the limits of the problem

The total number of OSR – 5
All measures of the SACP
measures, the implementation of which as of 30.09.2024
is about to begin to be completed
5 5 2 7
19
Implemented In progress Not implemented Not started
Measures implemented (fully and partially) - 5 (26.3%)

Deadlines for all measures

01.03.2023 - 31.12.2025

Implementation of SACP measures within the scope of the Problem by main main performers

State Customs Service of Ukraine

23.1%
13

Ministry of Finance of Ukraine

40%
5

National Agency on Corruption Prevention

0%
1

Achievement of ESR within the limits of the Problem

The total number of OSR – 5

SUMMARIZED GENERAL INFORMATION ON THE IMPLEMENTATION OF THE PROGRAM MEASURES IN TERMS OF DIRECTIONS, PROBLEMS AND EXPECTED STRATEGIC RESULTS

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№ Name of the ESR Name of the measure The main implementer Monitoring results (latest) Performance note % виконаних заходів (fully and partially)
1.1. ESR 2.3.1.1 Preconditions for possible corruption among customs officers have been eliminated by introducing a rule to the effect that backup methods of customs value appraisal can be applied exclusively within the framework of appellate procedures 2.3.1.1.1. Drafting and submitting to the Cabinet of Ministers of Ukraine a draft law proposing to amend the Customs Code of Ukraine, according to which the section on verifying the customs valuation has been aligned with EU Regulation No. 952/2013 dated October 9, 2013, the Agreement on the Implementation of Article VII of the GATT, and Article VII of the General Agreement on Tariffs and Trade of 1994 Ministry of Finance of Ukraine The measure was not implemented on time and in full Implemented
100% 3/ 3
1.2. 2.3.1.1.2. Developing a standard algorithm of actions for customs officials when verifying the correctness of customs valuation of goods at the stage of customs clearance and after its completion State Customs Service of Ukraine The measure has not been implemented Not implemented
1.3. 2.3.1.1.3. Arranging the education and training of customs officials in the methods of customs valuation of goods State Customs Service of Ukraine There is progress in the implementation of the measure In progress
2.1. ESR 2.3.1.2 Official importers (who have the exclusive right to import certain goods or a franchise granted by the manufacturer or official distributor of such goods) have the opportunity to appeal the decision of the customs authority to determine the customs value or classification of goods imported by entities that do not have the status of official importers 2.3.1.2.1. Drafting and submitting to the Cabinet of Ministers of Ukraine a draft law proposing to amend the Customs Code of Ukraine, which would: 1) stipulate that the opinion of the right holder is sufficient to confirm a violation of intellectual property rights and draw up a report on the violation of customs rules involving the transportation of goods across the customs border of Ukraine in a manner that violates intellectual property rights; 2) expand the application of measures towards greater protection of intellectual property rights to instances of detection of goods suspected of being in violation of intellectual property rights, which are moved across the border bypassing customs control, are concealed from customs control by way of avoiding declaration, etc.; 3) impose harsher administrative penalties for moving goods across the customs border of Ukraine in a manner that violates intellectual property rights; 4) add the right holder to the list of parties participating in case proceedings involving violations of customs rules under Article 476 of the Customs Code of Ukraine. Ministry of Finance of Ukraine The measure was not implemented on time and in full Implemented
100% 5/ 5
2.2. 2.3.1.2.2. Drafting an order on amendments to the Procedure for Applying Measures Towards Greater Protection of Intellectual Property Rights and Interaction of Customs Authorities with Right Holders, Declarants, and Other Stakeholders, approved by the order of the Ministry of Finance dated June 9, 2020, No. 281, and the Procedure for Registering Objects of Intellectual Property Rights Protected Under Law in the Customs Register, approved by the order of the Ministry of Finance dated May 30, 2021, No. 648, as amended by the order of the Ministry of Finance dated June 9, 2020, No. 282, according to which: 1) the specified normative legal acts have been aligned with the amendments to the Customs Code of Ukraine indicated in subclause 2.3.1.2.1; 2) the customs authority has the right to consult the right holder during the customs inspection of goods; 3) a procedure has been instituted for responding to recurrent cases where right holders—despite having confirmed the opinion of the customs authority that the goods are suspected of being in violation of intellectual property rights—refuse (do not intend to) apply the measures towards greater protection of intellectual property right with respect to such goods or resort to other remedies provided by law; 4) an exclusively electronic form of information exchange between the customs authorities and right holders has been introduced (submitting applications to the customs register of intellectual property rights, applying measures towards greater protection of intellectual property rights). Ministry of Finance of Ukraine Not started
2.3. 2.3.1.2.3. Holding a public discussion of the draft order indicated in subclause 2.3.1.2.2, and ensuring its revision (if needed), issuance, and submission for state registration Ministry of Finance of Ukraine Not started
2.4. 2.3.1.2.4. Supporting the state registration of the order indicated in subclause 2.3.1.2.2 and its official publication Ministry of Finance of Ukraine Not started
2.5. 2.3.1.2.5. Developing and putting into operation new software and IT complexes designed to: 1) ensure the traceability of actions involving the application of measures towards greater protection of intellectual property right on the part of both the customs authorities and the right holders; 2) accelerating interactions between the customs authorities and right holders by switching to information exchange in electronic form; 3) applying standardized approaches to documenting all actions and decisions involving the application of measures towards greater protection of intellectual property rights, expanding the list of information accumulated in the relevant software and IT complexes with a view to broadening the opportunities for analysis, reporting, and enhancing the risk management system; 4) creating additional sources of information to be used by the customs authorities while allying measures towards greater protection of intellectual property rights; 5) launching intelligent systems for analyzing the performance of the customs authorities in matters of fostering the protection of intellectual property rights and continued improvement of business processes. State Customs Service of Ukraine There is progress in the implementation of the measure In progress
3.1. ESR 2.3.1.3 Corruption risks have been minimized by establishing a body exercising public control over the day-to-day operations of the customs authorities, which will have the powers defined by law 2.3.1.3.1. Drafting and submitting to the Cabinet of Ministers of Ukraine a draft law proposing to: 1) define the status of the body of public control over the day-to-day operations of the State Customs Service; 2) define the requirements with respect to the creation of the body exercising public control over the day-to-day operations of the State Customs Service, which provide for a transparent competitive selection process utilizing a rating-based online voting by citizens residing in the territory of Ukraine for candidates chosen among NGOs, business associations, and experts; 3) specify the number of members of the body exercising public control over the day-to-day operations of the State Customs Service and stipulate that such members must not include representatives of government agencies and local self-government bodies or community representatives affiliated with them; 4) establish the powers of the body exercising public control over the day-to-day operations of the State Customs Service, in particular involvement in the assessment of corruption risks and implementation of anticorruption measures, drafting normative legal acts, monitoring the effectiveness of the exercise of the powers by the State Customs Service; 5) stipulate that the term of office of a member of the body exercising public control over the day-to-day operations of the State Customs Service shall be two years. National Agency on Corruption Prevention The measure has not been implemented Not implemented
0% 0/ 3
3.2. 2.3.1.3.2. Developing the draft Regulation on the body of public control over the day-to-day operations of the State Customs Service State Customs Service of Ukraine Not started
3.3. 2.3.1.3.3. Holding a public discussion of the draft Regulation indicated in subclause 2.3.1.3.2, and ensuring its revision (if needed) and approval State Customs Service of Ukraine Not started
4.1. ESR 2.3.1.4 Unjustified influence of subjective factors during customs clearance has been minimized through automation and digitalization 2.3.1.4.1. Developing the long-term national strategic plan of digital development, digital transformations, and digitization of the State Customs Service and its territorial divisions based on the EU multi-annual strategic plan for customs (MASP-C) State Customs Service of Ukraine The measure was implemented on time and in full Implemented
100% 2/ 2
4.2. 2.3.1.4.2. Implementing the activities of the long-term national strategic plan of digital development, digital transformations, and digitization of the State Customs Service and its territorial divisions based on MASP-C, which must be finalized during the effective term of the 2023-2025 State Anticorruption Program State Customs Service of Ukraine There is progress in the implementation of the measure In progress
5.1. ESR 2.3.1.5 When developing and implementing measures towards prevention of corruption in the customs authorities, effective cooperation with the public and business associations has been established, as well as regular monitoring of the work of the customs authorities through periodic surveys of entrepreneurs and customs officers 2.3.1.5.1. Conducting an assessment of corruption risks with the mandatory involvement of the public, particularly anticorruption NGOs and business associations State Customs Service of Ukraine The measure was implemented on time and in full Implemented
200% 12/ 6
5.2. 2.3.1.5.2. Drafting the anticorruption program of the State Customs Service with the mandatory involvement of the public, particularly anticorruption NGOs and business associations, and coordinating it with the public council State Customs Service of Ukraine The measure was implemented on time and in full Implemented
5.3. 2.3.1.5.3. Implementing the activities prescribed by the anticorruption program indicated in subclause 2.3.1.5.2, as well as other measures towards the prevention of corruption in the customs authorities, with the mandatory involvement of the public, particularly business associations and the public council at the State Customs Service State Customs Service of Ukraine There is progress in the implementation of the measure In progress
5.4. 2.3.1.5.4. Annual publication of information on the results of involvement of anticorruption NGOs and representatives of the business community State Customs Service of Ukraine There is no progress in the implementation of the measure In progress
5.5. 2.3.1.5.5. Annual independent anonymous survey of customs officials conducted by the public council at the State Customs Service on the performance of the customs authorities, the problematic aspects of their work, and ways to resolve the existing problems State Customs Service of Ukraine Implementation of the measure has not started Not started
5.6. 2.3.1.5.6. Annual survey of business community representatives conducted by business associations and the public council at the State Customs Service to explore the effectiveness of their cooperation with the customs authorities, the problems encountered during their interaction, and ways to resolve them State Customs Service of Ukraine Implementation of the measure has not started Not started

Key sources on the state of the problem:

1. НАЗК: Аналіз проблеми

Assessment of the situation by international monitoring mechanisms and organizations: