IMF introduced updates to structural beacons for Ukraine

The Memorandum with the International Monetary Fund (IMF) and a set of structural beacons under the Enhanced Financing Program (EFF) were recently updated. This is the fourth viewing of the program. In this updated Memorandum, a full-fledged customs reform has finally appeared – a complete reboot of the service with the participation of international experts. About this write ZN.ua.

By the end of October, Ukraine must amend the Customs Code to ensure a transparent leadership selection process with integrity checks and significant participation of experts with international experience. The changes will also include rules preventing the re-hiring of customs officers who have previously been dismissed from public service for ethical violations.

According to the Memorandum, the draft amendments to the Customs Code should simplify customs procedures, clarify the interpretation of customs debt, create a legal basis for the release of customs officers, including checking their integrity within the scope of periodic re-certification. It is also envisaged to create a disciplinary committee, implement the hiring of customs personnel on a contractual basis, ensure compliance with EU legislation and regulations, and strengthen the subordination and accountability of the State Customs Service to the Ministry of Finance.

Income of additional billions to the state budget

Economists’ calculations have shown that tax evasion schemes, which can be minimized by an updated high-quality customs office, lead to state budget losses of UAH 120-150 billion per year.

These schemes are conditionally divided into the following categories:

Misrepresentation (movement with concealment from customs control): customs fraud and corruption schemes, the feature of which is the “embeddedness” of customs officials in them, which creates an opportunity for manipulation of the data of reporting, permission and accompanying documents, which makes it possible to understate the customs value, weight, quantity , product characteristics and qualities, change product codes or subcategories to avoid/reduce customs payments.

Movement outside customs control (black smuggling): illegal movement of goods across the customs border outside of customs control. This involves crossing the border either outside the customs posts of both countries, or with illegal exemption from customs control at checkpoints across the state border of Ukraine, in particular outside the opening hours of checkpoints or without customs inspection for a certain fee.

Abuse of privileges: involves the abuse of privileges granted by international treaties and the legislation of Ukraine, in particular, disguising the importation of industrial consignments of goods into the customs territory of Ukraine under postal and courier shipments or personal importation or transportation of personal belongings. In particular, it is possible to single out such schemes as “jackets” (movement of goods in small batches within the limits of the permitted import norm), “diplomats” (abuse of diplomatic privileges regarding customs inspection), “postal smuggling” (use of international postal and express shipments to break up commercial batches and import of goods without any taxation).

Interrupted mode: the goods are imported into Ukraine (or exported from it) under customs regimes that do not involve the payment of customs payments (transit; temporary import or export; customs warehouse; processing in the customs territory or outside the customs territory), and disappear, or a fictitious export. The scheme has a dangerous “national modification” — interrupted export, when the company exports products, complying with the requirements of customs legislation, but is not registered as a taxpayer, in particular VAT. After carrying out an export operation, the company disappears without returning foreign exchange earnings to the country and without reporting to the tax authorities.