Individual Corruption

The Ukrainian customs system has somewhat improved in recent years. Nevertheless, customs administration continues to be considered as prone to corruption by citizens, and a substantial part of the households surveyed in Transparency International's Global Corruption Barometer 2010 reports to have paid a bribe to tax authorities in 2009. Thus, many Ukrainians find that dealing with customs often entails corruption. For example, the public opinion survey MSI & KIIS Corruption in Ukraine 2007 reveals that customs administration is perceived to be among the most corruption-prone government services. Similarly, instances of individuals smuggling goods and paying off customs officials are common.

Business Corruption

The customs administration is identified by the US Department of State 2011 as an institution of much concern to companies operating in Ukraine. Reportedly, it is common for businesspeople to be asked for bribes by customs officials when crossing the country's borders. Furthermore, companies have identified improper customs valuation procedures, such as customs officers substantially overvaluing goods and thereby raising the customs duties owed, as a major obstacle to doing business in Ukraine.

Similarly, according to the EBRD & World Bank BEEPS Ukraine 2008, bribery in relation to customs is not uncommon in Ukraine and, in addition, more than one-third of the surveyed companies identify customs and trade regulations as a constraint to business operations in the country. In addition, the World Economic Forum Global Enabling Trade Report 2010 points out that time-consuming bureaucracy related to trade across borders opens the way for public officials to demand bribes in Ukraine. For example, trade is impeded by customs procedures that lack efficiency, and exporting and importing require time-consuming paperwork to clear goods at the border. Corruption and bribery in these processes are not uncommon.

According to Global Integrity 2009 customs and excise laws are seldom enforced uniformly or without discrimination in practice, and some groups are likely to evade customs and excise laws due to their connections. In general, companies face problems with the customs administration and perceive it to be highly corrupt. Customs officers are frequently offered and frequently demand bribes.

Imported goods are subject to clearance by numerous state bodies and companies can experience unjustified delays and other barriers created by customs officers during customs procedures. When these are experienced, companies can report customs officers to the customs administration by using special 'Stop-Cards' designed and issued by the customs administration for this purpose. Customs officers who receive these 'Stop-Cards' will then be investigated by internal control units.

Political Corruption

The government introduced an anti-smuggling programme to prevent the payment of bribes to avoid customs duties and import taxes in April 2005. The programme has been reinforced by security forces and continues today. The punishment for demanding or receiving a bribe is instant dismissal. Also in 2005, the customs administration conducted approximately 100 internal investigations based on reports of corruption. About 200 customs officers were subsequently dismissed for abuse of office. Furthermore, several high-ranking customs officials were dismissed by the former President Yushchenko in 2007 on corruption charges.

In June 2010, the former head of the Customs Service was detained as a suspect in a criminal case related to damages caused in connection with the seizure of 11 billion cubic metres of gas by former government from the gas intermediary RosUkrEnergo in 2009, as reported by the US Department of State 2010.

Frequency

The World Bank & IFC: Doing Business 2012:
- A standard import shipment of goods requires 6 documents and takes 30 days at a cost of USD 1,865 per container.

- A standard export shipment of goods requires 8 documents and takes 33 days at a cost of USD 2,155 per container.

Transparency International: Global Corruption Barometer 2010:
- 23.4% of households who had contact with customs throughout 2009 report to have paid a bribe.

World Economic Forum: The Global Enabling Trade Report 2010:
- Business executives give the efficiency of customs procedures (formalities regulating the entry and exit of merchandise) in Ukraine a score of 3 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

- Business executives give the transparency of border administration (pervasiveness of undocumented extra payments or bribes connected with imports and exports) a score of 3.1 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

EBRD & World Bank: BEEPS Ukraine 2008:
- 13% of the companies surveyed report that bribery frequently takes place in customs.

- 36% of the companies surveyed reported that customs regulations represent an obstacle to doing business in Ukraine.

The World Bank & IFC: Enterprise Surveys 2008:
- 24.5% of the companies surveyed identified customs regulations as a major constraint.

- More than 2.5% of companies surveyed expect to give gifts to get an import licence.

MSI & KIIS: Corruption in Ukraine 2007:
- 36% of the citizens who stated that they had been extorted or had paid a bribe voluntarily during the preceding 12 months said that this had happened when dealing with customs officials.

- 42% of the respondents saw the customs administration as a widely corrupt institution.