Ukraine Country Profile

Customs Administration

Individual Corruption

Many Ukrainians find that dealing with customs often entails corruption. Instances of individuals smuggling goods and paying off customs officials are common.

Business Corruption

According to Global Integrity 2009, customs and excise laws are not always enforced uniformly or without discrimination. In general, companies face problems with the customs administration and perceive customs administration to be highly corrupt. Customs officers are frequently offered and frequently demand bribes. According to the US Department of State 2009, cumbersome customs clearance procedures and related corruption constitute a disincentive to investment in Ukraine. According to the same source, companies report that customs officials frequently demand bribes or special 'fees' to expedite clearance. 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.

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.

Frequency

The World Bank & IFC: Doing Business 2010:
- A standard import shipment of goods requires 10 documents and takes 36 days at a cost of USD 1,430 per container.

- A standard export shipment of goods requires 6 documents and takes 31 days at a cost of USD 1,230 per container.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- 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').

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.

EBRD & World Bank: BEEPS Ukraine 2005:
- 11% of the companies surveyed report that bribery frequently takes place in customs.

- 29% of the companies surveyed reported that customs regulations represent a significant obstacle to doing business in Ukraine.