Progress Report 4

Support to the Integration of Ukraine in the Trans-European Transport Network TEN-T
4th Progress Report
this EU practice with significantly increased levels of scanning. Scanners should only be used as part
of a risk management system.
TIR is an established international customs transit Convention to which Ukraine is a signatory. The
advantages of the TIR system are expedited processing at the border crossings. Border transit should
take 15-20 minutes compared with 1 hour for non-TIR traffic. There are two main reasons why the TIR
system in Ukraine is not working to its optimum potential - restricted access; and breaking of seals.
The first problem arises because the access roads to the borders are in most cases too narrow to
provide segregation of freight traffic. In practice, there should be one lane for expedited clearance –
TIR and empty units and a standard lane for non-TIR imports, exports and transit. It is recommended
within the border crossing itself that separate lanes are designated for TIR and non-TIR traffic.
However, a more serious concern is the regular breaking of Customs seals on TIR traffic to and from
Ukraine in order to undertake physical examinations. This is a clear breach of the Convention, which
indicates that Customs can break the seal and examine the contents only when there is evidence of a
possible violation. It is recommended that Ukrainian Customs comply with its obligations under the TIR
Convention, to which it is a signatory, by eliminating the practice of systematic seal breaking as a
standard activity at its road border crossings.
The problems of the high number of documents required to undertake a clearance was highlighted in
Part 1, with Ukraine requiring 40% more export documents and double the number of import
documents compared to the average OECD country. This directly results in increased clearance times,
thus resulting in higher transaction costs on Ukrainian traffic. This appears to be much more of a
problem at the seaports than at the road and rail borders. A key difference between the EU and
Ukraine is the approach to Customs clearance. In most of the more advanced countries in the EU the
clearance can be undertaken on-line without the submission of most of this support documentation.
This is often undertaken prior to the physical arrival of the goods.
There are three aspects to moving towards integration of the system with that in the TEN-T countries.
The first is a reduction in the mandatory submission of support documents at the borders, be it a
road/rail crossing or at the ports. This can be achieved by a business processing exercise supported
by clear legislation. The second is increased application of electronic systems and from that the
acceptance of electronic documents and signatures. The current system in Ukraine is dependent of
the production of hard copy documents and original signatures. This significantly increases both the
size and the difficulty in putting together the clearance pack of documents. The third key issue on
documentation is consistency in the requirements. Modern Customs systems are based on the
concept of ‘informed compliance’. This means the importer or exporter is aware of the requirements
and is then compliant with them. Unlike the EU where details of what is required are widely available
over the internet and publications, in Ukraine the requirements are not clear, partly because the
legislation is not transparent and is in some cases conflicting.
There has been a significant increase in the use of IT at the borders. Unfortunately this has not
resulted in significant improvements in clearance times. There are a number of reasons for this
situation. The first reason is that there are manual and automated systems working in parallel. In
reality, the Ukrainian Customs system is a transaction recording system, rather than a Custom
processing system. Another problem is that it is not as yet a full on-line system, such as that of the
Border Guards. As a result some of the smaller borders, particular rail borders, are working in
isolation. It is not possible to operate an effective Customs IT system unless it is online to all locations.
Concepts such as risk management and other applications (such as valuation, classification etc) can
only be effective if it has nationwide coverage and thus consistency of approach is possible.
In recent years there has been significant progress towards the application of single stop processing in
Ukraine. However, the next step in line with EU integration would be progress towards a single
window system. In simple terms, single stop is about undertaking all the clearance activities at a single
location whereas with single window it is at a single position/desk. Ukraine has not really started the
transition to single window processing. It is recommended that Ukraine forms a Coordination
Committee on Single Window to commence progress towards developing such a single window
capability. This is seen as a gradual process where more parties can be added as the system
progresses.
One of the problems highlighted by importers was the difficulty in changing their points of clearance.
Importers have to register with a particular Customs office. This has the advantage in that a
relationship is formed between that Customs office and their client. Despite the obvious governance
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