Simplification of trade procedures in Ukraine 2021: Customs procedures, appeals, digital products

TRADE FACILITATION IN UKRAINE :
TOPIC 2: CUSTOMS PROCEDURES, APPEALS, DIGITAL PRODUCTS
according to the results of the VI wave of the annual survey of
Ukrainian exporters and importers
Kyiv 2021
Project "Support of the Civil Society Initiative
"For Fair and Transparent Customs"

ABOUT THE PROJECT
The overall goal of the project is to increase the capacity of civil society to participate in economic policy
development in Ukraine.
Expected results:
(1) strengthening the capacity and effectiveness of the initiative;
(2) intensification of political dialogue between civil society and the state on the implementation of customs
reform
Project implementation period : 36 months, from January 1, 2020.
With the financial support of the European Union, the International Renaissance Foundation and the ATLAS Network (USA).
2
The initiative is an informal network of
CSOs from different regions of Ukraine that
care about improving the business climate.
25 members as of October 2021
The activities of the initiative are aimed at
monitoring the implementation of customs reform
and promoting dialogue on the implementation of
institutional reform of customs in accordance with
the principles of good governance and the
principles of free trade.
The public initiative was created in 2018 in the
process of implementing the Trade Facilitation
Dialogue project, which was implemented by the
IER with the support of the EU and the
Renaissance Foundation.
Trade Facilitation in Ukraine 2021: Customs Procedures, Appeals, Digital Products

Annual survey of Ukrainian exporters and importers: the
basis of advocacy and analytical work of the Initiative
The IER has developed and has been implementing since 2015 a special national tool for “Trade
Facilitation Monitoring” policy monitoring and evaluation.
It is a tool for measuring progress in facilitating and simplifying international trade and customs
procedures, based on the assessments of the direct participants in the policy implementation
process - business representatives.
The monitoring is based on the results of the annual survey of 1000 enterprises of exporters /
importers throughout Ukraine.
There were 6 annual surveys: 2015, 2016, 2017, 2018, 2020, 2021
3

6th Annual Survey: Topics
How the business assesses
the activities of customs
authorities and the
implementation of reforms
in the customs sector
What are the
quantitative and
qualitative estimates of
the cost and duration of
foreign trade procedures
How business assesses
different customs
procedures
Using the NCTS system
and obtaining the
status of the AEO
Customs clearance
through the "single
window" and using
digital products
Why are cargoes
delayed during customs
control
Is it easy for companies
to appeal the actions of
customs authorities
What are the obstacles
for importers and
exporters
How the Association
Agreement affected
business activities
Where do companies
get information; the
role of business
associations
What's with the
corruption at customs
What do businesses
think about
"smuggling" and "gray
imports"
4

Sampling: what are the surveyed companies
6
• 1000+ surveyed representatives of enterprises
engaged in export and / or import
• Business of all sizes was surveyed: from micro-
enterprises to large enterprises. The majority
were micro and small enterprises
• Most of the respondents are representatives of
industry and trade
24,4%
40,8%
34,8%
25,2%
42,6%
32,1%
0%
25%
50%
Only exporting
enterprises
Only importing
enterprises
Exporting and
importing enterprises
Enterprises by foreign trade
2020 2021
42,3%
28,0%
21,4%
8,2%
46,6%
31,3%
14,9%
7,2%
0%
25%
50%
Micro Small Medium Large
Enterprises by size
2020 2021
6,6%
46,3% 42,5%
4,6%
3,7%
38,0%
43,6%
14,7%
0%
25%
50%
Agriculture Industry Trade Services
Enerprises by sector
2020 2021

DIFFICULTIES IN CUSTOMS CLEARANCE PROCEDURES
7

Customs procedures: assessment by exporters and importers
8
• Exporting and importing companies reported what customs procedures they go through and what
difficulties they face when going through these procedures
• Specifically, exporters assessed the following
procedures:
• While importers assessed these procedures:
Advance customs clearance
Material and commodity sampling
Receiving certificates of origin for goods at
the customs
Customs inspection of goods
Post-customs audit
Advance customs clearance
Deciding on classification of goods
Deciding on customs value of goods
Material and commodity sampling
Provision of certificates of origin for goods at customs
clearance
Customs inspection of goods
Post-customs audit

Customs procedures and difficulties: exports
9
• Customs inspection is the most common procedure for exporters, although it should only be carried out
on certain grounds. The next most common procedures are obtaining certificates of origin and
preliminary customs clearance
• Difficulties with each procedure were experienced by 11% to 15% of exporters who underwent these
procedures.
44,7%
32,2%
56,8%
72,6%
17,2%
11,2% 11,8% 14,9% 12,4% 13,1%
0%
50%
100%
Advance customs clearance Material and commodity
sampling
Obtaining certificates of
origin for goods at the
customs
Customs inspection of goods Post-customs audit
Shares of the enterprises that went through procedures during exports and faced difficulties during
these procedures
Went through this procedure Faced difficulties during this procedure (among those that went through it)

Customs procedures and difficulties: imports
10
• The most common procedures for importers are customs inspection and provision of certificates of
origin for goods. Next in prevalence are decisions on the customs value of goods and advance customs
clearance
• The procedures of deciding on the customs value of goods and deciding on the classification of goods
cause the most difficulties for importers.
69,4% 64,6% 69,3%
34,8%
74,9%
86,0%
22,1%
9,2%
38,1%
57,2%
24,0% 18,8% 17,9% 21,1%
0%
50%
100%
Advance customs
clearance
Deciding on
classification of
goods
Deciding on customs
value of goods
Material and
commodity sampling
Provision of
certificates of origin
for goods at customs
clearance
Customs inspection
of goods
Post-customs audit
Shares of the enterprises that went through procedures during imports and faced difficulties during
these procedures
Went through this procedure Faced difficulties during this procedure (among those that went through it)

Advance customs clearance:
difficulties from the point of view of exporters
11
• The biggest problem at the
stage of preliminary customs
clearance, according to
exporters, is the significant
duration of this procedure.
• The next most important
problems are technical
problems, in particular with
computer processing of
documents and the
complexity of this procedure
3,6%
35,7%
35,7%
35,7%
46,4%
46,4%
53,6%
0% 20% 40% 60%
Other
Inconsistencies between Ukrainian and
foreign documents
Corruption
Difficulties with pre-classification of goods
Procedure complexity
Technical issues, including computer
processing of documents
Significant duration of the procedure
From the point of view of exporters

Advance customs clearance:
difficulties from the point of view of importers
12
• The two main problems for
importers in advance customs
clearance are the inconsistency
of Ukrainian and foreign
documents and the considerable
duration of this procedure.
• Importers more often than
exporters point to
inconsistencies between
Ukrainian and foreign
documents, while the problem
of significant duration of
advance is important for both
exporters and importers.
6,7%
24,4%
28,9%
35,6%
37,8%
57,8%
60,0%
0% 20% 40% 60%
Other
Corruption
Technical issues, including computer
processing of documents
Difficulties with pre-classification of goods
Inconsistencies between Ukrainian and
foreign documents
From the point of view of importers

Decisions on the classification of goods:
13
• The most common
problem from the
point of view of
importers is the
unreasonable
identification of a
product code with
a higher duty rate.
• The requirement
of customs to
provide a large
number of
additional
documents is on
the second place
among the
problems with this
procedure
2,2%
20,3%
33,0%
35,2%
38,5%
39,0%
42,9%
47,8%
57,7%
57,7%
62,1%
74,2%
0% 20% 40% 60% 80%
Other
Corruption
Lack of access to a single database of classification solutions
Drawing up a report on violation of customs rules when increasing the
duty rate
Failure to take into account the basic rules of Ukrainian CN FEA
interpretation
Significant duration of procedure
Requirements to provide internal documents
Impossibility to predict the HS code in advance
Refusal of customs authorities to recognize the declared HS code
Unequal classification of the same goods imported by different importers
Requirements to provide a large number of additional documents
Unreasonable determination of HS code with a higher duty rate

Deciding on customs valuation:
14
• More than 70% of
importers report
unreasonable
increases in the
customs value of
goods and the
refusal of
customs to
recognize the
contract price of
goods
• More than 60%
report non-
transparent
customs
valuation of
goods and
requirements to
provide many
documents
2,0%
15,2%
20,6%
26,0%
41,9%
49,7%
50,0%
51,7%
55,7%
55,7%
57,1%
64,5%
67,2%
75,0%
77,0%
0% 20% 40% 60% 80%
Other
Inclusion of payments not performed by the enterprise
Corruption
Failure to take into account exchange rates and other market factors
Requirements to provide internal documents
Ignoring discounts for enterprises
Lack of access to the customs database
Manual control when making decisions about the customs value
Determination of the price by the price of identical goods
Failure to predict the customs value in advance
Requirements to provide a large number of additional documents
Nontransparent determination of the customs value
Customs refusal to recognize the contract price of the imported goods
Unreasonable increase of the customs value

Material and commodity sampling:
15
• The main difficulties from
the point of view of
exporters are the
considerable duration and
complexity of this
procedure
• Exporters report these
problems more often than
importers
• The unreasonable carrying
out of the material and
commodity sampling
procedure occupies the
third place among the
problems for exporters
4,8%
4,8%
14,3%
19,0%
19,0%
23,8%
42,9%
61,9%
71,4%
0% 20% 40% 60% 80%
Other
Violation of seals, which leads to problems with the
contractor
Use of laboratory test results for which it is
impossible to decide on the HS code
Different approach to the same legal requirements
by customs
Corruption
Carrying out laboratory tests of samples without
appropriate methods or equipment
Unreasonable carrying out of material and
commodity sampling procedure
Complexity of material and commodity sampling
procedure
Significant duration of material and commodity
sampling procedure

Material and commodity sampling:
16
• The main problem for
importers is the
considerable duration of
the material and
commodity sampling
procedure
• In the second and third
places are unreasonable
carrying out of this
procedure and a different
approach to the same
legal requirements by
customs
• Importers report the
different approach to
legislation by the customs
more often than exporters
13,3%
10,0%
13,3%
15,0%
28,3%
38,3%
41,7%
51,7%
56,7%
0% 20% 40% 60%
Other
Use of laboratory test results for which it is
impossible to decide on the HS code
Corruption
Violation of seals, which leads to problems with the
contractor
Carrying out laboratory tests of samples without
appropriate methods or equipment
Complexity of material and commodity sampling
procedure
Different approach to the same legal requirements
by customs
Unreasonable carrying out of material and
commodity sampling procedure
Significant duration of material and commodity
sampling procedure

Obtaining certificates of origin for goods at the customs:
17
• The main problem pointed out
by exporters is the
requirement to provide many
additional documents
• The problem of the
considerable duration of this
procedure is on the 2nd place
8,3%
22,9%
41,7%
43,8%
54,2%
75,0%
0% 20% 40% 60% 80%
Other
Corruption
Nontransparent decision-making
Requirements to provide a large number of

Provision of certificates of origin for goods at customs clearance:
18
• Importers often report a
problem such as customs
requirements to provide many
• Half of importers report
manual management when
deciding on certificates of
origin
• In third place among the
problems - the opacity of
decision-making in this
procedure
10,6%
11,7%
17,0%
35,1%
37,2%
38,3%
44,7%
51,1%
59,6%
0% 20% 40% 60% 80%
Other
Carrying out (as part of post-audit) of review of
the facts of certificate acceptance
Corruption
Unlawful refusals to accept the certificate of
origin
Manual control when making decisions on
certificates of origin
Requirements to provide a large number of

Customs inspection:
19
• The considerable
duration of the
customs inspection
ranks first among
the problems with
this procedure from
the point of view of
exporters
• The second place is
shared by such
problems as
unequal approach
to inspection of
identical goods by
different
enterprises and
unjustified customs
inspection
4,2%
20,8%
25,0%
29,2%
33,3%
39,6%
41,7%
47,9%
54,2%
54,2%
64,6%
0% 20% 40% 60% 80%
Other
Imposing unreasonable fines or other punitive measures
Corruption
Multiple customs inspections of one foreign trade operation
Initiating an inspection by law enforcement or regulatory
authorities
Damage to packaging of goods, deterioration of appearance
Unjustified customs inspection
Different approach to inspection of the same goods imported by
different importers

Customs inspection:
20
• The long duration of
the customs
inspection is the main
problem for importers
• The problem of
unfounded customs
inspection is on the
second place
• The third and fourth
places are occupied by
non-transparent
decision-making and
damage to the
packaging of goods
and deterioration of
their appearance
10,6%
13,3%
15,9%
21,2%
23,9%
31,9%
35,4%
40,7%
41,6%
44,2%
53,1%
0% 20% 40% 60% 80%
Other
Imposing unreasonable fines or other punitive measures
Initiating an inspection by law enforcement or regulatory
authorities
Multiple customs inspections of one foreign trade operation
Corruption
Different approach to inspection of the same goods imported by
different importers
Damage to packaging of goods, deterioration of appearance
Unjustified customs inspection

Post-customs audit:
21
• The complexity and duration of
the post-audit procedure are the
main problems for exporters
• Exporters report these problems
more often than importers
• The third place is occupied by the
unreasonable increase in the
customs value of goods at the
stage of post-customs audit
30,8%
30,8%
38,5%
46,2%
61,5%
61,5%
0% 20% 40% 60% 80%
Different approach to the same legal
requirements by customs officers and
auditors
Corruption
Change of HS code if the customs declaration
already issued
Unreasonable increase of the customs value
at the audit stage
Significant duration of the audit procedure
Audit procedure complexity

Post-customs audit:
22
• The main problem with post-
customs audit for importers is
the different approach to the
same legal requirements by
customs officers and auditors
• For exporters, this problem is in
the last place in the ranking and
is reported by almost half as
many exporters
• The second most important
problem for importers is changes
of the product code when the
declaration has been already
issued
17,9%
14,3%
28,6%
39,3%
39,3%
53,6%
57,1%
0% 20% 40% 60% 80%
Other
Corruption
Audit procedure complexity
Significant duration of the audit procedure
Unreasonable increase of the customs value at
the audit stage
Change of HS code if the customs declaration
already issued
Different approach to the same legal
requirements by customs officers and auditors

DELAYS OF CARGO DURING CUSTOMS CONTROL
23

Delays of cargoes during customs control
24
• Almost 2/3 of exporters did not face cargo delays
compared to less than half of importers
• Medium business suffers the least at the border
• Agriculture has the least delays in imports, and
industry has the least in exports
59,6% 62,40%
45,2% 42,00%
0%
20%
40%
60%
80%
2020 2021 2020 2021
When exporting When importing
Share of enterprises without delays, by FEA
type, %
58,6% 63,9% 60,0% 62,1%
55,6%
44,5% 40,9% 38,8%
0%
20%
40%
60%
80%
Share of enterprises without delays, by sector,
%
58,0% 58,9%
74,6%
62,3%
42,5% 41,8% 45,7%
33,3%
0%
20%
40%
60%
80%
Share of enterprises without delays, by size, %

Reasons for cargo delays during customs control
25
7,3%
10,2%
11,2%
12,6%
13,1%
13,6%
15,0%
19,4%
19,9%
67,5%
0% 20% 40% 60% 80%
Another option
Change in the customs commodity cost
Scanning, weighing of vehicles
Carrying out customs inspection at
border crossing points
Lack of all necessary documents
Corruption
Lack of customs infrastructure,
equipment and software
Notes to documents
Lack of inspectors
Queues at the border
At export, % of respondents with delays
7,2%
8,8%
9,3%
10,9%
13,5%
19,8%
20,7%
21,6%
46,3%
57,9%
0% 20% 40% 60% 80%
Lack of customs infrastructure,
equipment and software
Scanning, weighing of vehicles
IPR control
Lack of all necessary documents
Corruption
Carrying out customs inspection at
border crossing points
Notes to documents
Lack of inspectors
Change in the customs commodity
cost
Queues at the border
At import, % of respondents with delays

Is it worth giving in to customs so that the goods do not stand idle?
26
• 56.5% of respondents agreed with
this statement. This is more than in
2020 (41%)
• This suggests that lengthy and
complicated customs procedures
create an opportunity for corruption
and violations of the law.
• More than a third of respondents
(38.3%) do not agree with this
statement (in 2020 - 48.2%)
Business representatives were asked whether they agreed with the statement that in order to avoid
downtime of goods, it is better to agree with illegal or excessive, in their opinion, customs
requirements, than to challenge them legally.
10,8%
48,2%
41,0%
5,3%
38,3%
56,5%
0% 10% 20% 30% 40% 50% 60%
Don't know / Hard to say
Disagree
Agree
Response to the statement, %
2021 2020

(2)
27
• Only importers and importing and exporting
companies more often than only exporters agree
with this statement
• Therefore, importers may be more vulnerable to
the threat of downtime due to illegal or excessive
customs requirements.
• Micro and small enterprises are more likely than
medium and large enterprises to agree with this
statement
46,5% 47,2%
6,3%
59,4%
35,7%
4,9%
60,4%
34,7%
5,0%
0%
40%
80%
Agree Disagree Don't know / Hard to
say
Response to the statement by type of foreign trade, %
Exporters only Importers only Both exporters and importers
60,2%
33,8%
6,0%
56,7%
39,1%
4,2%
45,6%
48,3%
6,0%
51,4%
45,8%
2,8%
0%
40%
80%
say
Response to the statement by size, %
54,1%
40,5%
5,4%
51,6% 43,5%
5,0%
61,7%
33,3%
5,0%
54,1%
39,2%
6,8%
0%
40%
80%
say
Response to the statement by sector, %

(3)
28
• The enterprises that carry out
customs clearance at the Northern
and Odessa customs offices agree
with this statement most often
• Most rarely, those who carry out
customs clearance at the Zakarpattia
customs office
• The Zakarpattia customs office also
recorded the largest share of
respondents who could not answer
this question (10.3%)
• At Bukovyna customs office, all
respondents answered this
question
Answers of enterprises at the Azov and Skhidna
customs are not taken into account in the analysis
due to insufficient number of respondents
44,8%
51,1%
52,9%
54,5%
54,9%
57,0%
57,1%
57,7%
59,5%
61,9%
67,1%
68,2%
44,8%
42,9%
41,2%
40,9%
40,2%
38,4%
37,0%
38,5%
37,8%
38,1%
28,6%
27,3%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Zakarpattia
Halytska
Podilska
Chornomorska
Dniprovska
Slobozhanska
Kyiv
Poliska
Volyn
Bukovynska
Odesa
Pivnichna
Response to the statement
that it is better to agree with illegal or excessive customs
requirements than to challenge them legally, by customs office, %
Agree Disagree Don't know / Hard to say

APPEALS AGAINST THE ACTIONS OF CUSTOMS AUTHORITIES
29

Do businesses know about the customs appeal and do they
have such an experience?
30
• 59.1% of respondents are familiar with the possibility
and procedure of administrative and judicial appeals
against the actions of customs authorities (53.5% in
2020)
• 17.8% of respondents had the experience of appealing
(18% in 2020)
• Exporting and importing businesses, as well as large
enterprises, are better acquainted with the possibility
of appeal and more often have such experience.
52,8% 59,9% 63,2%
6,3%
20,0% 23,8%
0%
20%
40%
60%
80%
Exporters only Importers only Engaged in exporting
and importing
Awareness and experience by type of FEA, %
Familiar with the appeal procedure Have experience of appeal
75,7%
58,4% 59,7% 55,4%
16,2% 16,2% 20,0% 15,5%
0%
20%
40%
60%
80%
Awareness and experience of appeals by sector, %
53,3%
65,4% 61,7% 68,1%
12,9% 17,6%
24,8%
33,3%
0%
20%
40%
60%
80%
Awareness and experience by enterprise size, %

Awareness of appeals and experience with customs
31
• Respondents at the Dnipro
Customs Office are best
acquainted with the possibility
and procedure of administrative
or judicial appeal against
customs actions, and the worst
at the Chornomorska Customs
Office.
• The enterprises of the
Dniprovska Customs Office most
often had the experience of such
an appeal, the least – at the
Pivnichna Customs Office
Answers of enterprises at the Azov and Skhidna
Customs Offices are not taken into account in the
analysis due to insufficient number of respondents
22,7%
9,1%
28,6%
13,5%
14,9%
21,4%
20,7%
13,5%
26,9%
23,5%
16,3%
31,4%
40,9%
45,5%
47,6%
55,6%
56,8%
58,6%
58,6%
59,5%
61,5%
61,8%
62,8%
72,5%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Chornomorska
Pivnichna
Bukovynska
Halytska
Kyiv
Odesa
Zakarpattia
Volyn
Polissia
Podillia
Slobozhanska
Dnipro

Success of business appeals against customs actions
32
• Appeals against customs actions were
partially or completely successful for 78.8%
of enterprises that had such experience.
This is less than in 2020 (87.8%)
• Only 55.3% of companies that challenged
the actions of customs authorities indicated
that they were guaranteed the right to be
heard (51.1% in 2020)
• Only 32.4% of enterprises that had
experience in customs appeals consider the
response of the customs authority to the
complaint justified (36.2% in 2020)
Note: Another option, in particular, may include
complaints that are still pending
5,5%
20,4%
38,3%
35,8%
5,4%
14,9%
35,1%
44,7%
4,4%
20,1%
31,4%
44,0%
0,5%
11,7%
31,9%
55,9%
2,8%
18,4%
30,2%
48,6%
0% 10% 20% 30% 40% 50% 60%
Don’t know / Another option
Was not successful
Was partially successful
Was completely successful
Evaluation of the success of administrative or judicial appeals against
the actions of customs authorities, % of enterprises with such
experience
2021 2020 2018 2017 2016

Economic expediency of customs appeal (1)
33
• 32.7% of enterprises reported that they did not
appeal against the actions of the customs
authorities due to economic inexpediency (due
to simple transport, legal aid costs, etc.),
although they considered the decisions and / or
actions of the customs illegal (29.7% in 2020)
• This is mainly reported by importers, large
enterprises and trade companies
13,7%
36,2% 33,2%
15,0%
38,5% 39,0%
0%
20%
40%
60%
Exporters only Importers only Both exporter and
importers
Didn’t appeal against the actions of customs
authorities due to economic inexpediency, by type, %
2020 2021
17,4%
22,9%
38,7%
31,3%
27,0% 26,4%
38,3%
33,8%
0%
20%
40%
60%
authorities due to economic inexpediency, by sector, %
2020 2021
32,6% 30,7%
23,2% 27,9%
32,0% 34,3%
27,5%
41,7%
0%
20%
40%
60%
authorities due to economic inexpediency, by
enterprise size, %
2020 2021

34
• Most often, the actions of customs
authorities were not appealed due to
economic inexpediency at Polissia and
Dnipro Сustoms Offices
• Rarely – at Bukovyna, Pivnichna and
Chornomorska Сustoms Offices
The answers of the enterprises at the Azov and
Skhidna customs are not taken into account in the
analysis due to insufficient filling of subsamples
16,7%
20,6%
11,6%
16,7%
21,4%
30,0%
23,7%
31,6%
24,4%
34,1%
41,7%
41,2%
23,8%
27,3%
27,3%
27,6%
29,4%
30,1%
32,4%
32,6%
33,7%
34,3%
40,2%
50,0%
0% 10% 20% 30% 40% 50% 60%
Bukovyna
Pivnichna
Chornomorska
Zakarpattia
Podillia
Halytska
Volyn
Kyiv
Slobozhanska
Odesa
Dnipro
Polissia
Didn’t appeal against the actions of customs authorities due to
economic inexpediency, by customs, %
2021 2020

35
• Cases of economic inexpediency of
customs appeal are most often
reported by enterprises of Poltava and
Odesa regions
• The least reported are in Donetsk,
Ternopil and Sumy regions
• In nine regions, the share of enterprises
that did not challenge the actions of
customs authorities due to economic
inexpediency is a third or more of the
respondents
Answers of the enterprises of the Luhansk and
Mykolaiv areas are not considered in the analysis
because of insufficient filling of subsamples
9,5%
20,0%
20,8%
22,2%
23,3%
24,7%
25,9%
25,9%
29,6%
30,4%
31,6%
31,6%
32,0%
32,0%
35,0%
35,2%
38,2%
38,7%
41,7%
42,1%
45,0%
45,7%
45,8%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Donetska
Ternopil
Sumy
Zakarpattia
Vinnytsia
Lviv
Zhytomyr
Cherkasy
Volyn
City of Kyiv
Kirovohrad
Kherson
Ivano-Frankivsk
Chernihiv
Chernivtsi
Kharkiv
Kyiv
Dnipropetrovsk
Rivne
Zaporizhzhia
Khmelnytskyi
Odesa
Poltava

What needs to be improved in an administrative appeal?
36
• The validity of decisions, and ensure
impartial, complete and fair
consideration of the complaint need to
improve the most
• The ranking of desired changes has not
changed compared to 2020
• Only about 10% of respondents believe
that none of the aspects of the appeal
needs to be improved
• SMEs more often than large enterprises
point to the need for open complaints
and improved validity of decisions (the
same in 2020)
• Large enterprises are more likely to
express the need for rapid and clear
release of goods for free circulation (the
same in 2020)
2,0%
9,2%
42,2%
49,5%
53,4%
61,4%
64,4%
3,3%
11,4%
43,5%
54,9%
56,0%
62,9%
66,0%
0% 20% 40% 60% 80%
Another option
None of these circumstances require
improvement
Ensuring a quick and clear order of release of
goods into free circulation
Effectiveness of complaint consideration system in
electronic form
Openness of complaint consideration (opportunity
to participate in the complaint consideration)
Ensuring impartial, complete and fair complaint
consideration
Validity of decisions of the customs authority
based on the results of the complaint
consideration
Elements of administrative appeal requiring improvement, %
of respondents
2021 2020

INNOVATION AT CUSTOMS: SINGLE WINDOW
37

Experience of passing customs through the "single window"
38
• In 2021, 18.7% of surveyed companies reported
that they passed customs control through a
"single window"
• The majority of respondents (72.2%) work
through customs brokers or could not answer
this question. This is more than in previous waves
of the survey
• Excluding these respondents, the share of
enterprises that used the "single window" is
67.1%, which is much less than required by law
18,7%
9,1%
72,2%
Experience of passing customs control measures
through the "one-stop window", %
Have experience of passing customs through the “one-stop window”
Don't have experience of passing customs through the “one-stop window”
Work with customs brokers / don't know / hard to answer
54,0% 50,0%
69,0% 70,0% 72,2%
0%
50%
100%
2016 2017 2018 2020 2021
Respondents who work with customs brockers or
did not answer the question about the “one-stop
window”, %
2016 2017 2018 2020 2021

Experience of passing customs through the "single window" (2)
39
• Exporters and importers often report that they have
experience of passing customs procedures through a
"single window"
• The larger the size of enterprises, the more they use
the "single window": the share of enterprises
operating through customs brokers decreases
Note: The "Other" option combines the answers "We work
through customs brokers", "I don't know" and “Hard to answer"
15,0% 11,8%
73,2%
13,5% 7,2%
79,3%
28,5%
9,6%
61,9%
0%
50%
100%
Have experience Don't have experience Other options
Experience by foreign trade, %
13,1% 7,3%
79,6%
16,0% 11,9%
72,1%
28,2%
10,1%
61,7%
47,2%
8,3%
44,4%
0%
50%
100%
Experience by size, %
24,3%
8,1%
67,6%
20,9% 10,2%
68,8%
16,6%
7,3%
76,1%
17,6% 12,2%
70,3%
0%
50%
100%
Experience by sector, %

Experience of passing customs through the "single window" (3)
40
• Enterprises at the Chornomorska,
Slobozhanska and Bukovynska
customs offices often report that they
have experience of passing customs
procedures through the “single
window“
• Enterprises at the Volyn customs
office are the least likely to report
such an experience. There is the
largest share of respondents who
work through customs brokers or
could not answer here (86.5%)
• At Poliska, Pivnichna and Odesa
customs, businesses often report that
they do not have such experience
Answers of enterprises at the Azov and
Skhidna customs are not analyzed due to
insufficient number of respondents
10,8%
14,4%
17,2%
18,0%
18,6%
20,6%
22,5%
22,7%
23,1%
28,6%
30,2%
36,4%
2,7%
9,8%
10,3%
8,3%
12,9%
8,8%
4,9%
13,6%
19,2%
4,8%
11,6%
86,5%
75,8%
72,4%
73,7%
68,6%
70,6%
72,5%
63,6%
57,7%
66,7%
58,1%
63,6%
0% 20% 40% 60% 80% 100%
Volyn
Kyiv
Zakarpattia
Halytska
Odesa
Podilska
Dniprovska
Pivnichna
Poliska
Bukovynska
Slobozhanska
Chornomorska
Experience of passing customs control measures through the
"one-stop window" by customs office, %

INNOVATION AT CUSTOMS:
NCTS (new computerized transit system)
41

Awareness about the NCTS
42
• National application of the NCTS in Ukraine began in March
2021
• Only 1.6% of respondents know what the new computerized
transit system (NCTS) is
• The majority (85%) do not know about it and another 13.4%
know it only by name
• The share of the respondents who know well about NCTS is
very small among enterprises of different sizes, sectors and
types of foreign trade
• Against the background of others, only large enterprises and
enterprises with import and export differ. Their
representatives know about NCTS by name more often than
others
• This indicates possible gaps in communication regarding this
possibility
• This may also be related to working through customs
brokers. Representatives of the companies not working with
brokers are more likely to know NCTS well or by name (27.3%
compared to 13.5% of the representatives of those working
with brokers)
18,7%
9,1%
72,2%
Awareness about the NCTS, %
Know well or well enough
Know only by name
Don't know what NCTS is / Hard to say

Plans about using the NCTS
43
• No company whose representatives are
well aware of the NCTS used this system at
the time of the survey
• Most companies (43.8%) planned to use the
NCTS after it started operating
internationally
• About a third of enterprises (31.3%)
planned to start using NCTS in the near
future
• Equal proportions of respondents (12.5%
each) indicated that they do not plan to use
the NCTS and did not answer this question.
The analysis of the responses was conducted on a
small sample (N = 16) of the respondents who stated
that they know well or fairly well about the NCTS
31,3%
43,8%
12,5%
12,5%
Plans about using the NCTS, %
Plan to start using NCTS in the near future, when it is still
working nationally
They plan to use NCTS only when it works internationally
Do not plan to use this system

Advantages of the NCTS
44
• Respondents who are well or fairly familiar with the NCTS often name its almost every benefit. The
main advantage is the ability to travel to different countries with one transit document and a financial
guarantee
• The least important advantage of the NCTS is the reduction of the cost of customs procedures (33.3%)
The analysis of the responses was conducted on a small sample (N = 16) of the respondents who stated that they know well or fairly well about the NCTS
33,3%
60,0%
66,7%
66,7%
66,7%
80,0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Cheaper customs procedures
Reducing the pressure of customs authorities on business
Simplification of customs procedures
Better traceability of goods
Reducing corruption at customs
Ability to travel to different countries with one transit document and a
financial guarantee
Advantages of the NCTS according to the respondents who know about it well or fairly well, %

Disadvantages of the NCTS
45
• Respondents who are well or fairly familiar with the NCTS often cite the need for a financial
guarantee for all NCTS transit movements as a major disadvantage of the NCTS.
• The smallest share of the businesses worry about the adaptation to the new rules. And
approximately one in four respondents believes that there are no shortcomings in the NCTS
The analysis of the responses was conducted on a small sample (N = 16) of the respondents who stated that they know well or fairly well about the NCTS
28,6%
14,3%
14,3%
28,6%
35,7%
57,1%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
There are no shortcomings in the NCTS
Other disadvantages
Businesses will find it difficult to adapt to the new rules
Significant monetary expenditures of enterprises
Need for additional documents
Need for a financial guarantee for all transit movements under the
NCTS
Disadvantages of the NCTS according to the respondents who know about it well or fairly well, %

What information about the NCTS is lacking
46
• Respondents who know the
NCTS well or only by name are
often interested in when it
will be implemented and
what its benefits are for their
companies.
• The third place among the
issue on which there is a lack
of information is occupied by
the question whether the
NCTS will require additional
investment for businesses
• Almost a third of the
respondents indicated that
they have enough
information about NCTS
32,6%
0,7%
33,3%
37,7%
38,4%
39,9%
40,6%
46,4%
48,6%
50,0%
0% 20% 40% 60%
Respondents have enough information about the
NCTS
Other information
What will change regarding the provision of
financial guarantees
How customs procedures will change with the
transition to this system
Whether their company will be able to use the
system
What are the requirements for companies that
want to use this system
How a company can join the system
Whether it will require additional investment, staff
expansion etc.
What benefits the company will obtain from this
system
When this system will be implemented in Ukraine
What information about the NCTS businesses lack, %

INNOVATION AT CUSTOMS:
AEO (Authorized Economic Operator)
47

Awareness about the AEO status
48
• More than 80% of respondents
do not know what the status of
the Authorized Economic
Operator (AEO) is
• Only 6.8% know well or well
enough what it is
• Every tenth respondent (10.6%)
knows about it only by name
• This indicates probable gaps in
communication regarding the
AEO, despite the fact that at the
time of the survey the enterprises
already had the opportunity to
register as AEOs
6,8%
10,6%
82,4%
0,2%
Awareness about the AEO, %
Know well or well enough Know only by name
Do not know what an AEO is Didn't answer / Hard to say

Awareness about the АЕО (2)
49
• Representatives of exporting and importing
companies know about the AEOs best
• Representatives of large enterprises know about
AEOs three times more often than respondents
from medium-sized businesses, and ten times more
often than representatives of micro-enterprises.
• Among the representatives of enterprises of
different sectors, AEO is the least known in the
trade sector
3,5% 5,5%
90,9%
4,4% 8,4%
87,2%
12,4% 17,6%
70,0%
0%
50%
100%
Know well or well
enough
Know only by name Don't know or hard to
say
Awareness about the AEO by foreign trade, %
3,0% 7,3%
89,7%
4,8% 9,0%
86,2%
11,4% 16,1%
72,5%
30,6% 29,2%
40,3%
0%
50%
100%
Know well or well
enough
say
Awareness about the AEO by size, %
10,8% 18,9%
70,3%
7,9%
12,0%
80,1%
4,3% 8,4%
87,2%
10,1% 11,5%
78,4%
0%
50%
100%
Know well or well
enough
say
Awareness about the AEO by sector, %

Awareness about the AEO by region
50
• Respondents in Ivano-Frankivsk
and Volyn oblasts are best
informed about the AEO status
• Every tenth respondent in
Ternopil, Vinnytsia and Donetsk
oblasts is well aware of AEO
• None of the respondents in
Cherkasy and Sumy oblasts
indicated that they knew well
about AEO
• The largest share of respondents
who do not know about AEO at all
is in Rivne oblasts (91.7%)
Answers of the respondents in Luhansk and
Mykolayiv oblasts are not analyzed due to
insufficient number of respondents
3,7%
4,0%
4,2%
4,9%
5,0%
5,0%
5,3%
5,3%
5,3%
5,5%
6,5%
6,5%
6,6%
7,4%
8,0%
8,3%
9,5%
10,0%
10,0%
11,1%
12,0%
11,1%
20,8%
11,1%
16,0%
8,3%
9,8%
5,0%
10,0%
5,3%
10,5%
15,8%
10,5%
6,5%
7,8%
13,2%
22,2%
5,3%
4,8%
10,0%
25,0%
14,8%
12,0%
88,9%
79,2%
85,2%
80,0%
87,5%
85,3%
90,0%
85,0%
89,5%
84,2%
78,9%
84,0%
87,0%
85,7%
80,2%
70,4%
86,7%
91,7%
85,7%
80,0%
65,0%
74,1%
76,0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Cherkasy
Sumy
Zhytomyr
Chernihiv
Poltava
Kyiv oblast
Chernivtsi
Khmelnytsky
Kirovohrad
Kherson
Zaporizhzhya
Kyiv city
Odesa
Lviv
Kharkiv
Zakarpattia
Dnipropetrovsk
Rivne
Donetsk
Vinnytsia
Ternopil
Volyn
Ivano-Frankivsk
Awareness about the AEO by region, %
Know well or well enough Know only by name Don't know or hard to say

Desire to obtain the AEO status
51
• More than half of the companies whose
representatives know well about the AEO
would like to receive this status
• Almost 3% (2 companies) are in the process
of obtaining it and 3 companies claim to have
this status, despite the fact that they are not
in the AEOs register
• Almost 15% said they would like to receive
this status, but do not meet the
requirements
• One in five companies (20.6%) would not like
to receive AEO status
• The main reason why they do not want to
receive AEO status is because they do not
think they need it.
• Other frequently mentioned reasons are the
expectations that the financial costs of
obtaining the AEO status may exceed its
benefits, this will require the disclosure of
confidential information about the company
and the AEO status will not simplify customs
procedures.
4,4%
2,9%
52,9%
14,7%
20,6%
4,4%
Desire to obtain the AEO status, %
The company already has the AEO status
The company is in the process of obtaining the AEO status
The company would like to obtain the AEO status
The company would like to obtain the AEO status, but does not meet the requirements
The company would not like to obtain the AEO status

Advantages of the AEO
52
• Respondents who know about the AEO well or fairly well often mention the following three main
advantages: recognition of the AEO status of a Ukrainian enterprise by other countries in the future,
reduction of the volume of documents required for customs procedures, and reduction of waiting time
at the border (70, 1% of respondents)
• Approximately one in ten respondents (10.4%) believes that there are no advantages in the status of AEO
10,4%
1,5%
46,3%
49,3%
59,7%
70,1%
70,1%
70,1%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
There are no advantages in the AEO status
Other advantages
Reducing corruption at customs
Reducing the pressure of customs authorities on business
Greater predictability of customs procedures
Reducing waiting times at the border
Reducing the volume of documents for customs procedures
Recognition of Ukrainian AEO status by other countries in the future
Advantages of the AEO according to the respondents who know about it well or fairly well, %

Potential problems with obtaining the status of the AEO
53
• Respondents who are well or fairly familiar with the AEO often believe that possible problems with
obtaining AEO status may arise due to the complicated procedure for obtaining this status (55.6%)
• About a third of respondents (31.7%) report a lack of information about obtaining the AEO status
• 17.5% of respondents do not expect problems with obtaining the AEO status
17,5%
6,3%
20,6%
27,0%
31,7%
55,6%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Do not expect problems with obtaining the AEO status
Other problems
Significant financial costs for obtaining this status
It will be difficult for companies to meet the requirements
Lack of necessary information about obtaining the AEO status
The complicated procedure for obtaining this status
Potential problems with obtaining the AEO status according to the respondents who know
about it well or fairly well, %

What information about the AEO is lacking
54
• Respondents who know
about AEO well or only by
name most often report
that they have enough
information about it (43%)
• The information that is
often lacking is:
• when the AEO will be
introduced in Ukraine
• how an enterprise can
obtain this status
• whether it will require
the acquisition of AEO
status from investment
enterprises, staff expansion,
etc.
43,0%
0,6%
24,2%
30,9%
32,7%
32,7%
33,9%
37,0%
38,2%
40,0%
0% 10% 20% 30% 40% 50%
The information about the AEO is enough
Other information
What the AEO status gives for the company
How customs procedures will change for enterprises
with the AEO status
Whether their company meets the criteria for this
status
What are the requirements for companies to obtain the
status of AEO
What benefits will the company receive from the AEO
status
Whether this will require investment, staff expansion
etc.
How a company can obtain this status
When the AEO will be introduced in Ukraine
What information about the AEO the responsents lack, %

INNOVATION AT THE CUSTOMS:
DIGITAL PRODUCTS
55

Awareness of digital products and their use
56
• Most respondents know about the
Single Window for International
Trade web portal (42%)
• Fewer respondents (37.1%) know
about personal cabinet on this
portal
• However, only every tenth
respondent uses this portal without
authorization (9.7%) and with
authorization (10.5%)
• QD Pro and MD Declaration
platforms are the only digital
products that more respondents
know and use than just know
• The smallest share of the
respondents use and know about
the Business Intelligence module
0,3%
0,6%
1,2%
1,2%
1,3%
67,2%
73,3%
64,5%
61,7%
56,7%
24,5%
20,4%
14,1%
26,5%
32,3%
8,1%
5,8%
20,2%
10,5%
9,7%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Online map of the infrastructure of customs
facilities on the website of the State Customs
Service
Business Intelligence (foreign trade statistics
on the website of the State Customs Service)
QD Pro or MD Declaration platforms
Personal cabinet at the "Single Window for
International Trade" on the website of the
State Customs Service (with authorization)
"Single Window for International Trade" on
the website of the State Customs Service
(without authorization)
Awareness of and use of digital products,%
Know and use Know but don't use Don't know about them Hard to say

Awareness about the “Single Window” and personal cabinet
57
• Representatives of exporting and importing
enterprises and agricultural enterprises know best
about the “Single Window” website as well as about
the personal cabinet function on this website
• Awareness about the “Single Window” website and
the cabinet there increases along with the size of
the enterprises
Respondents who know about these digital products include both
their users and those who know about them but do not use
33,5% 27,6%
38,2% 33,6%
53,9% 49,2%
0%
50%
100%
Know about the "Single Window"
website
Know about the personal cabinet
on this website
Awareness about the "Single Window" website and
personal cabinet there by type of foreign trade, %
34,0% 28,0%
44,9% 38,8%
49,7% 51,7%
66,7% 58,3%
0%
50%
100%
website
on this website
personal cabinet there by size, %
54,1% 45,9%
42,1% 39,0%
39,9% 34,2%
45,3% 38,5%
0%
50%
100%
website
on this website
personal cabinet there by sector, %

Conclusions (1)
59
Difficulties in customs clearance procedures
• Businesses rarely report difficulties with customs procedures, with the exception of some procedures.
• Importers face difficulties in customs procedures more often than exporters.
• Classification of goods and deciding on their customs value are the most problematic customs procedures
for the surveyed enterprises.
• Exporters often point to the complexity and length of procedures, as well as the requirements to provide
many documents and the unreasonableness of some procedures (customs inspection, post-audit)
• Importers most often report unreasonable assignment of customs codes with higher duty rates and price
increases, refusal to recognize the contract price of goods, different approaches to the same legislation and
the same goods, unreasonable procedures and their long duration.
Delays of cargoes during customs control
• Almost 2/3 of exporters did not face cargo delays compared to less than half of importers.
• Queues at the border remain the main reason for delays in exports and imports.

Conclusions (2)
60
Appeal against the actions of customs authorities
• The success of business appeals against customs actions has deteriorated compared to 2020, when the share
of companies with fully or partially successful appeal experience was the largest in 4 waves of the survey since
2016.
• The level of awareness about the appeal procedure remains low: only half of the respondents are familiar with
it. Only one in five respondents has the experience of appealing.
• The most needed steps are improvement of the validity of decisions and ensuring impartial, complete and fair
consideration of the complaints.
NCTS, AEO and digital products at customs
• Less than 2% of respondents are well aware of the new common transit system (NCTS) and less than 14% are
familiar with it by name. Most companies plan to use the NCTS once it is available internationally, and about a
third, in the near future.
• The main advantage of the NCTS, according to respondents, is the ability to travel to different countries with
one transit document and a financial guarantee. The main disadvantage is the need to obtain this guarantee.
• Less than 7% of respondents know well what an AEO is, and 10.6% are familiar with it only by name.
• The main advantages of the AEO are international recognition of this status, fewer documents and less waiting
time at the border. The main potential problem is the complicated procedure for obtaining this status.

THANK YOU FOR YOUR ATTENTION!
61
QUESTIONS?

CONTACTS
Project "Support of the Civil Society Initiative "For Fair and Transparent Customs"
implemented by the Institute for Economic Research and Policy Consulting
with financial support of
the European Union, the International Renaissance Foundation and Atlas Network
website: www.tfd.ier.com.ua
e-mail: customs@ier.kyiv.ua
Facebook: www.facebook.com/tfd.ier
62

Simplification of trade procedures in Ukraine 2021: Customs procedures, appeals, digital products

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