Customs modernisation: prospects and challenges on the way to European standards

On 31 January, the NGO “Institute of Analytics and Advocacy” in cooperation with the NGO “Technologies of Progress” held an event ‘Customs Reform in the European Context: Achievements and Challenges”. The event became a platform for discussing the reform of Ukraine’s customs system in line with EU standards.

In the first part of the event, Policy and Data Analyst Vitaliy Nabok presented the interim results of the ACCORD project and highlighted aspects of cooperation with NGOs implementing initiatives at the regional level. Vitaliy also discussed the mechanisms of effective coordination between the State Customs Service, business and the public:

“Coordination can be seen as a continuous process of searching for several elements. First of all, it is a search for players or actors – those parties that have the desire and ability to influence the process of change. The next step is to identify problems, i.e. challenges that need to be addressed jointly. The third element is to define the goals of all participants in the process. The fourth element is to find common ground between different parties, which often have different interests and visions of the situation. Finally, the fifth element is to find solutions that are acceptable and effective for all parties involved. It is this structured approach that will allow for systematic work to establish coordination.

If the coordination mechanism works properly, new opportunities open up for each of the parties involved. For the State Customs Service, it is primarily the standardisation of processes and the improvement of the quality of control and information exchange. For businesses, the key benefits include taking feedback into account, a better understanding of customs requirements and procedures, as well as cost savings and faster operations. For the public, we see opportunities for public scrutiny, increased accessibility, and enhanced consumer protection.”

Robert Zeldy, Chief Customs Expert, presented another ACCORD project outcome – a system of KPIs (key performance indicators) for customs authorities to assess their performance:

“The right KPIs are not about ‘fulfilling the plan’, but about changing the very logic of customs work. From one-off figures to dynamic indicators. From fiscal pressure to a balance between control and trade. From closed bureaucracy to transparent and understandable metrics. From the number of inspections to the quality of their results.

What KPIs do we need to make customs work efficiently, transparently and effectively? We have divided all the key performance indicators of the customs into four broad categories that correspond to the dimensions of the WCO (World Customs Organisation) Performance Measurement Mechanism – fiscal area, trade facilitation, effectiveness of detecting offences and the importance of organisational resilience.”

Henrik Guitfeldt noted that Ukraine has made significant progress over the past year, and this was recognised by the European Commission. In particular, Title 29 ‘Customs Union’ was one of the 4 areas rated the highest in the European Commission’s Enlargement Report for Ukraine 2024.

The discussion of customs reform was joined by: 

• Henrik Gueitfeldt, Head of Public Finance, Business Support and Social Policy, EU Delegation to Ukraine; 
• Vladyslav Suvorov, Deputy Head of the State Customs Service of Ukraine,
• Oleksandr Kovalchuk, Member of Parliament of Ukraine, Deputy Head of the Parliamentary Committee on Finance, Taxation and Customs Policy;
• Yuriy Draganchuk, Deputy Minister of Finance of Ukraine for European Integration;
• Yaroslav Zheleznyak, Member of Parliament of Ukraine, First Deputy Chairman of the Parliamentary Committee on Finance, Taxation and Customs Policy;
• Vytautas Alinauskas, EU4PFM Key International Expert on Customs;
• Torben Heinemann, Manager of the Commission’s Facility ‘Strengthening Sustainable and Digital Trade Routes and Logistics Concepts;
• Andriy Savarets, customs expert at the ACCORD project.

The participants discussed, among other things, the implementation of Law of Ukraine No. 3977, which defines the specifics of service in the customs authorities and the certification of officials. The key topics of discussion included the establishment of KPIs for the customs service, the prospect of granting it the status of a law enforcement agency, salary increases, technical equipment of customs offices, as well as the introduction of modern IT solutions and the integration of an information exchange system with international partners.

Attention was also paid to Ukraine’s successful implementation of NCTS Phase 5 and the development of the Authorised Economic Operator (AEO) Institute. Today, 79 national companies have already received the AEO status, which demonstrates a high level of business interest in implementing new opportunities.

Vladyslav Suvorov, Deputy Head of the State Customs Service, stressed that customs reform is an important investment in the institution and an integral part of Ukraine’s European integration process.

He stressed that without the effective functioning of the customs service, Ukraine’s full integration into the European space is impossible. In order to become a reliable ‘eastern border of Europe’, it is necessary to meet the high standards that determine the conditions for economic activity and cooperation. The main measures to reform customs are set out in the National Revenue Strategy until 2030, a strategic document that defines the key areas of change. This document has already received high praise from the European Commission and the International Monetary Fund, which confirms its compliance with international requirements and European standards.

Following the discussion, the participants discussed the main vectors of further reforms that will facilitate Ukraine’s integration into the European customs area and the development of foreign economic activity, and stressed the importance of a constructive dialogue between the state, business and international partners. 

To watch the recording of the expert discussion, please follow the link. 

The event was prepared with the financial support of the European Union. Its content is the sole responsibility of the NGO ‘Institute for Analysis and Advocacy’ and NGO ‘Technologies of Progress’ and does not necessarily reflect the position of the European Union.