A Major Win for Ukraine: Bill 6490-D Passed to Overhaul Customs

? Oles Dmytrenko, 2024

Recently our Parliament passed Bill No. 6490-D on September 18, 2024, which was a big step forward in reforming our customs system. Since a lot of attention is paid to Ukraine's resilience and the coming U.S. elections, I decided to emphasize the importance of this event.

Yaroslav Zheleznyak, the First Deputy Head of the Verkhovna Rada Committee on Tax and Customs Policy, was one of the initiators, along with 18 other deputies. The law was supported by 260 members of Parliament.

WHY IT IS IMPORTANT

For decades, corruption in customs has been a nightmare for Ukrainians. Since 1991, our customs system was known to undervalue goods, accept bribes, and misuse power.

Smuggling has been a serious issue, too. It costs Ukraine $2-4 billion every year in lost revenue (GTInvest ).

One Western company, for example, complained how state services blocked their EU-certified goods but allowed the illegal import of the ones produced by their competitors! Unfair and unpredictable conditions like these have deterred many foreign investors and partners from working in Ukraine.

RESPONSE AND ACTIONS

Bill No. 6490-D is not the first initiative to deal with the corruption on the border.?

In 2005, as a result of democratic transformations (the Orange Revolution in 2004), the Special Control Department was appointed.

Following that, the National Anti-Corruption Bureau of Ukraine (NABU) was established after the Revolution of Dignity in 2013-2014 in Ukraine, alongside reforms in the State Fiscal Service, considering joint border checkpoints with EU countries.

To proceed with cleansing the customs system, in 2021, the National Security and Defense Council (RNBO) imposed personal sanctions on nearly 20 smugglers. More than 100 customs officers were dismissed, including 17 high-ranking officials.

However, the 2021 sanctions had no lasting effect, with most officials reinstated through courts, and no criminal charges brought against the targeted smugglers.

Besides, the Action Plan for reforming customs policies (Order No. 569-R of the Cabinet of Ministers of Ukraine ) was to be implemented from May 13, 2020, with progress reports submitted annually by December 20.

The 2020 directive (Order 569-R), involved re-certifying customs officers, enhancing data management, and aligning procedures with EU standards to improve transparency and efficiency.

These efforts laid the groundwork for further legislative actions, like the 2023 law criminalizing contraband and the broader customs reform launched in 2024.

WHAT WILL CHANGE

Starting January 2025, every customs officer will be re-certified, with international experts involved to ensure only qualified professionals remain.

The customs system will also align with EU standards, making processes faster and more transparent for businesses.

This law will strengthen Ukraine's economy by increasing state budget revenues, attracting foreign investment, and improving trade through customs reforms.

The reform is expected to bring in 100 billion UAH over the next few years. And this is only the beginning.

But more than that, Ukraine’s global image as a reliable business partner will improve. It is a clear signal to the IMF, World Bank, and our Western allies that, besides an “open dialogue” and public discussions, we take action to stop corruption and build a trustworthy customs system (Ukrinform ).

It’s a long-awaited change, and I’m glad to see it finally happening.

? Oles Dmytrenko, 2024

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