“Stolichnyi Express” # 3/2010
Are Power and Business integrated? Or in the Thoughts…
The Field Meeting of the Public Council under the State Customs Service of Ukraine, the first one in this year, was held in Odessa in the last month of summer. During the Meeting considered were the issues of creating working groups for electronic declaration, the “Electronic Customs” program, registration of foreign economic activity subjects with the customs and adjustment of goods physical inspection by customs and other regulatory authorities at the checkpoints; discussed were Draft Resolution of CMU “On Measures Providing for the Public Participation in Formation and Implementation of State Policy” and the issue of implementing the agreement between the Ukrainian National Committee of the International Chamber of Commerce and the All-Chinese Committee Trade Facilitation; and presentation of the of the of the Public Council under SCSU website pilot version took place, etc. Instead of an hour and a half designated by regulations the representatives of the Customs Service and business were discussing the pressing issues for almost two and a half hours. Besides the Members of the Public Council under SCSU, the meeting was attended by the leaders and representatives of SCSU, Pivdenna Customs, Ukrainian National Committee of the International Chamber of Commerce, JSC PLASKE, YUZHNYI CSP, UKRVNESHTRANS and control bodies.
Electronic Customs is a Difficult and Painful Process
The advantage of electronic declaration is obvious. This can be seen by the example of our neighbours. In EU the entrepreneurs do not directly communicate with the officials and all declaration and clearance procedures are effected through information networks.
Just one enterprise, JSC PLASKE, has similar experience in Ukraine today as it has taken part in the experiment on electronic declaration during cargo combined shipping across the territory of Ukraine from Georgia to EU. The positive aspects of the electronic declaration system include significant time and operating costs savings, an important factor of excluding “human factor” (in most cases) from the customs clearance process and, consequently, a reduction in corruption. In general, it is very difficult to underestimate the Electronic Customs introduction in full.
To date, the EU and Customs Union rely mainly on the electronic form of information exchange, and thus, if in the near future Ukraine will not transfer to electronic declaration; it will not allow to fully realize the geographical advantages of Ukraine as a transit state. Besides, these inexorably approaching external circumstances may force many Ukrainian international traders to face the problem of the foreign economic activity discontinuation.
In light of these developments situation is such today that the achievements claimed by SCSU in the sphere of information technologies introduction do not affect in any way the nature of relationship between the customs authorities and, in particular, the declarants. At the moment, such situation does not suit those trading community representatives who seek to keep pace with the times and do not want to lose hopelessly to foreign colleagues. Therefore, the Public Council at SCSU believe that as the time to change the situation is not irrevocably lost, a procedure common actions aimed at addressing the obvious and hidden problems should be worked out. The problems in the Electronic Customs project implementation and establishment of a working group for electronic declaration have become the major issues of the Field Meeting of the Public Council in Odessa.
Oleg Platonov, Chairman of the Public Council under SCSU, before discussing the issue proposed that the Meeting participants should look through two materials – the animated presentation of Lithuanian Customs on the principle of Single Window and a video about the results of the pilot project on interaction between UAIS of SCSU and NCTS during exercising the cargo combined carriage from Georgia through Ukraine and the Republic of Belarus to EU. The presentation in an accessible form introduced the problems of the information exchange between the foreign economic traders and government agencies that were topical for Lithuania a few years ago.
It should be noted that as shown in the Lithuanian presentation the problems faced by our Lithuanian colleagues are relevant for Ukraine today. The value of that show is primarily determined by the fact that it shows an effective way to overcome the problem, i.e. putting into the information exchange practice the Single Window principle. The plot about the pilot project outcomes was built in the form of a survey of the drivers, who directly participated in the cargo shipping, concerning the features of crossing the borders of the neighbouring states on different sections of the route. Its relevance stems from the fact that the pilot project has shown an example of a real electronic declaration mechanism with all its benefits.
According to Oleg Platonov, “In fact, this experiment has confirmed that such item as corruption may drop to zero, if the human factor is eliminated and the risk management system is working. Actually the transport vehicles that participated in the experiment crossed the two borders in 19 hours having departed from the Port of Illyichevsk and arrived at the border of Belarus - Lithuania, while in the current mode it can take from five to seven days. Debates about the electronic declaration introduction being an urgent requirement has long been going on at the level of the Public Council. But unfortunately not in the form, in which the electronic declaration is working now – only at the level of preliminary documents, i.e. full-fledged electronic declaration is absent.”
It was decided at the Meeting of the Public Council to establish a working group and this initiative of Oleg Platonov, Chairman of the Board, was supported by fifteen representatives of transport organizations. It was also decided to send a letter to President of SCSU to inform about the Public Council’s support of the initiatives already made in this direction and of the Council's proposals aimed at addressing the problems with other government agencies in order to accelerate the process of transition to full application of the Single Window principle in the sense which is given to it in the UN Recommendations # 33, # 34 and #35.
Also, the Public Council Members decided to establish a working group for foreign economic activity subject’s registration by the customs. The group included 10 representatives of the Council. Such a measure was adopted on the initiative of the Customs Statistics Department in connection with the need to streamline the accreditation cards filling in.
Dialogue between the Authorities and the Public
The President and Government of Ukraine need full mutual connection with entrepreneurs and public organizations. On Hrushevskoho Street the Cabinet of Ministers is interested in issuance of a new resolution to replace the old ones # 1378 and # 1302 or propose a bill on regulation of the public and authorities relationship. This topic was also raised at the Meeting of the Public Council at SCSU. Oleg Platonov invited all participants of the Meeting to get acquainted with the draft resolution of the government posted on the website of the Ministry of Justice for them to be able to prepare a letter and make suggestions.
“We are now interested in that in the context of the fact that the annual meeting will be held in December and the government is planning to adopt this document in October,” Oleg Platonov, Chairman of the Public Council at SCSU, noted. “So everybody is requested to read all the information carefully, make proposals and get ready for the meeting in December. Let us hope that the government will ask the heads of executive authorities to be consistent, and we will have a real connection. For example, at the last but one Meeting of SCSU College all the comments made at the Meetings of the Public Council were included in the action program of SCSU in the form of activities whose deadline were determined. Some of them have already been implemented and some are being finalized. After the last Meeting of the Public Council we have sent 11 letters to the governance of other central bodies of executive power on the issues requiring the help of the Public Councils and the Council of Entrepreneurs at the Cabinet of Ministers.”
The issue regarding the ordering of goods physical inspection by customs and other regulatory authorities at checkpoints at the state border of Ukraine has become perhaps the most “hot” at the Meeting. The latest version of SCSU Order # 771 gave rise to most criticism of the Council. According to transport workers, it the major issues remain unaddressed: replacement of a driver, replacement of the tractor driver and the driver’s obligation to deliver the goods to the Customs Office of destination within a certain period.
Dmitriy Sergienko, representative of AIRCU to the Regional Council of Carriers of Odessa and Nikolayev regions, commented on this issue as follows: “This Procedure is established for the crossing checkpoints at the border, but in the port when transporting a container it is not a process as the driver is not present where the documents are issued and he cannot undertake the obligation. We want the driver to sign, but there was the decision on signing a separate sheet, and again the Draft Order stipulates that the signature is required on the reverse side of the previous document. When the previous document is printed out the driver is not there. How should the vehicle be brought into the port? We have been discussing this issue for several years and yet again this Order contains no changes. And this interferes with the normal development of technologies in the ports.”
Oleg Platonov, Chairman of the SCSU Public Council paid his attention to the following fact: “We still have an even older problem and that is Article 63 of the Customs Code of Ukraine. Specifically, who will cover the incurred costs? Unfortunately, we have not got a clear answer until this time, but the Pivdenna Customs in response to our appeal at the level of the Pivdenna Customs Public Council has developed the appropriate Draft Order. We have got acquainted with the said Draft Order, and although not everything in it is as we would like it to be, but, nevertheless, some progress is already seen. The Customs Service There is making some efforts to solve these issues, and today we would like, in order to finish up this topic, yet to resolve specific contradictions faced by the subjects of foreign economic activity just during being processed at checkpoints. CMU have adopted many resolutions imputing to observe the Customs Code, but they do not say how to observe it. There is a good Order “On Time Limits at Checkpoints”, but, unfortunately, it is not tracked and we do not dispose of the statistical data. Therefore we would like first: to support the Pivdenna Customs at this Meeting concerning the Draft Order it have prepared and, second: to confirm our readiness to consider the comments, which will be expressed.”
Viacheslav Voronoi, Head of Logistics and Commercial Work Section, Odessa Commercial Sea Port, noted in continuation of the discussion, “We have repeatedly submitted with the State Customs Service our proposals concerning changes in Order # 771. It is not enough that carrier suffers from that, the port suffers, too, because all this time, while changes are made concerning the transport vehicle (prolongation of delivery time, etc.), the vehicle is staying in the port. Actually the problem resolution is very simple: the authority to make decisions on alterations in DCD must be delegated to the Chief of the Customs Station. This whole procedure, as it was mentioned earlier, takes 10 days only because all issues are resolved through Chief of the Customs. The second issue concerns separate guarantee. This requirement should remain as we spent two years seeking its introduction for the delivery guarantee to be separately provided by the forwarder as the car is actually outside the checkpoint.”
Explaining the problem regarding the prolongation of the delivery time and replacement of the driver Andrey Artiomenko, Head of Goods Movement Control Section, Pivdenna Customs, noted that two parallel mechanisms are provided for by the standing version of Order # 771. The first one is making decision by Head of the Customs and attaching the official stamp to the DCD, which always takes some time. The second mechanism is making decision by Chief of the Customs Station. Andrey Artiomenko added that such powers have long been given to Head of the Station and all the questions may be solved in a few hours.
Unfortunately, according to the transport process participants, the second mechanism does not work here and the customs services should step-up its implementation control.
Besides, the transporters also expressed their grievances concerning the fact that the Customs amend the legislation by means of longhand. Besides, it was noted that Director of the Department completely changes the rules of clearance by an ordinary letter. For example, recently SCSU has distributed a letter regarding a hundred percent inspection of “toys” cargoes. And now all the containers with toys are completely examined and Inspection Report is made up and then sent to Kiev to SCSU, and the goods may not be cleared before all the authorities give their consent. At the moment the imported goods are subject to all kinds of control at any border checkpoint and then, on arrival at the Customs Office of destination they have to pass all types of control once more. The Members of the Public Council suggested to the representatives of the customs services to work out together such a mechanism, which will enable the Custom Office of destination on receiving the goods to clearly know which functions are left to be carried out after the customs at the border. In addition, the Members of the Public Council addressed SCSU with a request to initiate alterations to Order # 771 concerning the registration of the cases of tractor replacement and support the initiative of the Pivdenna Customs on customs inspection.
Despite the fact that the problems, which were rather lively discussed at the Meeting, concerned the various levels (both central and regional ones) it was obvious that the problem of physical examination was one of the most acute.
Goods from China are not a Problem
The opportunities and mechanisms for approval of export customs declaration on Chinese goods imported into Ukraine were consolidated by agreement between the UNK of International Chamber of Commerce and All-Chinese Committee for International Trade Promotion. That was communicated to the Meeting of the Council by Vladimir Schelkunov, President of the International Chamber of Commerce. He also noted that the said agreement, given the high state status of the All-Chinese Committee for International Trade Promotion, enables the support of major interstate projects concerning importation from PRC into Ukraine of industrial and unique equipment, Hi-Tech products, permanent large-tonnage industrial import flows, etc. At the same time, according to Vladimir Schelkunov, the use of the mechanisms of verifying export declarations for goods of PRC origin allows for rapid and comprehensive struggle against the attempts to reduce the customs value and unfair classification of goods. During the customs clearance of goods in Ukraine the said agreement enables significant improvement of the situation and even removal of the systemic problems during the clearance of goods of a large range of product groups, which are imported from China into Ukraine.
In conclusion of the Public Council Meeting a pilot version of the website was presented. At the moment, the Public Council of SCSU already has a domain name http://www.public-council.customs.gov.ua/, and the next step is to design a web page for the Public Council processes management. Currently a requirements specification has been developed that will be transferred to the Customs Service, which, in its turn, should decide who will finance the project.
As Pavel Pashko, Deputy Chairman of SCSU, noted, “The site is relevant when it carries the information and knowledge that if you write to the site, then someone will give you an answer, and, third, when it is administered. The site must be a forum, where live communication between business and government takes place.”
Without bilateral dialogue of the power and business these structures will not be able to work effectively, so such collective meetings and making decisions jointly with the public representatives will build an effective model of fruitful cooperation.
“Stolichnyi Express” # 3/2010