Green Light for “Customs Visa-Free” — Ukraine Handed Over to the European Side the Necessary Instruments for Accession

Today, August 31, 2022, the Ukrainian side handed over to the European side the necessary instruments for joining the Common Transit Convention and the Convention on the simplification of formalities in trade in goods.

This was preceded by a targeted customs policy and consolidated efforts of the Ukrainian government and businesses for the deployment of NCTS at the local level, and for the successful completion of two evaluation missions of the European Commission. In addition, the challenges of the war in the center of Europe united the EC and friendly countries to support the European integration processes of Ukraine, in particular, in the customs sphere.  As a result, on August 25, 2022, 35 countries that are parties to the international customs convention officially invited Ukraine to join the European family of common transit and simplification of cross-border trade.

"The international application of NCTS, in addition to the re-engineering of the AEO program and the Customs Facilitation System, is a primary tool for the rapid passage of goods through customs while maintaining border security during wartime. With the accession to international customs conventions and the launch of relevant legislative changes, Ukraine will perform 81% of its obligations under the Association Agreement with the EU in the customs sphere. Achievements in international customs policy bring Ukraine as a candidate country significantly closer to joining the EU", stressed Yuriy Draganchuk, Deputy Minister of Finance of Ukraine for European Integration.

The day before, on August 30, the President of Ukraine Volodymyr Zelenskyy signed the Laws that allow the international application of NCTS to begin and expand the system of customs simplifications:

• Law of Ukraine "On Ukraine's Accession to the Convention on the Common Transit Procedure";
• Law of Ukraine "On Accession of Ukraine to the Convention on Simplification of Formalities in Trade in Goods";
• Law of Ukraine "On Amendments to the Customs Code of Ukraine on Certain Issues of Implementation of Chapter 5 of Section IV of the Association Agreement between Ukraine, on the one hand, and the European Union, the European Atomic Energy Community and their member states, on the other hand."

"These key political decisions in the context of Ukraine's accession to the Convention on the Common Transit were adopted by all partner countries in extremely quick manner, everything happened literally during the last month. For us, both the solidarity shown by the countries of the Convention and their direct support, which helps Ukraine to consistently carry out all the necessary actions for the introduction of European customs procedures, are very important”, said Deputy Head of the State Customs Service Vladyslav Suvorov.

Ukrainian businesses will receive new opportunities with the accession of Ukraine to the Convention:

• work according to the principle of "one vehicle - one declaration - one guarantee" and speed up the passage of goods through the customs border of Ukraine;
• use the advantages and simplifications of common transit that business has in the 35 countries of the Convention and that make up the complete picture of customs simplifications together with those that were already provided within the framework of the AEO program in 2019;
• wider tolerance for simplifications even without AEO status, as well as the possibility of applying reduced duty rates to raw materials for production on the domestic market, wider opportunities for advanced rulings, etc.

"The political decision of the 35 countries to invite Ukraine to the Common Transit Convention procedure is an assessment of Ukraine's efforts and recognition of the great progress achieved for the introduction of the common transit procedure. This encourages the European Union to continue providing assistance in the customs sphere", said Vytenis Alishauskas, EU4PFM International Key Expert on Customs.

"The international application of NCTS together with the re-engineering of the customs simplification program provides a start to the development of customs hubs and the market of financial customs services in Ukraine, encourages business to deshedow profits, opens up new opportunities on the international market for many branches of the Ukrainian economy. This is an evolution in the customs sphere, which should replace the relationship of the controlling authority with businesses with mutual cooperation under the principles of security and partnership. Only such a format will provide border security and economic support", said Oksana Nikanorova, Adviser to the Deputy Minister of Finance of Ukraine, coordinator of customs reforms of the Reform Support Office at the Ministry of Finance.