Jurgita Domeikiene, Team Leader of the EU Public Finance Management Support Program for Ukraine (EU4PFM), told Ukrinform about the support provided.

– Your project is one of those that helps Ukraine to follow the European path. We do hope that Europe is aware of how difficult it is for Ukraine to realize its potential and fulfill the provisions of the Association Agreement in the conditions of a hybrid war against it?

– Not only Ukraine but also EU countries have also signed an Association Agreement with the EU, as they consider Ukraine an important and promising partner. This means that not only Ukraine but also international partners are interested in fulfilling the terms of the Agreement. Ukraine has great intellectual, human and economic potential, that is able to make a significant contribution to the development of an integrated Europe in the future.

The scope of work is large in this direction, and, to be honest, the financial costs of reform are also considerable. EU countries (especially those that joined later, such as Lithuania, Estonia, and others) know this from their own experience. Therefore, we must organize comprehensive and effective assistance for the implementation of reforms in Ukraine – both technical and expert and financial one.

Such assistance is usually organized through programs and projects, with a focus on specific areas and forms of assistance. For example, the Reform Support Teams (RST) of the Ministry of Finance of Ukraine and the State Customs Service of Ukraine, that are also funded by the European Union, pay more attention to expert and organizational assistance.

EU4PFM (EU Public Finance Management Support Program for Ukraine) focuses on expert, technical and financial assistance. Technical and expert assistance is also provided by US TAPAS, USAID, and other projects.

– What does this technical support mean? And, accordingly, what is expected from such a support?

– I would like to draw your attention to the fact that European legislation, with which, Ukrainian legislation has to be harmonized according to the Association Agreement, does not remain unchanged. The EU legal system is evolving, and harmonization is envisaged not with the EU legislation that existed at the time of signing the Agreement (ie the 2014 model), but with its new stages. So, “synchronization in development” is needed. Therefore, one of the important areas of international experts assistance, including the EU4PFM Program, is to provide up-to-date information on updates in European legislation so that Ukraine and the EU can move in the same direction.

Here is an example. In the EU, after the adoption of the EU Customs Code, customs authorities receive a new mission. If earlier it was mainly about customs duties and protection of the domestic market and local business, now Customs is becoming an important link in the international trade chain. The intensity of international trade and the competitiveness of countries and companies depends on how efficiently and quickly it will work. We associate speed and efficiency primarily with the modernization and simplification of customs procedures, and these processes, in turn, depend on the development and implementation of modern IT systems.

Therefore, in recent years, a phased Work Plan has been developed in the framework of the EU Customs Code, according to which countries implement or upgrade 17 IT systems. The 2nd stage ends at the end of 2022, the 3rd, the final – in 2025.

As some of these IT systems must ensure the exchange of information between countries, Ukraine needs to plan appropriate measures in advance. And we are ready to help in this.

– Please, tell us more about specific areas of assistance in reforming the Ukrainian customs. How difficult it is to implement such a changes?

– Probably, it would be strange if everything happened as if by a magic wand. After all, we have institutional inertia, bureaucracy, lack of budget funds, and (let’s face it) the corruption, and other factors. But this does not deter international partners, but rather motivates them to work more actively and efficiently.

In addition, we see that the processes of reforming the Customs are in the focus of attention of the government and the Office of the President of Ukraine. Ukraine, having signed the Association Agreement, has chosen the vector of development, has tasks elaborated in accordance with this path, and we help (and will help) to implement them. And the results are already there.

For example, the Authorized Economic Operator (AEO) Program has been introduced (which was among the items of the economic part of the Association Agreement). Together with the Ministry of Finance of Ukraine, the State Customs Service of Ukraine, and other international partners, such as RST, we are actively moving towards Ukraine’s accession to the Convention on a Common Transit Procedure (CCTP) – the NCTS system is already operating nationwide. At the end of November, a pre-monitoring visit of the EU experts is expected, which is one of the responsible stages in the international implementation of the system in Ukraine. According to preliminary estimations, this implementation can be expected in 2022.

– As we can see, Ukrainian customs today needs technologies that would minimize the notorious human factor, on which corruption schemes are mostly built. What do you offer in this direction?

– A full implementation of the “homework” under the Association Agreement provides, of course, the introduction of new IT systems at customs.

In accordance with the directions identified jointly with the Ukrainian partner institutions in 2019, when our Program was launched, we support the creation of the most important IT systems for customs: a modern customs risk management system, as well as post-customs control and customs audit. They are crucial for speeding up customs clearance procedures, as well as for ensuring the effectiveness of these procedures. We also help to develop a system of tariff and non-tariff measures and a system of customs value control.

The next step is to discuss the IT architecture of the Customs and the “road map” of IT transformation. These documents should give a common vision of the Ministry of Finance of Ukraine, the State Customs Service of Ukraine, and international partner organizations, how to move forward, which systems should support which processes, and what funds we should provide to support these processes.

Another task we see is setting up a communication between Customs and business on the latest customs simplifications (AEO, common transit system, customs audit). In particular, with the participation of representatives of the State Customs Service of Ukraine, business, international and Ukrainian experts on this topic, a round table was held recently at Interfax-Ukraine and an online seminar for business networks in the Western region of Ukraine. And we will continue this practice.

– Do you focus on work with HR management, recruitment, other components of personnel reform of the Ukrainian customs? After all, this is one of its main problems, the solution of which also requires modern approaches.

– Of course, we understand that HR is an important area of reform of the State Customs Service of Ukraine, a personnel reform in particular. There is a need to develop and implement new approaches to working with staff, assessing their skills and performance in accordance with best European practices in HR. After all, Customs is not only the management but also 11 thousand employees. Therefore, our program provides training in modern and systematic approaches to personnel management for HR representatives of the State Customs Service of Ukraine (regional personnel departments and the central office). Training of HR specialists is a mandatory component of the assistance of international partners in reforming the personnel service of the State Customs Service of Ukraine.

– In general, what results do you plan to achieve?

– In conclusion, we can say that our work is to help Ukraine in implementation of the provisions of the EU Association Agreement, which relate to customs reform. These are not the rules set in stone, but lively cooperation, aiming to help Ukraine build a customs system in accordance with the updated ideology of EU customs on the one hand and on the other – to synchronize the changes that inevitably occur in the customs legislation of the European Union itself.

Business (honest business!) should have simpler and more transparent customs procedures, better opportunities for international trade, including customs simplification, and “customs visa-free” – the opportunity to use, like the EU business, the common transit regime.

The State Customs Service of Ukraine should move from paper processes to modern digital technologies, which allow its activities to be more efficient and less dependent on the human factor. And the state is expected to receive higher revenues due to the prevention of fraudulent schemes in the transit regime, the growth of international trade, transparency through the use of IT systems. Given that the customs in Ukraine provide about 40% of revenues to the state budget, the ultimate beneficiary of our assistance, therefore, should be not only business and customs but also citizens whose well-being depends on the state budget.

The cooperation of international experts with Ukrainian officials in the framework of international technical assistance projects (in particular, such as the EU4PFM Program) allows Ukraine and EU countries to gradually establish a synchronous path in the development of customs. It happens maybe not as fast as we all want, but – systematically and, I hope, irrevocably.

Jurgita Domeikiene,
Team Leader of the EU Public Finance Management Support Program for Ukraine (EU4PFM),