Ukraine’s Progress Towards the Customs Union with the EU

The European Commission positively assessed the results of alignment of customs legislation and customs procedures with those of the EU in the context of Ukraine’s application for EU membership in its report. What Ukraine will be assisted with in the immediate future?

Achieving the European standards and integration of the Ukrainian customs with the EU customs area have acquired a special significance since the EU granted Ukraine candidate status. After all, the EU is primarily a customs union.

In early February, the Commission published its first Staff Working Document on Ukraine’s application for membership of the European Union – an analytical report following the Communication from the Commission to the European Parliament, the European Council on Ukraine’s progress in approximation to the EU standards in various areas. Ukraine’s readiness to fulfil the requirements of the Customs Union chapter is highly assessed at the 4th level of 5 levels available (only digital services for citizens are given the highest level so far).

It is important that the EU does not only assess, but also helps fulfil the requirements. So, what has been successful and what are the major areas of assistance to Ukraine as an EU candidate in the customs reform?

What has been done by Ukraine and what is expected by the EU

The SWD on Ukraine’s application for membership of the European Union emphasizes that all EU Member States are part of the EU customs union and follow the same customs rules and procedures. This requires (1) legislative alignment, (2) adequate implementation and enforcement capacity, and (3) access to the common computerised customs systems. The Association Agreement requires Ukraine to align its customs system and customs legislation with that of the EU.

Based on the Commission SWD, we can assess principal results of Ukraine’s EU integration progress in the customs area as well as priorities for development.

What We Managed Together

To understand the potential of future cooperation between Ukrainian institution and partner organizations to reform Ukrainian customs service, I need to draw your attention to which of the above results were achieved due to consolidated multi-level work of the Ministry of Finance of Ukraine, State Customs Service in cooperation with international partners, including EU4PFM and RSTs of MoF and SCS.

We consider introduction of NCTS in Ukraine and joining the Conventions as a key achievement in the customs sector. At that, EU4PFM provided its support when configuring and servicing software and operating, implementing and testing the system, assisted in organizing helpdesk, contributed to training customs officers to work with the system. Meanwhile, relevant legislative amendments were drafted and adopted. MoF and SCS members did everything to accomplish the best results, and our experts also contributed to the legislative framework.

Another mutual achievement is seen in the amendments to the Customs Code, which cover majority of the Association Agreement provisions. The CCU amendments of 15 August 2022 (No.2510) are a product of collaboration with the MoF, MoF RST and the SCS.

Through the contractor DG TAXUD, the European side has also facilitated Ukraine’s connection to the European Union’s Common Communication Network / Common System Interface (CCN//CSI). We provided expert advice on EU best practices as regards financial criteria for АЕО, customs audits, protection of proprietary rights and customs solution system.

Where will the EU assist?

The Commission representatives repeatedly emphasized that the customs reforms remained among the most essential ones. As we know, the new macro-financial assistance program to Ukraine is 18 billion euros worth, and several provisions of the Memorandum on application of these funds are related to public finance management and EU4PFM, in particular. Among those are continued reform of customs management, development of IT systems, anti-corruption support. Criminalization of smuggling, which is related to customs operations as well, is also among the areas of importance. These provisions are agreed upon with the Ukrainian side.

One of EU4PFM’s priorities in the customs area is assistance to the SCS in the development of an IT system that should account for the European MASP-C document to be aligned with Ukrainian legislation, which, in turn, will comply with EU acquis.

In the context of changes to some operational systems, Ukraine is commencing deployment of the Customs Decisions System (CDS). EU Member States implemented an electronic application system for any customs decisions and permits in 2016. It is an important component of the European e-Customs, and the EU will assist Ukraine in creation of the same system.

As for protection of intellectual property rights, we have initiated in cooperation with the SCS and will continue a series of workshops involving representatives of leading global manufacturers, such as Lego, Sony PlayStation, etc.

Another area may be referred to as “maintaining accomplishments”. A prerequisite of Ukraine’s accession to the Convention on a Common Transit Procedure as per its commitments to the Commission, is completing transition (alongside with other members of the Convention) to an updated NCTS version (so-called Phase 5) till the end of 2023. Here we keep providing support – expert, software development, conformity testing, training, etc. – in transition from NCTS Phase 4 to Phase 5, as well as designing specifications for the following step, i.e. transition to NCTS Phase 6.

Implementation of the EU Customs Legislation in Ukraine

I would like to highlight particularly the legislative area, which, according to the Commission SWD, is ranked first among the “homework” assigned to Ukraine as a country, which is a candidate to the EU membership starting from 24 June 2022. This status envisages that approximation of Ukrainian legislation to that of the EU must be aimed at its complete alignment.

It should be emphasized here that “fulfilment of the Association Agreement” and “preparation to the EU membership” are different tasks. Especially as regards legislation.

As we know, most of provisions of Ukrainian customs legislation have been aligned with those of the EU as a part of implementation of the Association Agreement. It is about a majority of national legislative provisions (“puzzle pieces”) that enable joining to the programmes, systems and procedures within customs union as specified in the Association Agreement. The Association Agreement, however, does not address the legislative architecture these “puzzle pieces” are embedded into.

At that, requirements of the Customs Code of Ukraine are often much more detailed than corresponding provisions of the UCC and relevant acquis, which are more extensive and flexible. Besides, significantly different phrasing of corresponding provisions of Ukrainian customs legislation complicates their compliance assessment against the EU customs legislation and does not guarantee that Ukrainian customs authorities as well as economic operators will be familiarized with the EU customs legislation and prepared to apply them directly following Ukraine’s accession to the EU.

It is also important to keep in mind that the EU customs legislation is constantly evolving, so the process of step-by-step approximation of individual national regulations to the EU law would be like chasing a moving train. A successful solution is having legislation that can be evolved synchronously with that of the EU.

This is why Ukraine is faced not only with the task, specified in the Association Agreement, but also with the next one, driven directly by the prospect of accession to the EU, i.e. to make the very structure of national legislation “native” to that of the EU.

EU4PFM experts have suggested the Concept of Implementation of the EU Customs Legislation in Ukraine, which accounts exactly for this task.

The document contains, inter alia, a roadmap for legal progress in the customs area accounting for the EU accession as a strategic objective; a “legal architecture” framework of national customs legislation prior to and following Ukraine’s accession to the EU; a recommended pattern of provisions and structure of the Customs Code of Ukraine.

The experts consider it useful to get started with designing a so-called “legal architecture” of national customs legislation that describes which provisions of customs union acquis should be transposed into the legal acts adopted by the Parliament, and which ones may be a part of secondary legislation (such as resolutions of the Cabinet of Ministers or orders of competent authorities).

What appears the most feasible in this situation is to start drafting, as soon as possible, a new Customs Code of Ukraine, based on the provisions of the EU Customs Code to the maximum extent.

Drafting and enforcement of the new Customs Code of Ukraine must be synchronized with advancement of electronic systems needed for implementation of its requirements. The reason to this is the interdependence between implementation of the “UCC package” (Union Customs Code) and that of the electronic systems listed in the UCC Work Programme and the Multi-Annual Strategic Plan for Electronic Customs (MASP-C): it is impossible to deploy such IT systems without complete alignment of the Customs Code of Ukraine to the UCC; and the new Customs Code will not be applicable in full without these IT systems.

Ukraine should also develop its national components of trans-European electronic systems and adjust its national electronic systems in accordance with the EU accession requirements. However, where centralized systems are in place, it may be decided on using such systems from the date of accession without developing national systems that perform similar functions.

Availability of high-quality, professional, certified Ukrainian translations of basic acts from the UCC Package would be essential for drafting the new Customs Code. This will allow, in particular, to improve Ukrainian customs terminology, especially the terms corresponding to those used in the customs union acquis. This terminology may be further used to translate both remaining and newly adopted legal acts, applicable for the customs union.

Once Ukraine joins the EU, the EU legislation is required to be available in Ukrainian. So it would be only reasonable to start this process in advance. We are now ready to help with this job.

We will continue providing assistance as to resolve all the issues related to implementation of the EU customs legislation as a part of association with the EU.

Operational Assistance during the War

This was the first case in our practice when a part of operations under the Programme was re-focused on emergency-related support. Power supply and personal protective equipment, such as diesel generators, bulletproof helmets, vests, first aid kits, etc., was provided upon request of customs authorities. An MDC data processing module was supplied to the SCS, it is now almost ready. It is essential for uninterrupted operation of the State Customs Service of Ukraine.

EU4PFM will continue both supporting customs reform and accounting for our partners’ urgent needs, caused by hostilities.


We keep standing together with Ukraine and supporting it along the way towards the EU accession. As members of International Technical Aid Programme, we are interested in Ukraine fulfilling all the requirements in the customs area that will enable your country the join the EU, just like Ukraine is. There are no secrets and illusions here – problems with the customs are well-known. The results achieved by Ukraine, including due to its teamwork with international partners, give us the reasons to be optimistic.