Ukraine

Special Provisions

Special provisions allow exporters greater flexibility in the export process.

Outward Processing

Outward processing is a facility that allows Ukrainian goods to be temporarily exported from the customs territory in order to undergo processing or repair. Products resulting from the process are subsequently released for free circulation in the customs territory of Ukraine. Under outward processing relief, these goods are either partially or totally exempted from export duties.

Outward processing provides the following advantages to businesses:

Enables businesses to take advantage of more competitive labor costs outside the country
Enables businesses to take advantage of kinds of processing that are not available within Ukraine
Encourages the use of Ukrainian raw materials to manufacture finished products outside the territory of Ukraine

State Export-Import Bank of Ukraine (Ukreximbank) Financing Schemes

State Export-Import Bank of Ukraine (Ukreximbank) is a joint-stock bank dedicated to supporting the country's international trade. It acts as the sole financial agent of the Government of Ukraine with respect to loans from foreign financial institutions, which are originated, borrowed, or guaranteed by Ukraine. It is a partner of the World Bank under the largest export development project in Ukraine, a partner of the European Bank for Reconstruction and Development (EBRD) under the EBRD Trade Facilitation Program and EBRD Energy Efficiency Program, and also a partner of Kreditanstalt für Wiederaufbau (KfW) under its Small and Medium Enterprises Program. In its capacity, it services a considerable proportion of export and import activities related to Ukrainian enterprises and enjoys unique experience in the Ukrainian market in various areas of export-import banking, including documentary business and trade finance.

Investment Promotion and Protection Agreements (IPPA)

Investment Promotion and Protection Agreements (IPPA) provide guarantees as to how foreign investors will be treated by their host governments once they have made an overseas investment, such that they complement trade by promoting greater foreign direct investment (FDI). This helps to grow investors' confidence and hence encourage the flow of FDI.

Ukrainian National Committee of the International Chamber of Commerce

The Ukrainian National Committee of the International Chamber of Commerce operates a consulting agency, which assembles a team of field experts to advise clients interested in doing business in Ukraine.

International Road Transport (Transports Internationaux Routiers) or TIR Convention

Administered by the United Nations Economic Commission for Europe (UNECE), the International Road Transport (Transports Internationaux Routiers) or TIR Convention is a multilateral treaty created on November 14, 1975, to simplify and harmonize the administrative formalities of international road transport. The 1975 convention replaced the TIR Convention of 1959, which itself replaced the 1949 TIR Agreement. With more than 50 countries using the procedure, the TIR system is the international customs transit system with the widest geographical coverage. A handbook on using TIR Carnets is available from the UNECE at www.unece.org/DAM/tir/handbook/english/newtirhand/TIR-6Rev11e.pdf.

As with other customs transit procedures, the TIR system enables goods to move under customs control across international borders without the payment of the duties and taxes that would normally be due at importation (or exportation). A condition of the TIR procedure is that the movement of the goods must include transport by road.

Goods move from a customs office of departure in one country to a customs office of destination in another country under cover of an internationally accepted customs transit document, the TIR Carnet, which also provides a financial guarantee for the payment of the suspended duties and taxes. The guarantee system is managed by the International Road Transport Union or IRU (www.iru.org).

The IRU's TIR-EPD (https://tirepd.iru.org) is an electronic application that enables TIR Carnet holders to submit electronic pre-declarations (EPD) to customs authorities in different countries. With TIR-EPD, customs authorities are able to confirm that the pre-declaration was submitted by an authorized TIR Carnet holder and that the TIR Carnet is valid. This exchange of advance information facilitates pre-arrival risk analysis and makes border crossings simpler, safer, and faster. A TIR-EPD user guide is available at www.iru.org/system/files/TIR-EPD%20User%20Guide%20ENG.pdf.

New Computerized Transit System (NCTS)

The New Computerized Transit System (NCTS) is a computerized transit system based on an exchange of electronic messages. The first fully computerized customs system, the NCTS is available to all EU and European Free Trade Association (EFTA) countries as well as the UK, Turkey, and North Macedonia. It replaces the various paper documents and certain formalities now required by customs offices, and will apply to both internal (EU) transit and external transit, regardless of the mode of transit (with the exception of simplified transit procedures where a commercial document serves as the transit declaration).

The NCTS tracks goods at certain points along their route:

Customs office of departure
Customs office of destination
Customs office of transit (the customs office at the point of entry or exit to or from the customs territory of the EU)

It is also noted when a change in the customs office of transit or destination is made.

For more information on the NCTS in Ukraine, visit https://customs.gov.ua/en/rezhim-spilnogo-tranzitu-ncts. Access to the country's NCTS trader's portal is available at https://commontransit.customs.gov.ua/trader.

Authorized Economic Operator (AEO)

Ukraine is currently implementing a European Union (EU)-compliant Authorized Economic Operator (AEO) program to reduce customs formalities. This was made possible by updating the legal framework, which now meets EU criteria for AEO. This will allow Ukraine to conclude bilateral agreements with other countries on mutual recognition of AEO.

When granted by customs authorities, AEO status allows a Ukrainian company to use simplified customs formalities. These include:

A simplified customs declaration procedure;
A shortened form of import declaration;
Given priority for customs formalities; and
Permission to use a special traffic lane (commercial vehicles only) for crossing border, etc.

Recognition of the AEO status of Ukrainian companies by customs authorities of other countries, in particular the EU (after the conclusion of relevant bilateral agreements on mutual recognition) means that, for example, EU countries in this case should trust Ukrainian AEO companies as well as European companies.

AEO status can be granted by EU member states to any economic operator established in the EU which meets criteria in the following categories: customs compliance, appropriate record-keeping, financial solvency and, where relevant, security and safety standards. AEO status granted by one EU member state is recognized by other members. AEO are allowed to make use of simplified customs procedures when importing goods to the member state granting AEO status. While the same benefits may not be available when importing to other member states, those states generally allow economic operators with AEO status to use some simplified procedures.

The application for AEO status is submitted through participating customs agencies. Economic operators can apply for an AEO status either to have easier access to customs simplifications or make it easier to comply with new security requirements. To obtain AEO status, a candidate must demonstrate, among other things, that for three years prior to the application date:

He/she has been a duly registered resident entity in Ukraine;
He/she and their officials (including beneficial owners, substantive shareholders, supervisory board members) have not had criminal records in the sphere of commercial activity, including but not limited to smuggling;
He/she and their officials or customs brokers have not committed repetitive or systematic violations of customs rules; and
He/she has been financially solvent, etc.

For more information on Ukraine's AEO program, visit https://customs.gov.ua/en/deiaki-pitannia-funktsionuvannia-avtorizovanikh-ekonomichnikh-operatoriv. For detailed information on the implementation of AEO programs worldwide, consult the World Customs Organization's AEO compendium at www.wcoomd.org/-/media/wco/public/global/pdf/topics/facilitation/instruments- and-tools / tools / safe-package / aeo-compendium.pdf.

Mutual Recognition of AEO

Mutual recognition of AEO is a key element of the WCO's Standards to Secure and Facilitate Global Trade (SAFE Framework). The 2021 version of the SAFE Framework strengthens cooperation between customs and other government agencies; promotes smart security devices to optimize customs control and effectively monitor the movement of goods in a real-time basis; and includes baseline provisions on the development of AEO programs and implementation of mutual recognition.

By mutual recognition of AEO, two customs administrations agree to:

Recognize the AEO authorization issued under the other program
Provide reciprocal benefits to AEO of the other program

The EU has mutual recognition of AEO programs with Norway, Switzerland, Japan, Andorra, the United States, and China. In addition, the EU and WCO are helping prepare a number of other countries to implement AEO programs.

Note: The above information is subject to change. Exporters are advised to obtain the most current information from a customs broker, freight forwarder, logistics professional, or the local customs authorities.

Source: State Customs Service of Ukraine (www.customs.gov.ua); European Commission (www.ec.europa.eu)