Customs cooperation is the most dynamically developing area in the relations between Ukraine and the EU.

For Ukraine to acquire EU membership, it must implement EU customs acts into its national legal framework. The basic list of these acts is defined in Annex XV "Alignment of Customs Legislation" to the Association Agreement, updated on October 25, 2022. To fulfill this Annex:

- The protection of intellectual property rights during border crossing has been aligned with EU norms through the adoption of the Law of Ukraine "On Amendments to the Customs Code of Ukraine Regarding the Protection of Intellectual Property Rights During the Movement of Goods Across the Customs Border of Ukraine" (No. 202-IX dated September 17, 2019).

- On October 1, 2023, Ukraine joined the Convention on Simplification of Formalities in Trade in Goods of May 20, 1987, and the Convention on a Common Transit Procedure of May 20, 1987, with amendments. Connecting to the NCTS (New Computerised Transit System) is the most significant achievement on the path of Euro-integration. On May 1, 2024, the State Customs Service plans to transition to the more advanced Phase 5 of NCTS, which is a requirement of the EU for all member countries of the common transit.

- A draft law (No. 5810) on amendments to the Customs Code of Ukraine regarding the implementation 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, concerning exemption from import duties was prepared and submitted to the Verkhovna Rada on July 20, 2021.

- On January 16, 2024, the Cabinet of Ministers submitted to the Verkhovna Rada the draft law No. 10411 on amendments to the Customs Code of Ukraine regarding the implementation of certain provisions of the EU Customs Code.

In the European Commission's report on enlargement dated November 8, 2023, regarding Ukraine and the EU acquis "Customs Union" section, a good level of preparation is noted.

On February 24, 2022, the armed aggression by Russia, with Belarus's support against Ukraine, had extremely negative consequences for Ukraine's customs sector, the European continent, and the world. Half of the border crossing points were closed (including all points on the border with Russia and Belarus), all airports were closed, sea ports were blocked, aggressors violated Ukraine's customs border, temporarily occupied part of Ukraine's customs territory, and began opening Russian customs offices there, etc. Despite the armed aggression against Ukraine, the European Commission's report noted that the State Customs Service largely maintained its operational and administrative potential. The process of Euro-integration continued.

On September 5, 2022, during the Association Council Ukraine-EU, an Agreement between Ukraine and the European Union on Ukraine's participation in the "Customs" Program of the Union for cooperation in customs matters and an Agreement between Ukraine and the European Union on Ukraine's participation in the European Union program for cooperation in the field of taxation "Fiscalis" were signed. The mentioned Programs involve all EU member countries and candidates for membership. The goal of the Programs is to enhance cooperation and capacity of customs and tax authorities of participating countries.

The "Customs" Program (Regulation (EU) No 2021/444) provides for extensive cooperation between the customs administrations of EU member countries, as well as joint development of essential customs IT tools. Third countries (candidates for EU membership, associated countries) also have the right to participate, but on a fee-paying basis.

The EU is actively discussing the initiation of the exchange of advance customs information - an effective tool for combating customs fraud.

In 2023, the Authorized Economic Operator (AEO) program in Ukraine received further development. As of April 1, 2024, Ukraine had 33 AEOs, including one AEO-B (security and reliability). The presence of AEO-B is considered for mutual recognition of AEOs, which is a goal for both Ukraine and the EU. A Roadmap for mutual recognition of AEOs between Ukraine and the EU has been agreed, with legislative compliance being worked out, and IT aspects of mutual recognition of AEOs are being analyzed – consultations between Ukraine and the EU on mutual recognition of AEOs have started.

From January 1, 2019, the provisions of the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin (PEM Convention) began to be applied in bilateral trade between Ukraine and the EU. During 2021-2023, work continued on implementing alternative PEM preferential rules of origin between Ukraine and the EU. On November 16, 2023, a corresponding Decision by the Ukraine-EU Customs Cooperation Subcommittee was approved and came into effect. After official publication in Ukraine, these rules began to apply in relations with the EU from December 1, 2023. Alternative rules of origin are more beneficial for business and will facilitate further development of Ukraine-EU trade.

On December 7, 2023, Ukrainian representatives participated in approving changes to the PEM Convention during the 15th meeting of the Joint Committee of the PEM. The changes to the PEM Convention will come into effect on January 1, 2025. From this date, so-called alternative rules of origin will become the main ones according to the Convention (currently, they are implemented on a bilateral basis between parties that have agreed to apply them to each other).

On January 1, 2024, the law on the criminalization of goods smuggling came into force.

The Association Agreement provides for the application of Customs Blueprints. Standard 12 "Investigative and Law Enforcement Activities" of the customs blueprints explicitly provides for measures to ensure the law enforcement and investigative functions of customs authorities. The National Revenue Strategy (adopted by the Government on December 27, 2023) contains provisions for granting customs authorities the right to conduct operational investigative activities and pre-trial investigations in cases of goods smuggling from 2024 to 2027.

Additionally, the National Revenue Strategy serves as a roadmap for reforming the tax and customs systems, as well as improving tax and customs administration procedures. The NRS provides for a comprehensive customs reform:

• Implementation of the Anti-Corruption Program of the State Customs Service and the introduction of customs officers' certification, using body cameras to record physical control of goods and interactions with citizens at the border.

• Plans to establish collaboration with the business sector. An immediate step will be the development of a business support service (Help Desk) that will respond quickly to business inquiries. This will help assess and maintain a balance between control and simplification of customs procedures. Further development and wide application of the business simplification program, including Authorized Economic Operator (AEO) and NCTS (Common Transit System), is expected.

• Strengthening international cooperation, which includes exchanging customs information between countries and joint control at border crossing points.

• Institutional development, including raising customs officers' salaries to market levels, implementing an efficiency evaluation system (KPI), and improving personnel management through contracts, rotation, and personal accountability.

• Development of IT and technical equipment - implementing new IT solutions compatible with the EU, updating the customs processing system, risk management, and equipping border crossing points with modern technical tools such as scanners, scales, and video surveillance systems/

A Long-Term National Strategic Plan for Digital Development, Digital Transformation, and Digitalization of the State Customs Service has been approved, establishing a list of measures that Ukraine must undertake to harmonize customs processes with European standards. Special attention has been given to meeting all requirements for future integration into EU systems. The Multi-annual Strategic Plan for Electronic Customs (MASP-C) has been taken as a basis. The National Plan is to become a guiding document for the implementation and development of customs information systems in the coming years.

From April 2024, the process of screening the alignment of Ukraine's customs legislation with EU customs legislation will begin.

Article 80d of the Association Agreement provides that the Parties "exchange information and/or initiate consultations with a view to developing, where possible, common positions in international organizations related to customs, such as the WTO, WCO...". The State Customs Service closely cooperates with DG TAXUD of the European Commission and other EU countries in key committees of the World Customs Organization: the Enforcement Committee, the Permanent Technical Committee, the Capacity Building Committee, the Harmonized System Committee, etc.

Useful Links:

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: https://www.kmu.gov.ua/diyalnist/yevropejska-integraciya/ugoda-pro-asociacyu

State Customs Service of Ukraine: http://www.customs.gov.ua/

Directorate-General for Taxation and Customs Union (DG TAXUD) of the European Commission: https://ec.europa.eu/taxation_customs/home_en

World Customs Organization: http://www.wcoomd.org/

Information on Import Conditions to the EU for Goods Originating from Ukraine (and other countries): https://trade.ec.europa.eu/tradehelp/

Quota Balances Online: https://ec.europa.eu/taxation_customs/dds2/taric/quota_consultation.jsp?Lang=en

Information on the Mandatory Registration of Non-Resident Persons at the State Customs Service of Ukraine:

The State Customs Service of Ukraine informs that starting from July 1, 2021, the provisions of paragraph 61 of Chapter XXI of the Customs Code of Ukraine regarding the mandatory registration of non-resident persons at the State Customs Service of Ukraine, who declare goods in Ukraine, will come into effect.

According to part eight of Article 455 of the Customs Code of Ukraine, failure to register is grounds for refusal of customs clearance and the passage of goods and commercial vehicles across the customs border of Ukraine.

According to part one of Article 455 of the Customs Code of Ukraine, the following non-resident persons are subject to mandatory registration:

• Declarants of goods, commercial vehicles, in cases specified in paragraph 4 of part two of Article 265 of the Customs Code of Ukraine (foreign carriers transporting goods, commercial vehicles across the territory of Ukraine under transit);
• Carriers of goods across the customs border of Ukraine and/or between customs offices on the territory of Ukraine or persons responsible for such transportations (foreign carriers transporting goods under customs control).

Registration can be done:

• Upon entry or exit from Ukraine by filling out the registration form directly at the border crossing point and providing a copy of the certificate of registration of the non-resident, issued by the competent authority of the country of registration;
• By mailing a completed registration form to any customs office and providing a copy of the certificate of registration of the non-resident, issued by the competent authority of the country of registration;
• By directly submitting a completed registration form and a copy of the certificate of registration of the non-resident to any customs office, or submitting these documents through an authorized representative acting on the basis of a power of attorney from the non-resident, or through a customs broker acting under a contract between the non-resident and a Ukrainian customs broker.

The registration form may be completed in any official language of international communication. To expedite the processing of information, it is preferable to complete it in Ukrainian or English.

After entering the data from the application into the customs service's information system, the non-resident will be assigned a temporary registration number within one hour.

Refusal to assign a temporary registration number is possible if:

• The registration form contains incomplete mandatory data;
• The non-resident is already registered.

The temporary registration number allows the non-resident to perform all customs formalities and procedures without restrictions.

The non-resident will be informed about the registration and assignment of the registration number within the next five working days.

Temporarily, until the termination or cancellation of martial law in Ukraine, introduced by the Decree of the President of Ukraine "On the Introduction of Martial Law in Ukraine" dated February 24, 2022, No. 64/2022, approved by the Law of Ukraine "On Approval of the Decree of the President of Ukraine "On the Introduction of Martial Law in Ukraine" dated February 24, 2022, No. 2102-IX, registration with customs authorities for non-resident persons in accordance with part one of Article 455 of the Customs Code of Ukraine is not required.