Ukraine & The Common Transit Agreement
To bring tangible benefits to the Ukrainians, the EU has pledged to assist and support them in their democratic reforms. This aid covers customs reform and critical areas like corruption, energy, and trade. To enable this, Ukraine and the European Union signed an Association Agreement in 2014.
The EU has taken action to support customs reform in several areas. These include IT transformation, joining the Convention on a Common Transit Procedure, implementing an Authorised Economic Operator Program and bringing Ukrainian customs legislation in line with the customs rules and regulations in the European Union. Digitalisation and open communication between companies and customs and tax authorities are at the heart of these reforms.
Digitalisation is the basis for smoother trade
One of the digital improvements for customs operations in Ukraine is the New Computerized Transit System (NCTS). That system handles the movement of goods between the EU countries, Norway, Switzerland, Iceland, Liechtenstein, Turkey, North Macedonia, Serbia, the UK and now, also Ukraine. Being able to move goods under transit is key in supporting trade between Ukraine and the European Union.
The Common Transit Procedure simplifies the movement of goods. Duties, taxes, and other restrictions are temporarily suspended due to the NCTS, which also supports paperless customs clearance. This ultimately reduces the costs associated with border formalities and reduces the number of trucks waiting at the border, for example.
Digitalisation has other benefits. Businesses and customs authorities can easily track shipments along each journey step. They can easily exchange information to process shipments. This information includes data like quantities, product codes and descriptions.
For AEO-certified companies, the agreement has further benefits, as they can use simplified procedures.
Ukraine has joined the Common Transit Agreement
At the end of 2022, Ukraine finished the needed reforms, and as of October 2022, they are part of the Common Transit System. In a speech celebrating this milestone EU Commissioner Gentiloni said:
And on October 1, we celebrated Ukraine joining the Common Transit Convention. This is a momentous feat, and I must take this opportunity to congratulate Ukrainian colleagues for this absolutely Herculean task. You should be very proud of yourselves.
Your work, together with that of my services in the Commission, means that customs transit procedure with the EU will from now on be much simpler and more efficient.
Mutually recognised financial guarantees, fewer controls and access to state-of-the-art IT systems will help to cut costs for EU and Ukrainian businesses, while reducing border processing time to just seconds. This not only facilitates, but actually boosts trade.
We should however keep in mind that the Common Transit Convention will only have maximum effect if Ukrainian traders start using it widely and if vehicles transporting Common Transit goods will get priority treatment at the border and priority access to the border with the help of traffic police.
The success of using the Common Transit procedure depends on the close cooperation of different Ukrainian services.
What do companies that trade with Ukraine need to do?
Companies that want to benefit from the Transit procedures need to have a Customs Comprehensive Guarantee (CCG) in place. This guarantee is required for import, warehousing, transit, processing and specific use. Companies that already have guarantees in place need to update their guarantee documents to include Ukraine. These updates to the guarantee documents also have to be submitted to the Customs Authorities.
Contact one of our specialists if you have any questions about trading with Ukraine or the transit agreement. They are happy to answer any of your questions. They can also assist you with updating your guarantee documents or support you with other importing or exporting matters.