How customs officers serve smugglers: destruction of business through artificial value adjustments

How customs officers serve smugglers: destruction of business through artificial value adjustments

Over 70% of customs valuation adjustments of goods in 2021–2024 are overturned in courts.

And this is the average value for three years, with 2023 being the record-breaking year.

• At the Lviv Customs, courts overturned 85% of adjustments,
• at the Odesa Customs — 86%,
• at the Dnipro Customs — 88%.

Such striking statistics were published by Danylo Hetmantsev recently.

What do these numbers mean? A catastrophe

Just imagine: an institution, whose priority is to fill the budget and fight customs violations, is unable to uphold its decisions and prove the correctness of its findings in more than 70% of cases. Institutional incapacity and the criminalization of customs in its purest form.

Of course, this is a long-standing problem, and experts around customs processes have almost worn their fingers to the bone writing about the causes of this issue and remedies for its solution.

I highly recommend this in-depth article by Andriy Savarets in 2023.

But despite all this — no one is in a hurry to solve the issue

And why isn’t anyone rushing?

Because in the murky waters of slogans like "smugglers are buying the courts," "customs have no money for legal battles," it’s very convenient to manipulate the topic of "customs value" and fish there.

First of all, precisely "adjustment of the value of goods" and also "protocol of customs offense" are the main tools for "reining in" legitimate business under smuggling groups.
"Are you importing pots at $10? But we think they cost $25. Don’t agree? Go to court. We even know that you will win, but each of your shipments will go through this hell until you say ’I give up!’. After this, your pots will be imported by our ’partner company’ — and not for $10, even $5. But you will have to give $0.5 in cash. It will be even cheaper for you. And customs will agree to such a price."

Conditions are being created in which the import of certain groups of goods is possible only through a scheme.

A classic example — import of "fruits/vegetables" through the smuggler association "Lampochka," which has monopolized this direction. They import cheaper than anyone. If you want to import on your own, it will be much more expensive and problematic. Want it cheaper? Join the association.

Today, entire import industries have come under the influence of such lobbyists, who have all the signs of criminal groups but are called "business representatives."

This is one side of the topic. The other — is the servicing by customs of systematic smugglers, whose values are adjusted by customs (protocols drawn up) with numerous technical errors, which give the court grounds to cancel these decisions. And this becomes a formal cover for customs in their cooperation with smuggling clans. They claim, it’s all the courts’ fault. But courts usually cancel these decisions precisely on the grounds of customs’ errors. Here, the unchanging example — Vadym Alperin’s judicial "carousel."

Let me repeat: there is an objective component to the "customs value" issue

But we don’t observe any queues of initiators from the Ministry of Finance or customs itself with proposals for changes to the Customs Code.

Someone finds it very convenient, in conditions of customs’ complete loss of subjectivity, to have such tools for pressure on business while also servicing smugglers.

But the score is on the board. 70/30 not in favor of Ukraine.