10 recommendations to find qualified customs brokers (professional customs brokerage services) in Ukraine

All imported/exported goods and means of transportation (road, rail, maritime or air) crossing the customs border of Ukraine are subject to customs and border control, which is carried out by the customs authorities in order to ensure that the customs rules and other applicable provisions are observed. An individual may make his/her own Customs clearance of goods imported for personal use or business. All merchandise coming into Ukraine must clear Customs and is subject to a Customs duty unless specifically exempted by law. Clearance involves a number of steps: entry, inspection, appraisement, classification and liquidation. The importer must declare the dutiable value of merchandise. The final appraisement is fixed by Customs.

Foreign exporters who intend to import goods into Ukraine should understand the system and may find Ukraine's import regime complicated, especially, for inexperienced traders. Knowing which documents are necessary for the clearance of goods will avoid delays and save money. There are many practical issues to consider before making import. Businesses have to think how much time, money and effort it will take to manage import activities.

More than 200,000 importers deal with the State Customs Service of Ukraine and its Field Operation offices all around Ukraine each year. Traditionally, most rely on the services of a licensed customs broker, offering a growing range of specialized services to help importers get their shipments properly cleared. For each of these transactions, reams of critical business data must be generated, about everything from country of origin and destinations, commodity classification and coding, customs valuation, payments assessment and optimization, compliance with non-tariff regulations, export and import controls and filing pre-arrival cargo control documents at the customs office.

When selecting qualified customs broker (professional customs brokerage services) in Ukraine, it is crucial to ask the following questions or undertake the recommended actions:

1. Only licensed Customs Brokers are allowed to transact Customs business on behalf of others. Each licensed firm is required to have at least one licensed broker on staff. No person may conduct “customs business” (other than solely on behalf of that person) unless that person holds a valid Customs broker license. “Customs business” is defined as those activities involving transactions with Customs concerning the entry and admissibility of merchandise, its classification and valuation, the payment of duties, taxes, or other charges assessed or collected by Customs on merchandise by reasons of its importation, and the refund, rebate, or drawback of those duties, taxes, or other charges. “Customs business” also includes the preparation, and activities relating to the preparation of documents in any format and the electronic transmission of documents and parts of documents intended to be filed with Customs in furtherance of any other customs business activity, whether or not signed or filed by the preparer. The broker acts as the agent between the shipper, the consignee, Customs and other government agencies. It is the broker’s job to be sure that the importer of record is in compliance with all laws and regulations. Because all customs broker in Ukraine must have a valid license, so the first question to ask is whether your broker possess a license for providing customs brokerage services? Does he have the right to make entry under the Customs Regulations? How many Certified Customs Specialists does he have on staff? Will one of these individuals be handling your importations? Additionally, Customs brokerage services in Ukraine are subject to mandatory insurance. Ask whether your broker has duly insured its commercial activity against third party claims and maintains it valid.

2. Does your broker have a specific area of expertise? Does he have experience with and current knowledge of the goods that will be imported by you? Can he provide you with some references from clients who import the same or similar items? Has he developed reliable procedures to maintain and produce the required entry documentation and supporting information? Verify that the broker has the most recently issued Harmonized Tariff Schedule and specialized customs software to prepare required documentation.

3. Ensure your broker provides the service level your company requires. If you need 24/7 support with 2-hour on-site response, don’t settle for less. Standing behind the customer and meeting unexpected business needs throughout and after customs clearance process should be required.

4. How will you work together to develop a compliance plan to clarify responsibilities and minimize exposure to administrative monetary penalties? Has a responsible, knowledgeable dedicated specialist within your broker’s organization review documentation to assure that it is full, complete and accurate? Does your broker have a reliable method to assure that you receive copies of the information submitted to customs, that it is reviewed for accuracy, and that customs is appraised of needed corrections in a timely fashion?

5. The Customs broker is a highly knowledgeable professional. Customs brokers must possess thorough knowledge of tariff schedules and Customs Regulations and must also keep abreast of the amendments made through constant changes in legislation and administrative regulations. The Customs broker must be well versed in determining proper classifications and dutiable value and be fully aware of the vast number of commodities subject to quota and other admissibility requirements. The Customs broker’s base of knowledge must also encompass the requirements of more than 40 governmental agencies. How does your broker let clients know of regulatory changes that affect the goods they import or export? Does he have access to the State Customs Service of Ukraine website or other research service that provides the information to help you establish reliable procedures and facilitate compliance with law and regulations? Is he a member of any Ukrainian customs brokers association? If so, is he subscribed to their e-mail newsletter that provides timely, up-to-date operational and policy information from State Customs Service of Ukraine and other resources? Have any penalties been applied by the customs authorities to the broker?

6. Because the speed of customs clearance is critical ask whether the broker participates in customs electronic declaring program, which helps to submit pre-arrival cargo control documents and cargo customs declaration (single administrative document) electronically. Can he communicate electronically with you, your vendors, carriers, State Customs Service of Ukraine, and other government departments? What has his company done to prepare for the new State Customs Service of Ukraine programs that require advance electronic communication of data? How can he help you prepare and comply with these requirements?

7. Paying a customs broker will not relieve the importer of his liability for customs charges (duties, taxes, and other charges) should those charges not be paid by the broker. Ask how the broker can make some mandatory payments on your behalf? Will he require a deposit from you to cover duties and taxes?

8. Ask for a detailed breakdown of costs and all possible payment options. What are his charges based upon? What are your billing options? Is there a minimum or maximum fee, flat rate, etc?

9. In the long run expect success but be prepared to fail, so always have plan B. Many disputes with tax or customs authorities arise during importation or exportation of goods. If customs determines that the goods are different from the entered descriptions in quantity or value, that the classification of the goods is incorrect, or that a different rate of duty than the one indicated by the importer applies, an increase in duties may be assessed. If customs determines that the importer has deliberately failed to properly classify and value his goods, he may be liable for a fine, or even confiscation of goods and/or vehicles. Ask if you encounter any problems with customs or tax authorities in relation to classification and coding, determining country of origin or customs valuation of the imported/exported commodity, denials in customs clearance, or initiation of criminal or administrative proceedings for breach of customs rules, can your broker provide you with professional advice and represent in disputes with such authorities in the process of administrative review or in courts?

10. Ask what information he has concerning importing to Ukraine that you can provide to your suppliers? Can he provide you with a regular report that details your EXIM history? Can he help you or your suppliers properly draft the following documents in order to clear merchandise in Ukraine:

• Contract and specifications;
• Commercial invoice;
• Packing lists;
• International transportation documents (air waybill, ocean bill of lading, rail consignment note or truck CMR);
• Certificate of origin as needed, and
• Other documentation as specified.

Wrapping up

Thus, to achieve a win-win situation, determine the right broker through careful and detailed analysis. You should thoroughly investigate each option until you find the one that most closely meets your business needs, both in terms of price and quality. Otherwise your entire import project can be derailed.