The Customs Group of KPMG in Ukraine was formed just a few months ago, however, it has already achieved significant results. In an interview, Vitaliy Naumenko, Manager of the Customs Group, discusses recent results and future plans.
Vitaliy, why was the Customs Group created?
The regulatory framework governing the activities of customs bodies of Ukraine has changed over the past two years. In particular, a number of laws, decrees of the Cabinet of Ministers of Ukraine, as well as orders of the customs service, which greatly enhanced the role of customs both during the customs control and audits of companies for their compliance with regulations on customs clearance of goods. In other words, today, quite a solid set of tools is used to effectively carry out audits of companies and to collect unpaid taxes and penalties in cases of violations.
These are basic customs risks, which should be taken by companies’ management into account both at the planning stage, and when directly moving goods across the border. We believe that, to provide a comprehensive support to our customers, we need to address all the procedures relating to the movement of goods across the customs border of Ukraine and their clearance. And this is the area, where our professional experience can be helpful to our customers.
What are the problems most commonly faced by enterprises in this regard?
In the process of customs clearance, companies often run into several barriers that result in time losses and costs. For example, during the examination of goods, the Customs house may decide to increase the customs value, to determine a different products code, not to accept information on the country of origin, etc. Thus, the ultimate tax payments, which must be paid to the state budget, may well exceed the amount of the customs duties originally expected by the company. In this regard, questions may also arise about possible violations of customs rules.
Your group has existed for just three months. What achievements can be noted at this stage?
First of all, I would say that the practice of providing services on customs regulation at KPMG has existed long enough and developed successfully. Given the significant increase in demand for these services, a separate Customs and International Trade Group was created.
I would like to note that we are actively involved in the work of the American Chamber of Commerce in Ukraine: we participate in the meetings of the Customs Committee of the Chamber and in drafting decisions and proposals. For instance we initiated a meeting held to discuss a new version of Draft Customs Code of Ukraine. The meeting discussed innovations embodied in the latest version of the Draft and the problematic issues relating to this document. As a result, the American Chamber of Commerce in Ukraine’s opinion of the Draft Code was formulated, which was sent to the relevant Committee of the Verkhovna Rada of Ukraine.
Participation of our professionals in the preparation of the Draft Customs Code is not accidental. This document is of high interest for the companies since the efficiency of their foreign economic activities will depend on their compliance with international rules and regulations. The ultimate objective of our participation in this process is creation of prerequisites for the preparation of a document that would meet the international standards. In this regard, we also cooperate with the Committee of the Verkhovna Rada of Ukraine, the Reformatory Club at the Cabinet of Ministers of Ukraine, and other organizations. We are pleased to say that our numerous suggestions were taken into account in the wording of the Draft Customs Code of Ukraine adopted in the first reading.
Quite recently, we conducted a seminar "The Customs Value of Goods: Problems and Prospects" for the Chamber members. Despite the holiday season, the event was attended by many members. The participants discussed problematic issues, arrived at solutions and identified the issues the businesses are unhappy with, which should be eliminated in the future Customs Code of Ukraine.
In the two months working at the committee of the American Chamber of Commerce, I was elected as Secretary of the Customs Committee at the American Chamber of Commerce in Ukraine. By joining the management of the Committee, we are able to realize our potential and to help our clients in lobbying their interests.
Since the establishment of the Group, our team has participated in several successful client projects. In particular, we prepared a number of major companies to entering Ukrainian market - from company incorporation to analysis of the tax consequences of its operations. The practice of conducting customs reviews of companies based on their performance results for the period is being successfully developed. The purpose of this review is to identify customs risks that may arise when companies are audited by the customs authorities, as well as to provide recommendations as to how to eliminate or minimize the identified risks. Other actions aimed to protect the interests of companies in the process of goods clearance were also taken.
What is the exclusivity of our practice in comparison with similar competitors’ practices?
As far as I know, only KPMG Customs and International Trade Group employees have solid professional experience in the customs system of Ukraine, in contrast to other “Big Four” companies in Ukraine. Professionals of our Group have 8-15 years of experience of working in customs authorities. We can apply the attitudes and approaches used by the customs officers, as well as to predict possible developments, anticipate obstacles that may arise on a company’s way. And, therefore, we can offer comprehensive and efficient solutions to overcome all the pitfalls in the process of customs clearance of goods. In addition to Kiev, we have established offices in Donetsk and Lviv, greatly expanding the geographical scope of our clients.
In summary, I would like to note that today KPMG in Ukraine has sufficient experience and resources to provide quality services in the area of customs regulation. In addition, our ability to provide full range of legal and tax services makes us a reliable partner for our customers.