Ukraine PM proposes foreign private management of customs

Prime Minister Arseniy Yatsenyuk ordered on June 24 the Finance Ministry and State Fiscal Service to introduce a pilot project to transfer management of the most corrupt customs checkpoints to foreign companies. “To this day, the main (corruption) schemes at customs remain in place, which is costing us billions,” he said in a presentation of institutional reforms at the State Fiscal Service.

Yatsenyuk also proposed dissolving the state tax police in favor of a financial investigations service “that is demilitarized, has strong analysts and doesn’t run to take bribes but comes around rarely, but effectively,” he said. The prime minister called for the parliamentary coalition to support the bill replacing the tax police with an investigations service, which was developed by the Finance Ministry, alongside the State Fiscal Service.

Yatsenyuk asked the State Fiscal Service leadership “to totally replace” its regional directors, stressing the need for reforms to be deep and all-encompassing, rather than cosmetic. He gave the leadership three months to introduce significant changes in its work “so that taxpayers felt the next tax culture,” he said.

Zenon Zawada: Admittedly, it’s a poor state of affairs when a government can’t run its own customs checkpoints effectively. Outsourcing to foreign companies could very well be the solution to not only this government body, but numerous others, perhaps even the “financial investigations service.” Without having details, it’s not clear just how a new investigations service will be more effective than the tax police, particularly if a state tax inspection already exists.

If corruption schemes remain place, then the question emerges of why has it taken so long to call for replacing local directors of the State Fiscal Service. Another question emerges of why aren’t the top directors in Kyiv also being considered for replacement (with the exception of State Fiscsal Service Head Roman Nasirov was appointed in May after alleged corruption by his predecessor). In addition, if corruption schemes are costing the state billions in hryvnias, then the question is why isn’t anyone being prosecuted and convicted.