What do "experts" not take into account when drawing conclusions about smuggling flows solely on the basis of customs statistics? This is stated in the article by Acting Head of the State Customs Service of Ukraine Serhiy Zvyagintsev, UNN reports.
"One of the arguments that is repeatedly cited in support of large-scale smuggling of goods is the excess of the value of foreign exports over the value of the corresponding Ukrainian imports with certain countries. In the context of the border blockade, the focus of attention has been on Ukrainian-Polish trade relations, so misconceptions about the illegal crossing of the border by goods are now largely based on the volume of mutual trade with this neighboring country," Zvyagintsev writes.
He cites data from the European Statistical Agency Eurostat, according to which in 2023, Polish exports of goods to Ukraine amounted to $12.3 billion in terms of dollars. THE AMOUNT OF EXPORTS TO UKRAINE WAS $12.3 BILLION. At the same time, according to the official data of the State Customs Service of Ukraine, imports of goods from Poland amounted to USD 6.6 billion.
"We have a difference of over USD 5 billion. This difference can sometimes be called "smuggling" or "black" or "gray" imports. It is noteworthy that the situation is similar with all EU countries bordering Ukraine: Romania (exports - USD 2.7 billion, imports - USD 1.6 billion), Slovakia (exports - USD 2.0 billion, imports - USD 1.8 billion) and Hungary (exports - USD 3.2 billion, imports - USD 1.6 billion)," the acting Head of the State Customs Service points out.
The discrepancy also has a flip side
For some reason, however, no one mentions other countries that are members of the European Customs Union, which have consistently shown exports to Ukraine that are lower than their corresponding imports.
According to similar Eurostat data for 2023, these countries are:
Italy - exports to Ukraine amounted to USD 1.8 billion. Ukraine's imports from Italy amounted to USD 2.3 billion;
France - exports to Ukraine amounted to USD 1.2 billion. Ukraine's imports from France amounted to USD 1.8 billion;
Bulgaria - exports to Ukraine amounted to USD 1.0 billion. Ukraine's imports from Bulgaria amounted to USD 2.2 billion;
Greece - exports to Ukraine amounted to USD 0.9 billion. Ukraine's imports from Greece amounted to USD 1.4 billion.
The situation is similar with Spain, Belgium, Portugal, Ireland, Luxembourg, Malta, and Sweden, where the volume of mutual trade is somewhat lower.
"Export data includes goods of both domestic and foreign origin, while import data is generated exclusively by the country of production," emphasizes Zvyagintsev.
Returning to Poland, he also notes that in 2023, according to the customs statistics of Ukraine, goods worth USD 13.7 billion were exported from Poland to Ukraine "by country of departure". This is already correlated with Eurostat data, including by weight (6.6 million tons of Polish exports versus 6.7 million tons of Ukrainian imports from Poland).
According to Zvyagintsev, of these, goods originating from Poland amounted to only $2.7 billion. US DOLLARS. Another 3.7 billion dollars. Another USD 7.7 billion are goods where the country of origin is declared to be the EU or the country of origin is "unknown". These are the goods that are considered Ukraine's statistical imports from Poland according to the internationally accepted methodology.
Additionally, in 2023, goods originating from other EU countries were exported to Ukraine from Poland for USD 2.6 billion. USD and in the amount of 4.7 billion USD. In addition, Ukraine exported goods originating in third countries, which are accounted for in Ukraine's imports by their countries of origin.
"So, basically, the solution to the discrepancy lies in the fact that according to the methodology, statistical exports consist of exports of goods of own origin and re-exports of goods originating from third countries," Zvyagintsev writes.
He gives an example that when exporting goods from Poland to Ukraine, shipments of goods from Poland are taken into account, regardless of the country of origin declared (Poland, China, Germany, etc.). At the same time, import data is generated by the country of origin (production) of goods, not by the country of shipment. In other words, goods originating from China but shipped from a warehouse in Poland are accounted for in Ukraine as goods from China.
Zvyagintsev adds that today, electronic services allow an entrepreneur, for example, from France, to arrange the export of goods to Ukraine in Poland, practically at the border, without leaving his office. At the same time, in the EU, these goods will be accounted for as exports from Poland to Ukraine at the place of customs declaration, while in Ukraine they are considered imports from France according to the country of origin.
Other objective reasons for discrepancies in statistics
Another reason for the discrepancies in customs statistics, as explained by the acting Head of the State Customs Service, is the different currencies in which the data is generated. In EU countries, it is the euro, in Ukraine, it is the US dollar. The difference in currency conversion significantly affects statistical indicators.
"An equally important factor in the discrepancies is the significant amount of humanitarian aid sent to Ukraine. In EU countries, including Poland, humanitarian cargo is often cleared by filing a customs declaration for export to Ukraine. And in Ukraine, it is done by filing a simplified customs declaration, which does not even provide for information on a clear nomenclature of goods and their value, and therefore is not taken into account in statistics on imports of goods from "donor countries" such as Poland or the Baltic states.
Therefore, there is no "glaring" discrepancy between the customs statistics of Ukraine and Poland. There is a lack of awareness of these issues," Zvyagintsev said.
According to him, in general, interstate comparison of customs statistics on mutual trade and identification of the causes of discrepancies between them is a whole range of measures that requires significant time spent by qualified specialists. Therefore, only a limited number of customs offices around the world have conducted such comparative data analysis.
The place of smuggling in the discrepancy between customs statistics
At the same time, Zvyagintsev writes that the number of attempts to smuggle goods on both sides of the border detected by customs officers leaves no doubt about the existence of smuggling flows.
"The State Customs Service of Ukraine is constantly convincing the customs authorities of the EU member states of the need for a comprehensive approach to combating "goods smuggling". We focus on the exchange of pre-clearance information. After all, obtaining online information about cargoes and vehicles that have cleared customs in the country of departure and are heading to Ukraine is of great importance for risk analysis and combating customs offenses.
So far, there has been no significant progress in making a systemic decision at the European Commission level to establish such an exchange on a regular basis. At the same time, with the participation of European Commission projects, a pilot project on the exchange of preliminary customs information with Romania was implemented in 2023. In addition, we are cautiously optimistic that such an exchange with Poland will be established in the near future. The creation of tools for this was discussed during a recent meeting of the customs administrations of Ukraine and Poland.
At the same time, it should be noted that the economic basis for the illegal movement of goods is, in most cases, the possibility of selling such products on the domestic market at a lower price than those imported legally.
Therefore, effective control over the legality of origin and movement of goods in the domestic market is the way that will lead to the loss of economic feasibility of smuggling goods," explains the acting Head of the State Customs Service.
Zvyagintsev also said that a specially created working group of customs and tax authorities is working in this area, monitoring taxpayers' financial and business operations and assessing their tax risks. Such comprehensive measures are aimed at preventing the minimization of tax liabilities within the country, including when selling imported goods.