Ukraine’s energy customs unit disappears, reappears
InMarch 2014, shortly after Ukraine’s Euromaidan Revolution, the Finance Ministry issued an order to re-create a separate energy customs body under the State Fiscal Service. The state agency was originally created under President Viktor Yushchenko in 2005, but liquidated under President Viktor Yanukovych in 2011.
But in October 2015, the Head of State Fiscal Services, Roman Nasirov, announced his intention to liquidate the agency once again. So what is going on? Located far out of Kyiv’s city center, Ukraine’s energy customs receives little attention from the press and its existence is largely unknown to the wider public.
It’s an entirely centralized and separate customs authority that works exclusively with gas and oil products. The regional outposts report directly back to the main office in Kyiv, not to the larger regional customs authorities, and the data is not shared.
The main reason for having a separate energy customs is to ensure the upmost professionalism, according to its acting head, Ihor Pikovsky: “Why train 9,000 people? It’s better to train 200,” he told the Kyiv Post.
25 percent of revenues Pikovsky, who took office on Aug. 31, has been one of several temporary heads of the agency since its re-creation in 2014. When asked why there had been so many staff changes and what exactly was going on at the agency, Pikovsky told Kyiv Post that he “didn’t know anything.” He couldn’t even say who had last held the post, and the information is not publicly available.
Considering that the agency accounts for more than 25 percent (Hr 5.5 billion, or $220 million) of the total customs revenues raised in the country, according to Pikovsky, the non-transparency of its operations and lack of consistent management is surprising.
Serhiy Kuyun, the director of A-95, an energy consulting group, told the Kyiv Post that when the agency was first introduced it was very popular with businesses, as it had developed a specific approach to energy products, something Ukraine used to lack. However, he says that now it's not as necessary for them to be separate.
The constant change in leadership of the energy customs, says Kuyun, is down to infighting "between officials who want to work with those goods."
Anatoliy Makarenko, the former deputy head of the State Fiscal Service from March 2015 to April 2016 and its head between 2009 to 2010, told the Kyiv Post that under Yanukovych it was liquidated and that the sphere had come under the control of the Ministry of Taxes, de facto the State Fiscal Service, to help corrupt schemes.
Makarenko alleges that between January 2013 and February 2014, 2 million tons of diesel and oil products that came through Ukrainian customs were falsely classified as being for re-export. This meant that no customs duties were paid on the products. But instead of being transited out of the country, the oil products were delivered to various destinations within Ukraine. According to Makarenko, when he took office and the energy customs was reintroduced, this practice stopped.