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Corresponding author:
1 Lviv Regional Institute of State Administration 
of the National Academy of State Administration 
under the President of Ukraine, Ukraine.
2 Lviv Regional Institute of State Administration 
of the National Academy of State Administration 
under the President of Ukraine, Ukraine.
E-mail: 88dym88@gmail.com
ORCID: http://orcid.org/0000-0003-1901-9177

DOI: https://doi.org/10.30525/2661-5150/2020-2-1

REFORMATION OF CUSTOMS SERVICE OF UKRAINE  
TO ACHIEVE THE GOALS OF SUSTAINABLE DEVELOPMENT

Yevhen Borshchuk1, Yurii Dumiak2

Abstract. The objective of the article is a systemic analysis of the approaches to reformation of the customs 
sphere, determination of the role of customs service in the process of ensuring a sustainable development 
under the present-day conditions. Eurointegration strategy of Ukraine necessitates the need for reformation 
of the national customs system in order to conform to the standards of the World Customs Organization and 
the perspective adaptation to the European requirements, elaboration of the development strategy with 
the purpose of integration with the developed countries of the world, harmonization of economic trade and 
ecological processes. Methodology. In the course of this analysis the customs service was considered as a 
complex open system with application in the research of the methodology of systemic analysis, which allowed 
to put emphasis on separate aspects of the specific character of its functioning. Results. In any country, customs 
service is an integral part of the system of state administration of the foreign economic activity, one of the 
important state institutes of social and economic processes administration. It ensures the balance of interests 
of all participants of international trade enshrined in the current conventions and agreements on the level of 
the international law. Modernization of the national customs system under the conditions of the European 
integration processes has to become an important mechanism of social and economic development and 
international collaboration of Ukraine. Under the present-day conditions customs service plays an important 
role in the achievement of goals established by the UN in the sphere of sustainable development till 2030. 
Some of these goals are directly connected with the strategic mission of the customs service and that is why 
it is important to ensure appropriate conditions for functioning of the customs service for the successful 
accomplishment of the tasks of sustainable development in the social, economic and ecological spheres.  
The key priorities of activities of the national customs system must ensure accomplishment of the main tasks 
of the customs authorities in the context of achieving the goals of sustainable development formulated by 
the World Customs Organization: formation of the favorable, safe, just and sustainable business environment 
for economic growth, ensuring social justice, facilitation of improving stability of the global, national and 
regional ecological systems and combating the climate changes. Practical implications. The performed analysis 
of particularities of the customs system functioning and its objectives allows to determine the role of the 
customs service in the achievement of the Goals of sustainable development till 2030, to highlight the key 
priorities in resolving the environmental problems, to form the potential of sustainable development. For 
Ukraine these are modernization of national society and minimization of consequences of existence of the 
corruption schemes. Value/originality. The use of the systemic analysis allows to detect the main problems in 
functioning of the customs service taking into consideration the specific character of its functioning under the 
present-day conditions. 

Key words: customs service, sustainable development, goals of sustainable development, system analysis, World 
Customs Organization.

Jel Classification: E42, Q01



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1. Introduction
Social and economic transformations taking 

place in the Ukrainian society in the beginning of 
the 21st century are accompanied by complicated 
and controversial processes: transformation of 
policy making organs, reformation of economic 
foundations of functioning of the national economic 
system, profound changes in the role of the state 
institutions in regulation of social relations, growing 
social inequality. All this is taking place against the 
background of the global processes of economic 
integration of the states, which predetermines the 
need for the formation of effective tools for regulation 
of the social and economic development and 
optimization of functioning of the state regulation 
in various spheres, particularly, in the customs 
sphere. As the researchers point out, substantial rise 
in the scale of turnover of commodities between 
Ukraine and other countries against the background 
of economic slowdown under the conditions of 
pandemics fuels up withdrawal into the shadows 
in the sphere of customs-legal regulation of foreign 
economic relations, which causes tremendous non-
receipt of payments to the budget.

Eurointegration strategy of Ukraine necessitates 
improvement of the customs system in accordance 
with the standards of the World Customs 
Organization and the perspective adaptation to 
the European requirements. Modern challenges 
for Ukraine explained by the growing scale of 
globalization necessitate elaboration of the strategy 
of social and economic development aiming at 
integration with the developed and economically 
successful nations of the world and harmonization 
of the diverse processes in foreign sphere – economy, 
trade, legal arrangements, etc. Integration of Ukraine 
into the global economic system necessitates 
selection of the effective foreign economic policy 
that in many respects depends on the structure 
and character of functioning of the customs sphere 
(Melnyk, Todoshchuk, Adamiv, 2018).

The problems of functioning of the customs system 
and principles of formation and implementation of 
the customs policy and customs activities draw more 
and more attention of scientists and experts, analysis 
of the various aspects of development of the customs 
affairs is an inexhaustible subject of research for the 
leading scientists. The majority of the Ukrainian 
researchers are of the opinion that the pressing 
problem of modernization of the national customs 
service is absence of a quality state strategy of the 
customs service development that would clearly 

identify the top-priority goals of its functioning 
in the long-term perspective and then transform 
into specific tactical measures for implementation 
of such strategy (Martynyuk, 2010). The internal 
and external constraining factors of development 
of the state customs service are also insufficiently 
studied. In general, scientific research of these 
problems is rather multifaceted but the direction 
of strategic development of the customs sphere in 
the context of transition of the national economy 
to the principles of sustainable development has 
not been studied sufficiently. The objective of this 
article is to conduct analysis of modern trends in 
the improvement of administration of the customs 
component in Ukraine, to assess the impact of the 
customs service on sustainable development taking 
into consideration the determinant of the global 
environment.

2. Sustainable development concept
Strategic tasks of civilizational development have 

been formulated in the sustainable development 
concept approved at the United Nations Conference 
on Environment and Development (Rio de Janeiro, 
1992) the main trends of which were outlined by  
the Millennium Goals and the Sustainable 
Development Goals for the period after 2015. The 
UN, proceeding from the analysis of execution of 
the tasks to achieve the Millennium Goals by its 
Resolution 70/1 dated September 25, 2015 adopted 
by the UN General Assembly “Transforming 
our world: the 2030 Agenda for Sustainable 
Development” approved the agenda in the sphere of 
sustainable development in the period after 2015. 

The feature of the Sustainable Development 
Goals till 2030 is a considerable attention to the 
growth of creative and innovation potential of 
international business in the context of meeting 
challenges of sustainable development. The World 
Customs Organization has formulated the main 
tasks of the customs authorities in the context of 
achievement of sustainable development aiming at 
the formation of favorable, safe, just and sustainable 
business environment for economic development. 
This will permit enterprises, especially micro-, 
small and medium enterprises, to expand their 
spheres of activities and create prerequisites for 
a more active participation in the global trade. That 
is why the pressing problem becomes the problem 
of identifying the meaning, place and role of the 
customs control, improvement of functioning of 
the customs system in the formation of financial 



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resources of sustainable development (World 
Customs Organization, 2018).

3. Customs as the state  
administration institute

Throughout the entire period of the formation 
of modern civilization, the customs has been 
and remains one of the most essential factors 
of statehood and independence of any country, 
its financial sovereignty. The customs system is 
a component of the primary principal features 
of an independent country that necessitates the 
construction of the effective national customs 
system. It has always been one of the key factors 
of functioning of the state ensuring its national 
security and economic interests of the country. 
To assess activity of the customs, first of all, it is 
necessary to determine its place in the system of 
the state institutes that control social and economic 
processes. As a part of the economic system of the 
country the customs, aside from the performance 
of its traditional functions of administration in 
the sphere of taxation and regulation of foreign 
trade, also acts as a social and economic institute 
where the customs service is demonstrated in the 
form of a special state service. The peculiarity of 
provision and consumption of the customs services 
is their rigid legislative regulation – the list of the 
rendered customs services is limited by the tasks 
and functions of the customs authorities, while 
the number and quality of the services is regulated 
by the law (Berezhnyuk, 2002; Lypovska, 2005). 
Customs administration must observe the balance 
of interests of all participants of foreign trade in its 
activity (first of all, social and economic, legal and 
other interests of its country, society), enshrined in 
the current conventions and agreements – on the 
level of the international law taking into account 
the national interests by way of (Pashko, 2004):
– creation of the conditions (legislative, norma-tive 
legal, technological, communication, infrastructu-
ral) that do not prevent lawful trade and crossing 
customs borders by transport, cargoes, passengers;
– reconcilement of the national and international 
trade and customs legislation and the tax policy 
regulating foreign economic activity;
– collaboration with the world community, relevant 
bodies inside the country in the joint struggle with 
arms trafficking, smuggling of drugs and other 
prohibited, dangerous for human health goods and 
cargoes, that inflict environmental harm as well as 
with commercial fraud;

– recognition of justifiability and eligibility of the 
measures taken to protect the internal market 
and domestic commodity producers from foreign 
economic expansion by the world trade community 
and individual foreign trade partners, and from 
the policy of discrimination of commodities 
manufactured by the national producer.

The main tasks of the customs service include 
(State Customs Service, 2019):
– correct application, steadfast observance and 
inadmissibility of non– implementation of the 
requirements of the laws of Ukraine pertaining to 
the state customs service;
– performance of obligations envisaged by the 
international agreements of Ukraine on the 
state customs service in accordance with the 
requirements of laws;
– ensuring customs control and execution of 
customs formalities pertaining to the goods, 
commercial transport vehicles crossing the customs 
border including those that do it on the basis of 
electronic documents (online customs filing) with 
the aid of technical control means, etc.;
– collection of customs payments, control of correct 
calculation, timeliness and completeness of their 
payment, taking measures for their recovery by 
enforcement if needed, organization of applying 
guarantees to ensure collection of customs payments;
– control of the observance of rules for transfer of 
currency valuables;
– protection of the intellectual property rights, 
taking measures to prevent transfer of commodities 
across the border if this is done with violation of 
the intellectual property rights;
– prevention and struggle with smuggling, 
combating violation of the customs rules on the 
entire customs territory of Ukraine;
– control of the activity of enterprises rendering 
services for declaration of goods, movement and 
warehousing of goods transferred across the border 
or that are under customs supervision, and carrying 
on operations with such goods; issuance of permits to 
carry on the mentioned types of activities; issuance of 
the certificates of the authorized economic operator;
– verification (authentication of reliability) of the 
certificates of origin of the goods from Ukraine 
and issuance of the certificates of origin in the 
established cases;
– application of measures envisaged by the law 
for the customs tariff and non-tariff regulation of 
foreign economic activity and exercising other 
powers established by the laws of Ukraine.



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The environment, in which the customs system of 
Ukraine functions, is determined by two important 
factors: the European integration processes and 
the processes of transition to the principles of 
sustainable development. The important task of 
social and economic development of Ukraine in 
the context of the European integration processes 
is reorientation of the national economy towards 
the foreign economic segment taking into account 
not only the European standards, but also the 
national interests of Ukraine and introduction of 
modern methods and levers of state regulation of 
foreign economic activity. Modernization of the 
national customs system under the conditions of 
the European integration processes becomes an 
important mechanism for social and economic 
development and international collaboration 
of Ukraine for the upgrading economic level of 
social development creating new opportunities 
for carrying on business and for interhuman 
contacts, improvement of environmental situation, 
expanding the limits of independence of local 
power bodies and strengthening local democracy.

The World Customs Organization recognized 
promotion of ensuring a sustainable future, solution 
of the tasks in social, economic and ecological 
spheres and in the sphere of health care as the 
main trends of its activity for the achievement of 
the sustainable development goals till 2030. To 
this end it is important that customs, successfully 
resolving the assigned tasks, would continuously 
increase its efforts for the effective and more active 
actions (World Customs Organization, 2020).

4. Customs system  
and Sustainable Development Goals

In contrast to the Goals of Development, the 
features of Sustainable Development Goals till 
2030 are the growing attention to the problems of 
formation of innovation potential of international 
business in the context of meeting the challenges 
of sustainable development. As noted in the UN 
documents, the Goals of Sustainable Development 
outline the global priorities of sustainable 
development and aspirations for the period till 
2030. They aim at mobilizing efforts of the world 
community on a number of common goals and 
tasks. The SDG calls on the governments, business 
and general public of all countries to act together 
on the world scale to overcome poverty and create 
decent conditions for life and opportunities for 
all on the planetary scale. The goals of sustainable 

development is a universal plan of actions for the 
flourishing of all peoples and countries of the planet 
that requires participation of all interested parties 
on the basis of partnership relations (Compass 
Guide Ukrainian, 2016).

The Goals of Sustainable Development can 
be achieved and provided only when transition 
is made to the principles of global partnership 
and collaboration in support of business. As Ban  
Ki-moon, Secretary-General of the United Nations, 
has noted in his time, “business is a vitally important 
partner for the achievement of the Sustainable 
Development Goals. Companies can get involved in it 
through their principal types of activity, and we apply 
to the companies of the entire world with request 
to assess their influence, set the ambitious goals 
and report on the results openly and transparently” 
(World Customs Organization, 2020). The national 
customs authorities in their activities must ensure:
– promotion of innovations, protection of 
intellectual property rights, prevention of 
penetration of poor quality, counterfeit and other 
goods that do not meet requirements of relevant 
standards into the national markets, enhancement 
of combating international organized crime and 
terrorism, elaboration of measures against money 
laundering, human, drugs and weapons trafficking 
and other serious crimes.
– domination of social justice and openness 
through lowering trade barriers, harmonization of 
customs activities regarding reduction of the time 
and financial costs of transporting goods across 
borders, boosting of trade, increase in earnings 
and employment, promotion of national and 
international investments.
– promotion of stability of the global, national 
and regional social and economic systems and 
struggle with the climate change by way of efficient 
performance of multilateral agreements aiming 
at combating illegal trade in hazardous waste 
and ozone-destroying substances, combating 
trade in endangered species and prevention of 
the spreading of alien species, plant and animal 
diseases, collection of carbon dioxide taxes.

In the foreword to “Green Customs Guide to 
Multilateral Environmental Agreements” executive 
director of the UN Environmental Programme Achim 
Steiner and former secretary general of the World 
Customs Organization Michel Danet note: “Today 
customs officers are aware that their traditional 
role as guardians of the trading system is evolving 
into a more nuanced one encompassing different 



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dimensions of sustainable development related to 
the well-being and protection of society. Now we 
are asking customs officers to be at the frontline not 
only for trade, but also for environmental protection 
purposes, and to contribute to the greening trade.” 
(UN Environmental Programme, 2008).

From the standpoint of transition to the principles 
of sustainable development, it is necessary to 
single out two important trends in activity of the 
customs. Environmental: ensuring execution of 
generally adopted international agreements: The 
Basel Convention on the Control of Transboundary 
Movements of Hazardous Wastes and their 
Disposal, The Cartagena Protocol on Biosafety, 
The Convention on the Prohibition of the 
Development, Production, Stockpiling and Use of 
Chemical Weapons and on their Destruction, The 
Convention on International Trade in Endangered 
Species of Wild Fauna and Flora, The Montreal 
Protocol on Substances that Deplete the Ozone 
Layer, The Rotterdam Convention on the Prior 
Informed Consent Procedure for Certain Hazardous 
Chemicals and Pesticides in International Trade and 
The Stockholm Convention on Persistent Organic 
Pollutants. For Ukraine, the role of the customs in this 
context is very important in resolving the problem 
of destructive logging. According to various data, 
forests in Ukraine occupy the area of approximately 
16-17% of total territory (about 10.6 million 
hectares), which is considerably less than the 
average index in Europe (35.4%). It is natural that 
the state policy must aim at the increase of forested 
territory. At the same time, illegal logging and sale of 
timber, plundering and smuggling of timber became 
a serious problem for Ukraine. According to the 
World Wildlife Fund, Ukraine is the world major 
supplier of charcoal exporting it to the European 
Union countries. In 2018, import of charcoal from 
Ukraine attained 22% of total volume of logging. 
To this end, according to Johannes Zahnen, Senior 
Forest Policy Officer of WWF Germany, starting 
from the date of prohibition of export of round wood 
from Ukraine the state has almost doubled export of 
charcoal in two years. According to the survey of the 
British non-governmental organization Earthsight 
studying the problems of illegal logging in the 
world, in 2018 Ukraine became the major exporter 
of illegal wood to the European Union. Ukrainian 
commercial timber under the guise of firewood is 
sold to the European wood processors who produce 
furniture, flooring, panels and other products out of 
it. It is profitable for the European entrepreneurs – 

they save their forests, buy cheap Ukrainian timber, 
process it and receive added value, jobs and taxes 
(Ukrainian Universal Exchange, 2020; State Forest 
Agency, 2020). Without any special calculations it 
is fair to say that modernization of customs service, 
elimination of the corruption element in the customs 
processes will essentially diffuse the problem of 
logging in the Ukrainian forests.

Financial sphere of activities of the customs, 
under which we understand formation of the 
financial potential of sustainable development, 
is important for the achievement of the goals 
of sustainable development on the basis of the 
considerable financial flows that pass through the 
customs by way of legalization of their movement. 
Generally speaking, financial potential is one of the 
key elements of sustainable development. In the 
most general case, financial potential of sustainable 
development is interpreted as a totality of financial 
opportunities for the development in the interests 
of socio-ecological and economic progress 
(Herasymchuk, Vakhovych, Kaminska, 2006).

Financial opportunities for the growth of receipts 
to the budget from the customs are tremendous. 
In 2018, the volume of smuggled commodities 
attained 11.9 billion USD, which is nearly one fifth 
of total volume of imports to Ukraine in 2018. 
According to some calculations, only under the 
scheme of “suit jackets” (shuttle passage of the 
residents of near-border regions), Ukraine loses 
about 700 million EUR per year. Direct losses of the 
budget from smuggling through the short-received 
mandatory payments are estimated at 3.2 billion 
USD, losses in the domestic market are twice the 
size of that (Kravchenko, 2019).

Like in the case of the environmental trend in its 
activity, the main task of the customs towards the 
increase of its contribution to the formation of the 
financial potential of sustainable development is 
putting things in functioning of the customs system  
in good order. The customs must not be an instru-
ment for serving interests of certain oligarchic clans, 
but an effective mechanism ensuring accomplishment 
of social and economic development of the state.

5. Conclusions 
Thus, following the analysis of the goals and the 

specific nature of functioning of the customs system 
it will be fair to say that customs is capable of making 
a sizable contribution to the achievement of goals of 
sustainable development both on the global and on 
the national levels. Under the present-day condition 



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the traditional role of the customs in supporting 
foreign economic activity is supplemented with the 
role of an essential factor in resolving environmental 
problems that have no borders, and its growing 
role in the processes of formation of the financial 
potential of sustainable development.

The establishment and development of the 
customs system of Ukraine is taking place under the 
conditions of complicated transformation processes 
that involve all spheres of vital activities of the state. 
The customs service serves to a certain extent as 
an important mechanism of social and economic 
development and international collaboration of 
Ukraine, it creates certain opportunities for the 
conduct of business. At the same time the customs 
sphere almost more than all other state institutions 
encounters the effects of the corruption schemes 
that in no small degree distort functioning of the 
customs system.

It is common knowledge that Ukraine possesses 
a great amount of various natural and human 

resources on which foundation it is possible to form 
a tremendous potential of sustainable development. 
To resolve the problem of potential sustainable 
development formation, for Ukraine the need to 
create the appropriate institutional conditions 
becomes prior. Very often the functioning state 
institutions by their activities protect interests of 
separate industrial-oligarchic groups but not the 
public interests, which can be seen from the work 
of the customs authorities of Ukraine.

Transition of the national economic system 
of Ukraine to the principles of sustainable 
development necessitates a radical upgrading 
of the national social and economic system 
within the framework of general civilizational 
processes of social development. The basis of such 
upgrading must become consolidation of the role 
of the civil society in the processes of sustainable 
development, ensuring transparency in activities of 
the state institutions, elaborating strategy and goals 
of sustainable development till 2030.

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