Institution of Authorised Economic Operator – how it would work?

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A meeting of the Committee of Customs Affairs of the Public Council of the Ministry of Revenues and Duties of Ukraine (MRDU) took place on 4 February 2014. One of the most important questions for discussion was the draft of the Order of the MRDU “On Status of the Authorised Economic Operator”.

Oksana Drozach, a customs practice specialist with PwC, gave a presentation on the basic differences between the system of conducting checks to entitle AEO status under the proposed draft of the Order and the widely used EU practice of conducting similar checks.

The draft of the Order, which has been placed on the MRDU’s website since 15 October 2013, contains provisions for conducting physical checks and documental audits during preliminary checks to obtain AEO status. However in practice, the primary aim of such documental audits is to access additional taxes. Therefore, such audits will be additional instrument of pressure on an AEO applicant.

The EU practice shows that the main issues for estimation and analysing during the preliminary checks of applicants for AEO status should be the following:

  • business process of the company;
  • safety of information and accounting records;
  • financial position of the company;
  • internal control system;
  • system to check business partners and employees.

As a result of the meeting, the Committee decided to make Oksana Drozach the coordinator for preparing a proposal to improve the draft of the Order of the MRDU “On Status of the Authorised Economic Operator” and the person responsible for cooperating with the MRDU on this issue.