Ukraine is an open economy, with a significant share of its GDP driven by external demand, while imports of goods and services play a crucial role in budget revenues.
Before the full-scale war, foreign trade in goods and services accounted for 80% of GDP (2021), and even during the war, it remained at above 50% (64% in 2023). In 2024, revenues from imports (excise duties, customs duties, and VAT on imported goods) constituted one-fifth of the state budget revenues.
Therefore, the efficiency of institutions, particularly customs authorities, trade regulation mechanisms, and logistics infrastructure, directly impacts the country’s ability to generate foreign currency inflows, attract foreign investment, and secure resources for post-war recovery.
Over the past decade, reforms in international trade have focused on implementing the Association Agreement with the EU (signed in March-June 2014) and the Deep and Comprehensive Free Trade Area (DCFTA) Agreement (effective since January 1, 2016). These efforts aimed to align Ukraine’s and EU regulations, expand market access, and strengthen the position of Ukrainian producers in the global market.
The trade-related reforms introduced since 2014 can be grouped into three major areas: customs modernization and facilitation of border crossings (including the introduction of “one-stop-shop” system), harmonization of non-tariff barriers (e.g., aligning sanitary regulations, product standards, and certification requirements with EU norms), and support for exporters (including the establishment of an Export Credit Agency). Strengthening intellectual property rights protection has played a crucial role in developing foreign trade too (see Chapter 6).
Figure 9.1. Reforms in trade across border in 2015-2024, Reform Index data
Note: The cumulative score is the sum of event scores, which are derived from surveys conducted with Reform Index experts
Reforms in 2014-2019
Signing of international treaties
As a member of the World Trade Organization (WTO) since 2008, Ukraine has adhered to its commitments in shaping and implementing tariff policies. These commitments include non-discrimination in the application of tariffs (ensuring uniform customs duties for all supplier countries, except for special regimes) and compliance with non-tariff regulations on imported goods and services. Additionally, Ukraine has maintained legislative transparency and engaged in trade dispute resolution through consultations and negotiations.
Since regaining independence in 1991, Ukraine has signed nearly 20 free trade agreements covering more than 45 countries worldwide (some bilateral agreements were annulled after signing of multilateral agreements) — see Table 9.1.
Table 9.1. List of countries with which Ukraine has signed free trade agreements
Country or Group of Countries | Date of Agreement Ratification | Document |
Georgia | May 5, 1995 | Free Trade Agreement Between the Government of Ukraine and the Government of the Republic of Georgia |
North Macedonia | July 5, 2001 | Free Trade Agreement Between the Republic of Macedonia and Ukraine |
Switzerland
Liechtenstein Norway Iceland |
December 7, 2011 | Free Trade Agreement Between Ukraine and the States of the EFTA |
CIS (Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia*, Tajikistan, Uzbekistan)
* — terminated by Russia in 2016, and by Ukraine via export ban |
July 30, 2012 | Treaty on a Free Trade Area |
Montenegro | October 16, 2012 | Free Trade Agreement Between the Government of Ukraine and the Government of Montenegro |
Austria
Belgium Bulgaria Croatia Czechia Cyprus Denmark Estonia Finland France Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Germany Poland Portugal Romania Slovakia Slovenia Spain Sweden |
September 16, 2014 | Association Agreement Between Ukraine, on One Side, and the European Union, the European Atomic Energy Community, and their Member States, on the Other Side |
Canada | The first agreement was ratified on March 14, 2017; it was superseded by a new agreement ratified on April 10, 2024. | Free Trade Agreement Between Ukraine and Canada (no longer valid)
Free Trade Agreement Between Ukraine and Canada |
Israel | July 11, 2019 | Free Trade Agreement Between the Cabinet of Ministers of Ukraine and the Government of the State of Israel |
United Kingdom | December 16, 2020 | Agreement on Political Cooperation, Free Trade, and Strategic Partnership Between Ukraine and the United Kingdom of Great Britain and Northern Ireland |
Türkiye | Signed on February 3, 2022, awaiting ratification | Draft Law on the Ratification of the Free Trade Agreement Between the Government of Ukraine and the Government of the Republic of Türkiye |
The signing of the Association Agreement Between Ukraine and the European Union marked a pivotal step in the liberalization of trade relations. One of its most significant components was the establishment of the Deep and Comprehensive Free Trade Area (DCFTA), which aims to reduce both tariff and non-tariff barriers to trade. As a result, Ukraine’s economy is gradually integrating into the EU single market. With the agreement in place, Ukraine can export goods to the EU duty-free or with minimal tariffs, although some products are subject to tariff quotas. Before the Association Agreement fully came into force in 2017, the EU unilaterally granted Ukraine autonomous trade preferences in 2014-2016. Under this regime, import duties were eliminated on 94.7% of Ukrainian industrial goods and 83.4% of agricultural and food products. The agreement also outlines the gradual opening of Ukraine’s market to European goods.
Since 2018, Ukraine has been a member of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention) — an international treaty establishing uniform rules of origin for goods traded among participating countries under free trade agreements. Thanks to the system of cumulation of origin, Ukrainian producers can use raw materials from other Convention member states (over 50 countries) while still having their products classified as being of Ukrainian origin. In contrast, goods from non-member countries may be subject to stricter import rules or higher tariffs when entering the markets of Convention participants.
Since December 1, 2023, the “origin of goods” concept is active under PEM, which simplifies the certification process by reducing the number of required documents and significantly extending the submission deadlines for them.
Rules for the cross-border transportation of goods
Ukraine has made significant progress in harmonizing its standards with EU requirements. By 2019, more than half of the technical regulations ensuring product safety were aligned, and institutions responsible for standardization and market surveillance are developing. Changes of sanitary and phytosanitary measures have improved and accelerated Ukrainian producers’ access to the European market. For example, in 2015, the Ukrainian Parliament reduced the issuance time for quarantine certificates for the import/export of plants from 5 to 1 day and required the customs service to publish a comprehensive list of quarantine-controlled items for each country. That same year, seed certification procedures and plant variety registration were aligned with EU standards strengthening intellectual property rights protection and improving seed quality in the Ukrainian market. Simultaneously, Ukraine introduced mandatory identification of livestock, a key prerequisite for Ukrainian meat products entering the EU market.
In 2019, Parliament introduced European technical regulations, enabling the recognition of results of Ukrainian product testing and certification by the EU. At the same time, adoption of European food quality standards provided Ukraine’s State Service on Food Safety and Consumer Protection the right to inspect quality control procedures in countries seeking to export food products to Ukraine.
In the services sector, a major milestone was the 2016 law on removing administrative barriers to exports. This law streamlined exports of services, particularly benefiting freelancers and IT professionals. Key changes included allowing electronic contracts, easing capital controls by replacing paper documents with bank statements, and eliminating unnecessary bureaucratic requirements, such as the mandatory translation of documents to Ukrainian.
Earlier, in 2016, the National Bank of Ukraine (NBU) allowed banks to use electronic documents to monitor foreign trade operations and lifted the requirement to obtain a “Derzhzovnishinform” certificate for imports of services. Previously, any resident willing to purchase services, works, or intellectual property rights from a non-resident for more than EUR 50,000 had to obtain a certificate from the state-owned enterprise “DerzhzovnishInform” confirming that the price of a service aligned with market conditions. Initially, this requirement was introduced to shut down a capital outflow channel. It was canceled because the NBU improved its financial monitoring system.
Unfortunately, there were anti-reforms in this sector. In 2015, the government introduced reference prices for imported goods set by the State Fiscal Service. This mechanism intended to prevent importers from declaring lower than actual prices of goods to reduce import tax obligations. However, due to lack of integrity among customs officers, importers quickly adjusted their schemes (e.g., by misclassifying their products under tariff codes for cheaper goods). This regulation was repealed in 2016.
Customs office reform
Both individuals and businesses consider customs to be one of the most corrupt institutions in Ukraine, with estimated losses due to customs-related corruption reaching USD 4-5 billion annually. Initially, the government attempted to tackle the issue using traditional methods, such as creating mobile inspection groups and a cross-regional customs service (no longer operational), to conduct unexpected border checkpoint inspections. However, these efforts failed to produce meaningful results.
The most progressive reform came in 2016 with the introduction of the one-stop-shop system for international trade. This system streamlined customs procedures and reduced cargo clearance times at the border by integrating all types of import and export controls, including customs, sanitary-epidemiological, veterinary, phytosanitary, environmental, and radiological inspections. This reform eliminated bureaucratic obstacles and significantly improved coordination among government agencies responsible for monitoring international shipments.
Like many other reforms, the one-stop-shop system did not become fully operational right away due to the insufficient digitalization of government agencies. To address this issue, in 2018, the government improved the electronic exchange of information between state authorities and businesses, mandated all customs offices to operate under the new procedure, and limited the waiting time for cargo inspections to 12 hours. Additionally, a risk-based approach was introduced for controlling goods transported in wooden or paper packaging materials. In October 2018, the single window procedures were further aligned with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and significantly simplified.
Finally, in July 2019, Parliament eliminated the need for two separate customs declarations for trade between Ukraine and the European Free Trade Area. This was an important move toward Ukraine’s integration into the EU Common Transit System, a process that the subsequent government and Parliament continued. These reforms streamlined border-crossing procedures and reduced opportunities for corruption. However, other critical elements, such as selecting honest customs officers and increasing their salaries, have yet to be implemented.
Export Credit Agency
Due to several structural factors that kept lending rates in Ukraine relatively high, including a lack of trust in the judicial system and persistent inflation, Ukrainian businesses have traditionally relied on self-financing rather than loans for development projects. Thus, the idea of establishing a specialized institution to support the financing of export contracts had been under discussion for a long time. The first step came in 2016 when the National Bank simplified access to credit for Ukrainian companies conducting import operations through foreign export-import agencies. The NBU also allowed businesses to submit electronic copies of documents instead of original paper documents.
In late 2016, Parliament passed a law creating the Export Credit Agency (ECA). However, experts from the Reform Index evaluated it negatively due to several flaws. It contradicted WTO rules, created opportunities for fraud (as the ECA was initially exempt from insurance and financial market regulations), and established a non-level playing field, limiting the range of manufacturers of goods and services eligible for ECA services. To address these issues, in 2022, the ECA was transferred from the Ministry of Economy to the supervision of the NBU. In 2023, the NBU updated the regulation of the agency’s operations, granting it the status of a special-purpose insurer.
The ECA effectively began operations in 2021. However, due to its relatively small statutory capital — only UAH 2 billion — its transaction volume remains limited (Figure 9.2).
In 2023, the ECA obtained the right to insure investments against war risks — a function previously available only through foreign organizations like MIGA, a World Bank agency. However, this type of insurance has not yet been implemented due to a lack of funding. Meanwhile, the government has provided ship owners with a mechanism to receive compensation directly from the state budget for damages resulting from military aggression if insurers refuse to cover the losses.
Figure 9.2. Activities of the Export Credit Agency
Source: Export Credit Agency
Export Restrictions
Adverse developments in international trade included the introduction of export restrictions on timber and scrap metal, which violated Ukraine’s international commitments.
In 2015, the government canceled export licensing requirements for non-ferrous scrap metal. However, since scrap metal is a valuable raw material for the metallurgical industry, domestic steel producers lobbied for export restrictions. In response, in 2016, Parliament passed a compromise law. Licensing requirements for scrap metal exports were lifted, but export duties were temporarily increased from EUR 10 to EUR 30 per ton for one year. In the same year, import duties on scrap metal were removed. In 2017, the higher export duty was extended for another year, sparking criticism from Ukraine’s European trade partners. By 2019, the export duty on scrap metal was raised even further. However, this measure did not apply to countries with which Ukraine has free trade agreements, including the EU, preventing further objections from European partners.
In 2020, Parliament significantly deregulated scrap metal operations by eliminating the distinction between “household” and “industrial” scrap, allowing cash transactions, and removing local governments’ power to oversee scrap collection businesses. These changes aimed to bring the market out of the shadows.
A much more damaging issue in Ukraine’s relations with the EU was the 10-year export ban on roundwood, which Parliament imposed in 2015. This violated Ukraine’s international commitments and caused Ukraine to lose out on a EUR 600 million macro-financial assistance tranche from the EU. In 2021, an international arbitration tribunal ruled that Ukraine must lift the moratorium. However, the restriction remains in place, awaiting the implementation of a law on timber market transparency.
The government justified the moratorium on roundwood exports by two main reasons: the need to preserve forests and create conditions for the development of the furniture industry. Our research shows that the ban did not reduce deforestation, and the growth in furniture and paper production was minimal. Moreover, these industries represent only a small fraction of Ukraine’s GDP. At the same time, exports of minimally processed wood, such as firewood and planks, increased, along with the smuggling of roundwood. Therefore, to effectively preserve Ukraine’s forests, it is essential to impose logging restrictions and establish a robust enforcement mechanism for these restrictions.
After 2019: four “visa-free regimes” for Ukraine
The main areas of Ukraine’s progress in the development of international trade are closely linked to the implementation of the Association Agreement with the EU. They can be broadly described as the four “visa-free” regimes — economic, customs, transport, and industrial.
Economic visa-free regime
The development of the economic “visa-free regime” began with the creation of the Free Trade Area with the EU and has focused on simplifying export procedures for goods and services. It includes free access to EU markets, alignment of Ukrainian legislation with European standards, and streamlined cross-border trade procedures, such as mutual recognition of product certification and harmonizing packaging, labeling, and technical standards.
Ukraine is gradually integrating into the EU Digital Single Market, facilitating e-commerce and IT cooperation. This closer collaboration includes recognizing electronic signatures and digital identification tools, simplifying cross-border electronic payments, and creating favorable conditions for developing digital services.
Since June 2020, Ukraine has implemented a customs procedure for protecting intellectual property rights that is aligned with EU regulations. This reform not only protects business interests but also serves as an important factor in attracting investment.
With the onset of Russia’s full-scale war against Ukraine, the economic “visa-free regime” gained even more significance. In May 2022, the European Union suspended import duties and quotas on a wide range of Ukrainian goods, including agricultural and industrial products. The EU also introduced “solidarity lanes” to facilitate exports of Ukrainian goods. This decision became a lifeline for Ukraine’s economy, which was struggling due to the blockade of traditional maritime logistics routes and the occupation of industrial regions. As a result, Ukraine significantly increased its exports to the EU, making the region its largest trading partner (Figure 9.3), accounting for over 65% of total trade volume.
Figure 9.3. Regional structure of Ukraine’s foreign trade in 2014-2023, %
Source: NBU
The European Commission extended the preferential trade regime for Ukrainian exports for two consecutive years. This decision was a part of the comprehensive aid package to support Ukraine during the war. However, certain agricultural products were exempt from these benefits. Despite widespread EU support for Ukraine, the preferential trade regime sparked protests among farmers in some EU countries, particularly those bordering Ukraine. Nevertheless, the transit of Ukrainian goods through these countries was allowed to ensure access to other markets. Moreover, the EU provided financial support to affected European farmers to compensate for their losses.
Currently, the Ukrainian government is negotiating not only about the preservation of preferential access to the EU market but also on amending the Association Agreement to make these trade benefits permanent.
Ukraine continues to harmonize its standards with international norms. One of the key areas of progress has been the modernization of the classification of goods for foreign economic activity. In 2020, Ukraine aligned its Classification of Goods for Foreign Economic Activity (UCGFEA) with the sixth edition of the Harmonized Commodity Description and Coding System (HS 2017). By 2023, the country had implemented the latest HS 2022 update. These changes are more than just formal updates — they include new codes for modern goods that have become part of everyday life, such as electric vehicles, smartphones, medical equipment, semiconductors, advanced electronics, and products supporting green energy development. By aligning the UCGFEA with the EU’s Combined Nomenclature, Ukraine ensures a consistent approach to product classification between Ukrainian and EU customs authorities, thereby speeding up border clearance procedures.
Customs visa-free regime
In the fall of 2019, during the so-called “turbo mode” legislative period, Parliament passed numerous previously prepared bills necessary for Ukraine’s integration into the European transit system.
One of the most significant changes was the integration of Common Transit Convention (CTC) provisions into Ukrainian legislation. This reform allows Ukraine to exchange customs information with 35 European countries, access data on goods in transit, and use a single customs declaration for moving goods between countries via the New Computerised Transit System (NCTS) — a shared IT platform for customs procedures.
In 2022, Ukraine fully joined the CTC and can now use a single transit declaration and financial guarantee to cover customs duties across all transit countries. Additionally, real-time customs data exchange between nations has been implemented. In 2023, the government allowed Ukrainian companies to use the NCTS for domestic transit, enabling businesses to complete customs procedures at inland customs offices rather than at border checkpoints.
In 2024, Ukraine became one of the first Convention member states to transition to Phase 5 of the NCTS. Customs authorities have increased the number of transit clearances (Figure 9.4), demonstrating the system’s efficiency and successful implementation in Ukraine.
Figure 9.4. Number of customs declarations processed under the NCTS, thousands
Source: State Customs Service of Ukraine
As a member of the World Customs Organization (WCO), Ukraine has committed to aligning its customs legislation with international standards, particularly the SAFE Framework of Standards to Secure and Facilitate Global Trade. Additionally, under the EU Association Agreement, Ukraine has pledged to implement the provisions of the EU Customs Code. One of its key provisions is the introduction of the Authorized Economic Operators (AEO). This initiative will simplify customs procedures for businesses that meet reliability, transparency, and legal compliance criteria.
The first steps in this direction were made as early as 2012 when Parliament adopted a new Customs Code of Ukraine, which included a separate Chapter on AEO status. However, the mechanism was not implemented in practice due to a lack of sub-legal acts and relevant institutions. Between 2019 and 2020, with the support of the EU Public Finance Management Support Program for Ukraine (EU4PFM), the government developed the necessary regulatory framework to launch the AEO program. In 2019, Parliament passed a respective law establishing criteria for obtaining AEO status, outlining enterprise assessment procedures, and defining privileges for AEO-certified entities.
During 2020-2021, in collaboration with international partners, the State Customs Service of Ukraine worked on developing regulatory acts, training personnel, and creating electronic tools for managing the AEO program. The first company received AEO status in March 2021. By the end of 2023, 21 enterprises were certified as AEO. The number of AEOs grew most during 2024, when their number reached 77. The Customs service continues developing software solutions to expand the AEO program.
Since 2023, Ukraine has been a participant in the EU “Customs” program — an initiative aimed at enhancing cooperation between EU member states’ customs administrations and their partners. The program aims at harmonizing customs procedures, strengthening border security, and integrating customs systems across different countries through common standards.
To harmonize its legislation with the EU, in December 2023, Ukraine criminalized large-scale smuggling of goods, although criminal liability for smuggling specific items (such as cultural artifacts, weapons, and narcotics) had already been in place. In April 2024, Ukraine opened a Coordination Center for Integrated Border Management with the EU, aligning with the border management framework used by all EU member states.
Starting in April 2025, Ukraine will implement a law aimed at harmonizing its customs legislation with EU standards. This law introduces simplified customs clearance procedures similar to those used in the EU to facilitate trade and reduce administrative burden on businesses (implementing the system of “customs representatives,” adopting the European model for types of customs warehouses, expanding available services, updating the approach to applying customs regimes etc.).
Transport visa-free regime
Ukraine’s integration into the EU Single Transport Area aims to remove restrictions in four key transport sectors: road, rail, aviation, and maritime. This process not only improves Ukraine’s national infrastructure but also enables the country to integrate into European transport corridors, ensuring seamless movement of goods and passengers across EU borders.
In 2019, the Ukrainian government launched a pilot project to introduce a unified domestic electronic consignment note (e-TTN) — a digital document confirming the right to transport cargo. This significantly simplified transportation procedures and reduced administrative barriers for transport companies. Building on this experience, in 2020, Ukraine adopted a law allowing the use of electronic consignment notes for international road freight transport under the e-CMR framework (the electronic version of the Convention cargo transportation by automobile transport). This was a major step toward integrating Ukraine’s transport system with the European one.
The primary goal of these reforms is to develop Ukraine’s transit potential, enhance the competitiveness of Ukrainian international carriers, and ensure participation in international digital transport corridors, simplifying logistics and reducing costs.
In 2021, Ukraine introduced a barcode system for transport permits and adopted European size and weight regulations for trucks — a measure that can also help reduce damage to Ukrainian roads.
In June 2022, Ukraine signed an agreement with the EU allowing permit-free road freight transport for one year. Similar to removing tariffs and quotas, this measure helped Ukrainian exporters compensate for the loss of major maritime logistics routes by shifting to land transportation. In 2024, the agreement was extended until the end of 2025, with the possibility of automatic renewal. The government is working on making this arrangement permanent.
Beyond the EU, Ukraine has signed similar freight transport agreements with North Macedonia and Norway, expanding trade route options and enabling market access without additional administrative barriers.
In October 2021, Ukraine signed the Common Aviation Area Agreement with the EU, simplifying market access for airlines. Under this agreement, Ukraine committed to adopting EU standards in aviation safety, environmental protection, passenger rights, and competition regulations. The agreement aims to liberalize the aviation market by removing restrictions on the number of flights, carriers, and routes, as well as simplifying access to the air transport market.
Industrial visa-free regime
Ukraine is working on signing the Agreement on Conformity Assessment and Acceptance of Industrial Products (ACAA), often referred to as the industrial “visa-free” agreement. This agreement will enable mutual recognition of product quality certificates between Ukraine and the EU, allowing exports of Ukrainian manufacturing products to the EU without additional certification. In the first phase, the agreement will cover three priority sectors — machinery, low-voltage equipment, and electromagnetic compatibility — with the potential to expand to 27 industrial sectors in the future. Ukraine has already completed a significant portion of the preparatory work, including adopting 25 out of 27 technical regulations, harmonizing standards, and engaging in negotiations with the EU to finalize the agreement.
Reforming the Ukraine’s Customs Service
Institutional reforms of Ukraine’s Customs Service have been one of the key priorities in the country’s European integration efforts. These objectives are outlined not only in national policy documents but also in several international agreements, such as the Ukraine Facility and the IMF Extended Fund Facility. The challenges facing Ukraine’s customs system require radical solutions, as an efficient customs service is essential not only for budget revenue generation but also for national security.
Until 2019, customs functions were performed by the State Fiscal Service of Ukraine (SFS), which also implemented the functions of the tax authority. This concentration of powers within a single agency led to inefficient management, excessive bureaucracy, and an environment conducive to corruption. The joint administration of tax and customs procedures complicated the implementation of clear policies in each area, ultimately reducing the quality of services for businesses and citizens.
In response to these challenges, in 2019, the government returned to the model that existed before 2013, when the Ministry of Revenues and Duties was created by merging the tax and customs services. In 2019, the State Customs Service of Ukraine and the State Tax Service of Ukraine were established as separate legal entities. This step allowed for a clearer division of their functions and responsibilities, helping to avoid overlap. The establishment of a separate State Customs Service was also intended to ensure greater transparency and efficiency in customs procedures, enhance supervision of financial flows, and reduce political influence. The Customs Service is subordinate to the Ministry of Finance.
Efforts to reduce corruption at customs have been supported by implementing EU-aligned procedures, introducing preliminary customs declarations to detect suspicious transactions (2019), and digitizing customs operations. To broaden the tax base and curb smuggling, since 2022, Ukrainians are required to declare postal shipments from abroad, with duties and VAT applicable to shipments valued over EUR 150 (today the government plans to tax all the shipments).
Despite structural reforms, Ukraine’s customs service remains a “leader” among the government agencies most prone to corruption. Frequent leadership changes — seven different heads or acting heads between 2019 and 2024 — have only worsened the situation, preventing the development of a stable policy and eroding public trust in the customs system.
To address these issues, in 2024, Parliament passed a law to fundamentally reform the approach to customs management and personnel selection. One of its key innovations is the introduction of a competitive selection process for the position of Head of the State Customs Service, with the participation of international experts, to prevent political interference in the appointment process. Moreover, the Ministry of Finance will no longer approve appointments into mid-level positions at the Customs Service, and every customs officer will be required to pass a one-time evaluation. There are also plans to implement a KPI system for evaluation of customs officers and to increase funding for the customs service, which is expected to enhance the professionalism and motivation of its employees.
Future steps and plans
By the end of 2023, Ukraine’s overall progress in implementing the Association Agreement was estimated at 77%. This means that most requirements and commitments under the agreement have been met, but further improvements are still needed in certain areas. The highest progress — 89% — was achieved in overcoming technical barriers to trade, while advancements in transport (59%) and customs (61%) remained significantly lower.
Further international trade reforms are outlined in the Ukraine Facility Plan and the Association Agreement, while customs reforms are detailed in the Revenue Strategy approved by the government at the end of 2023. These reforms can be broadly categorized as institutional and sectoral.
Institutional reforms focus on the ongoing reform of the State Customs Service aimed at increasing its transparency and efficiency. The plan for the coming years includes personnel evaluation, optimization of processes, implementation of KPIs, defining performance indicators for the Customs Service Anti-Corruption Program, and granting the State Customs Service new investigative functions. This latter change is embedded into the law on the criminalization of smuggling and aligns with the EU practice where customs authorities have law enforcement powers.
In February 2024, the Ministry of Finance approved the Strategic Digitalization Plan of the State Customs Service for 2024-2026, based on the EU Multi-Annual Strategic Plan for Electronic Customs (MASP-C). This plan aims to implement paperless procedures, develop and integrate modern IT systems, and strengthen cybersecurity for customs infrastructure. From an IT system development perspective, the key objective for 2025 is the transition to the next (sixth) phase of the New Computerized Transit System (NCTS).
In 2024, the government began preparing a new Customs Code fully harmonized with European legislation to facilitate Ukraine’s integration into the EU single customs area. The document is expected to be adopted in 2025.
Sectoral reforms are primarily focused on the transport network. Naturally, addressing the consequences of the war is a priority — restoring damaged logistics routes, demining lands, and resuming transport services in deoccupied territories. However, reforms extend to all areas of transportation, particularly in the context of Ukraine’s active participation in the modernization of the Trans-European Transport Network (TEN-T).
At the end of 2024, Ukraine adopted the updated National Transport Strategy and the relevant action plan extending until 2030, replacing the 2018 strategy. The new strategy focuses on developing all transportation modes, aligning with EU policy goals, and enhancing Ukraine’s export and logistics potential in line with EU standards. Another government strategy until 2030 envisions the development of border crossing infrastructure — modernization of checkpoints, increasing the capacity of transshipment hubs, and the development of service areas.
The Cabinet of Ministers of Ukraine has drafted a new Law on Railway Transport, which aims to create a competitive railway transportation market. This means opening the market to private carriers, establishing railway transport regulatory agencies modeled after the EU ones, and defining interoperability requirements to ensure safe transportation.
Beyond European integration, foreign trade development requires negotiating new free trade agreements with such countries as the United States, Mexico, South Korea, Japan, Singapore, other nations in Africa, Asia, and South America (particularly those that have FTAs with the EU). Besides direct bilateral benefits, expanding Ukraine’s FTA network will enable our country to better utilize the opportunities provided by its membership in the PEM Convention.
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