Saakashvili on Odessa Customs & Clearance

BY NIKOLAI HOLMOV

In his usual and characteristic way of stating the issues in a somewhat unpolished manner, Governor Saakashvili gave an interview to “The Day” (День) media outlet regarding the new Odessa Customs set up, e-clearance going on-line with effect from 1st March 2016, and who is and is not seemingly welcome to use Odessa as a customs clearance hub.

He noted, probably rightly, a significant decrease in corruption within customs in Odessa – whilst simultaneously acknowledging that smuggling continues.

He stated clearly that the majority of corruption schemes now operate from Kyiv customs and no longer from Odessa.   “Currently, these flows have switched to other customs, mainly in Kyiv, where the custom clearing goods occur at lower prices.  
We want to customs clearance only the loads from the EU, US, Japan, Canada and Australia, because of their origin and the price specified in the declaration of the goods are confirmed at 100%.  But the Chinese and Turkish goods clearance we will refuse because it is impossible to find a real return for them. Let them visit other customs, because it is a potential source of corruption.  When from March 1st, 2016 electronic customs begins, then all will use the cargo customs clearance.”

Now there is little to argue about in what is said factually regarding the transfer of customs clearance flows to a more “understanding” Kyiv customs clearance regime.

To have an e-clearance system in place by 1st March 2016 may be a little ambitious, but it is at least a recognition that his May 2015 statements of e-clearance by 1st November were a technological fantasy as the blog pointed out at the time.  A 9 month install and testing is more realistic from the date he announced e-clearance for Odessa, and it will certainly make Odessa far more attractive to those that regularly use e-clearance globally.

However, with regard to Chinese and Turkish goods, it is surely not “impossible” to find origin and pricing that can be 100% confirmed for a reasonable percentage of what comes through Odessa normally.  Even if only 5% – 10% can only be 100% verified then it would seem perhaps a somewhat undiplomatic choice of words to utter “impossible” – and that percentage of 100% verifiable goods from China and Turkey is probably higher.

Indeed, with all EU, US, Australian, Canadian and Japanese good entering getting an almost immediate pass and almost no inspections, does that not allow more time to inspect Chinese and Turkish goods and test the apparent newly acquired moral fortitude and group ethic of the customs officials in Odessa Port – or is that confidence somewhat limited and therefore politically problematic?

Instead of pushing the corruption from Odessa customs clearance to Kyiv customs clearance, could the corruption not have actually been tackled, rather than simply redirected?  Is it not a somewhat flawed policy to simply move the problem?

If Odessa customs has seen a rapid reduction in corruption, which is probably has, then is it a genuine policy win if Kyiv customs has seen a rapid increase in corruption as a result?  Admittedly Governor Saakashvili is the governor of Odessa, and therefore results in Odessa have primacy amongst the constituents he is responsible for and to – indeed such local results may well be fawned over by many of the Ukrainian constituency seeking a genuine battle with corruption – but in taking Ukrainian citizenship and as a national public political figure (with future national ambitions no doubt), is a shifting of the problem perhaps not the answer they would expect?

That said, is it perhaps easier to deal with such issues in an oblast by oblast manner – for each oblast has its own peculiarities and prominent corruption practices.  A piecemeal approach to those peculiarities may be easier to effectively implement under a broad national umbrella that is otherwise less than effective – particularly when the centre is clearly unwilling to deal with its own corruption.

Governor Saakashvili also has limitations upon the power he wields both within and without the Odessa Oblast.

The question then is perhaps not whether shifting the corruption from Odessa customs clearance to Kyiv customs clearance is a good policy (or not) when it comes to tackling corruption – but whether it was the only strategy available to the authorities of Odessa?

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