АЕО and NCTS: what's new?

The Law of Ukraine on Amending the Customs Code of Ukraine regarding some issues of implementation of Chapter 5 of Section IV of the Association Agreement between Ukraine, on the one hand, and the European Union, the European Atomic Energy Community and their member states, on the other hand became effective on 15 August 2022.

From now on, the enterprises that meet the requirements of a number of criteria will be able to receive authorization to apply the following simplifications:

1. general guarantee
2. general guarantee with a 50 percent basic amount reduction
3. general guarantee with a 70 percent basic amount reduction
4. exemption from guarantee
5. autonomous application of special type seals
6. simplified declaration procedure
7. release of goods at an agreed place.

Please note that advantages remain available only to the enterprises that acquire the AEO-status.

The following advantages are available for the enterprises that will obtain an authorization of the AEO-C type:

• fulfilment of customs formalities regarding goods, commercial purpose vehicles as a matter of priority
• reducing the forms and volumes of customs control during the customs clearance of goods and commercial purpose vehicles through an automated risk management system
• use of a specially designated (if any) traffic line at the customs checkpoint at the state border of Ukraine for the movement of commercial purpose vehicles
• use of the AEO national logo.

The following advantages are available for the enterprises with AEO-S type:

• notification from the customs authority that, based on the results of the risk analysis under the general declaration of arrival, the corresponding goods and commercial purpose vehicles have been selected for customs inspection at the customs checkpoint at the state border of Ukraine prior to the moment of their movement across the customs border of Ukraine
• fulfilment of customs formalities regarding goods, commercial purpose vehicles as a matter of priority
• reducing the forms and volumes of customs control during the customs clearance of goods and commercial purpose vehicles through an automated risk management system
• use of a specially designated (if any) traffic line at the customs checkpoint at the state border of Ukraine for the movement of commercial purpose vehicles
• use of the AEO national logo.

The legislator adapts the approach for assessing the financial position of the enterprise to obtain AEO status as in EU, which will be applied during the period of martial law and within 1 year from the date of its termination or cancellation:

• an enterprise that has negative net assets will be able to meet the requirements of the criterion of stable financial position by means of enforcement instruments to be established by the Cabinet of Ministers of Ukraine
• reduced calculated values of solvency and liquidity ratios are used:

Coverage ratio (cov.rat) ≥ 0,2

Solvency (Equity) ratio (sol.rat) ≥ 0,1

Financing ratio (fin.rat) ≤ 9.

The approach is also changing to simplify the “release of goods at agreed place”: 

• previously, this simplification was available only if the company was a warehouse keeper (own or leased warehouse)
• from now on, the simplification will be available even if the company commands the services of another economic entity (for example, under contracts for the provision of warehouse services by logistics providers after the appropriate warehouse authorization)

To meet the requirements of Criterion 4. "Ensuring practical standards of competence or professional qualification of the responsible official of the enterprise" — from now on, the requirement to confirm qualifications by passing tests is cancelled.

The requirement for enterprises to be both producers and exporters (importers) in order to obtain AEO-S authorization is also cancelled. 

From now on, the enterprises, regardless of the type of their economic activity, can obtain the AEO-status.

In addition to the above, the Law is designed to ensure Ukraine's accession to the Convention on a Common Transit Procedure (NCTS) and to the Convention on the Simplification of Formalities in Trade in Goods. 

From now on, Ukrainian businesses will be able to:

• apply a general financial guarantee, a general financial guarantee with a 50 or 70 percent basic amount reduction, exemption from guarantee
• send or receive goods without presenting them to the customs authority ("authorised consignor", "authorised consignee")
• put autonomously seals on the cargo
• move cargo quickly due to the absence of intermediate controls
• use one transit document and one guarantee to move goods among 35 countries (with EU countries and with the United Kingdom, Turkey, Serbia, North Macedonia, Iceland, Norway, Liechtenstein and Switzerland).

Our team will continue to monitor customs law developments during martial law. Please follow the updates.