Business calls for active cooperation between the Government of Ukraine and EU countries to address the situation with queues at the border

29/ 05/ 2023

For several weeks now, member companies of the European Business Association have been reporting significant queues of cargo at the customs checkpoints between Ukraine and Poland. According to the information received, the duration of crossing for trucks requiring veterinary control, particularly for food products, can reach up to 10 days. The waiting time for crossing other types of cargo can range up to 5 or even 10 days. At the same time, according to Ukrainian legislation, customs clearance of goods should be completed within 4 hours from the moment of arrival at the checkpoint. Yes, there are exceptions, but they are comprehensive and specified in the Customs Code. However, currently, it is challenging to comply with this norm, partly because the clearance process is slow on the side of the European Union (also because of the recent strike of Polish carriers at the border). For instance, to understand the situation, there is a queue of around 3,500 vehicles at the Yahodyn checkpoint. According to information from the business community, the Krakovets-Korchava checkpoint processes about 117 trucks per day (although this figure used to be around 440 trucks). The situation at other checkpoints is similarly complicated. It is worth noting that this directly affects not only Ukraine, its business environment, and Ukrainian supply chains but also the economies and supply chains of EU countries. Thus, on the one hand, for Ukraine, this entails direct losses amounting to hundreds and thousands of euros per month, leading to route changes and potential duplication of business branches in other countries, among other things. On the other hand, this also results in direct losses for EU countries. Several shipments that are delayed at the border crossings are goods destined for various EU countries (transiting through the Republic of Poland). This includes shipments from European-invested manufacturing enterprises processing European goods within Ukraine. Hence, the situation at the border can lead to disruptions in deliveries to partners, production failures in Poland, or even partial production shutdowns. After all, the economies of Ukraine and EU countries, especially Poland, are highly interconnected. For instance, according to the Ministry of Agriculture and Rural Development of the Republic of Poland, in 2022, Poland exported farming products worth €47.6 billion. It is a 26.7% increase compared to the previous year. Poland also imported agricultural products (raw materials from Ukraine) worth €7 billion more. The export of meat and meat processing products increased by 37%, and the export of grain and cereals increased by 40%. In particular, this effect can be explained by the re-export of Ukrainian products. And the main sales market is the EU countries, where 29% more exports went in 2022. Given this situation, some companies from Ukraine have already reached out to their European offices to raise this issue at the government level of the respective countries and at the European level, particularly within the Council of Europe, as both Ukrainian and European businesses are affected. It is also important to note that such situation undermines the application of the Agreement between the European Union and Ukraine on the carriage of freight by road, as well as Regulation (EU) No 2022/870 of the European Parliament and of the Council on temporary trade-liberalization measures. When transportation or delivery of goods cannot be carried out within a reasonable timeframe, the intended mission of the liberalization of transportation and the reduction of tariffs cease, is unfortunately hardly achieved. Undoubtedly, businesses in Ukraine greatly appreciate the EU efforts to support Ukraines economy, including significant changes in logistics supply chains and more. At the same time, it is crucial to continue working together harmoniously, as the practice has shown that this only adds further value - both to the products and the development of businesses and economies of countries. Moreover, Ukraines potential to create added value is evident from the mentioned statistics. Therefore, the European Business Association appeals to the Council of Europe, as well as Ukrainian and Polish government structures, including the Ministry for Communities, Territories and Infrastructure Development of Ukraine, the Ministry of Finance of Ukraine, the State Customs Service, the State Border Guard Service of Ukraine, and the relevant governmental administrations on the Polish side and other EU countries. The appeal calls for improved communication and cooperation to address the issue of queues in freight transportation at the borders, as it affects the entire economy of EU countries. Furthermore, the Ukrainian side needs to work on enhancing the functionality of the recently launched E-queue system to prioritize the passage of goods processed under the general transit regime.

At the same time, according to Ukrainian legislation, customs clearance of goods should be completed within 4 hours from the moment of arrival at the checkpoint. Yes, there are exceptions, but they are comprehensive and specified in the Customs Code. However, currently, it is challenging to comply with this norm, partly because the clearance process is slow on the side of the European Union (also because of the recent strike of Polish carriers at the border). For instance, to understand the situation, there is a queue of around 3,500 vehicles at the Yahodyn checkpoint. According to information from the business community, the Krakovets-Korchava checkpoint processes about 117 trucks per day (although this figure used to be around 440 trucks). The situation at other checkpoints is similarly complicated.

It is worth noting that this directly affects not only Ukraine, its business environment, and Ukrainian supply chains but also the economies and supply chains of EU countries. Thus, on the one hand, for Ukraine, this entails direct losses amounting to hundreds and thousands of euros per month, leading to route changes and potential duplication of business branches in other countries, among other things.

On the other hand, this also results in direct losses for EU countries. Several shipments that are delayed at the border crossings are goods destined for various EU countries (transiting through the Republic of Poland). This includes shipments from European-invested manufacturing enterprises processing European goods within Ukraine. Hence, the situation at the border can lead to disruptions in deliveries to partners, production failures in Poland, or even partial production shutdowns. After all, the economies of Ukraine and EU countries, especially Poland, are highly interconnected. For instance, according to the Ministry of Agriculture and Rural Development of the Republic of Poland, in 2022, Poland exported farming products worth €47.6 billion. It is a 26.7% increase compared to the previous year. Poland also imported agricultural products (raw materials from Ukraine) worth €7 billion more. The export of meat and meat processing products increased by 37%, and the export of grain and cereals increased by 40%. In particular, this effect can be explained by the re-export of Ukrainian products. And the main sales market is the EU countries, where 29% more exports went in 2022.

Given this situation, some companies from Ukraine have already reached out to their European offices to raise this issue at the government level of the respective countries and at the European level, particularly within the Council of Europe, as both Ukrainian and European businesses are affected.

It is also important to note that such situation undermines the application of the Agreement between the European Union and Ukraine on the carriage of freight by road, as well as Regulation (EU) No 2022/870 of the European Parliament and of the Council on temporary trade-liberalization measures. When transportation or delivery of goods cannot be carried out within a reasonable timeframe, the intended mission of the liberalization of transportation and the reduction of tariffs cease, is unfortunately hardly achieved.

Undoubtedly, businesses in Ukraine greatly appreciate the EU efforts to support Ukraine’s economy, including significant changes in logistics supply chains and more. At the same time, it is crucial to continue working together harmoniously, as the practice has shown that this only adds further value – both to the products and the development of businesses and economies of countries. Moreover, Ukraine’s potential to create added value is evident from the mentioned statistics.

Therefore, the European Business Association appeals to the Council of Europe, as well as Ukrainian and Polish government structures, including the Ministry for Communities, Territories and Infrastructure Development of Ukraine, the Ministry of Finance of Ukraine, the State Customs Service, the State Border Guard Service of Ukraine, and the relevant governmental administrations on the Polish side and other EU countries. The appeal calls for improved communication and cooperation to address the issue of queues in freight transportation at the borders, as it affects the entire economy of EU countries.

Furthermore, the Ukrainian side needs to work on enhancing the functionality of the recently launched E-queue system to prioritize the passage of goods processed under the general transit regime.