CUSTOMS AGENCIES' EFFORTS IN TACKLING THE SHADOW ECONOMY

Abstract

The pervasive shadow economy presents a threat to Ukraine, causing substantial fiscal losses and impeding economic progress. Customs authorities are at the forefront of the battle against this formidable adversary, particularly concerning the clandestine movement of goods across borders. To effectively confront this challenge, customs agencies must adopt state-of-the-art technologies, notably harnessing the potential of artificial intelligence. A stringent framework of specific measures and precise indicators is imperative to rigorously evaluate the efficacy of customs operations in this domain. The article advocates for an overhaul of the system, equipped with advanced tools for data collection and processing, formidable AI systems for automated risk assessment, unwavering violation detection, and swift decision-making for customs oversight and clearance. The authors stress the necessity of an unwavering systematic integrated strategy to eradicate the shadowing of foreign economic activities. This approach amalgamates relentless technological advancement within customs, meticulous enhancements to customs and tax legislation, steadfast reinforcement of international collaboration, and an unswerving shift in societal attitudes vehemently opposing shadow practices. Elaborate schemes of illegal import constantly evolve, circumventing existing controls. Customs must remain nimble and adaptive, adeptly enhancing mechanisms to uncover and neutralize novel circumvention tactics. Introducing AI-enabled solutions can significantly bolster risk analysis, predicated on vast data compilation, integration, and processing capacities surpassing human abilities. AI implementation should focus on key domains - automated image recognition of prohibited goods, tracking connections between importers to identify risks, and predictive classification of items. Geospatial tracking of entities involved in shadow activities can uncover locations and routes. Customs modernization represents an indispensable constituent in the broader imperative of instituting robust national anti-corruption frameworks aligned with international best practices. While technological progress can substantially augment operational capabilities, a holistic approach encompassing legislative, procedural, collaborative, cultural, and ethical dimensions remains vital for lasting success.