CLASSIFICATION OF GOODS ACCORDING TO UCG FEA: REASONS, RISKS AND CONSEQUENCES OF ITS INACCURACY

Abstract

The article is devoted to the analysis of theoretical and practical aspects of controlling the accuracy of the classification of goods under the Ukrainian Classification of Goods for Foreign Economic Activity (UCG FEA), which is important for customs declaration of goods. Investigating the causes of errors in the classification of goods is an important prerequisite for identifying key problems in the work of customs authorities, declarants and other stakeholders and developing effective ways to eliminate them. The author shows that the issue of accurate classification of goods in accordance with the UCG FEA is a key element of the State's customs policy. The commodity code established in accordance with the UCG FEA determines the procedure for customs clearance and control, as well as the specifics of calculating customs payments. In addition, the inaccurate classification of goods also poses certain risks to foreign economic operators, including financial risks; risks associated with delays and disruptions in supply chains; risks of confiscation of goods; the likelihood of losing market access and loss of reputation. The author establishes that inaccurate classification of goods may occur due to two groups of reasons: directed reasons, which are caused by the existence of ways to circumvent the measures of the State's customs and tariff policy, and random reasons, which are caused by the factor of uncertainty. The author shows that to ensure reliable customs and tariff classification, efforts are required from both governmental authorities and business entities engaged in foreign economic activity. It is important for the state to: introduce a procedure for conditional release of goods in case of disputes over the code of goods under warranty; to review previous decisions and decisions on the determination of the product code; to maintain a single online register of such decisions; introduce periodic review of previous decisions; use the procedure for providing mandatory tariff information at the request of companies; harmonize the Explanations to the Ukrainian Classification of Foreign Economic Activity with the Explanations to the Harmonized System; ensure that decisions of the World Customs Organization and the European Union on the classification of goods are taken into account; determine an exhaustive list of documents for preliminary classification decisions; use artificial intelligence to classify goods. Business entities, for their part, should take into account the best international practices, including: detailed documentation of goods; contacting customs authorities for clarification; continuous training on classification issues; and conducting internal inspections and audits.