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Web alert: Incorrect declarations can lead to substantial fines – the importance of accurate reporting on Ukrainian Customs forms

News & Insights 3 November 2014

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We are highlighting the unfortunate trend currently prevailing in many Ukrainian ports of the local authorities imposing unjustifiably high fines on foreign-flagged ships for relatively minor customs violations.

We are highlighting the unfortunate trend currently prevailing in many Ukrainian ports, particularly Nikolaev port, of the local authorities imposing unjustifiably high fines on foreign-flagged ships for relatively minor customs violations.

Our Ukrainian correspondents, Dias Marine Consulting, have recently dealt with a number of cases involving foreign-flagged ships being fined for alleged contraband (i.e. the  import of undeclared goods on board).

In accordance with Ukrainian Law, their Customs Authorities are authorised to inspect all areas of the ship, including bunker tanks and storerooms, during the ship’s stay in port and Customs’ officers can easily find undeclared items and impose a range of penalties.

Many owners are caught out by using old or estimated figures for bunkers remaining on board.  Customs’ officers regularly perform soundings of the ship’s bunker tanks and the results of their calculations will identify any discrepancies between the actual and declared figures.   Owners face confiscation of any undeclared bunkers, as well as fines which depend on the quantity of undeclared bunkers.   In recent cases, fines have ranged anywhere from $50,000 to $300,000.

Members should note that the Ukrainian government authorities are not willing to accept the usual letters of undertaking from clubs as security for payment of fines, and will instead require a cash deposit based on the maximum possible fine.  In the past it has proven to be very difficult to dispute these fines once they have been imposed.

As the Customs Authorities will actively look for violations, the burden is on the owner/operator to ensure that all paperwork is accurately reported.  Members calling at Ukrainian ports are advised to take the following precautions:

• Ensure that masters are fully briefed and informed about the current trend prevailing in the Ukrainian ports.
• Ensure that a detailed list is maintained of all items on board the ship, which is carefully and accurately inserted into the Customs’ declaration. This includes declaring all ship’s stores, medicines, drugs, spare parts, etc.
• The ship should take particular attention to ensure that fresh bunker soundings are taken on arrival into port, so that bunkers remaining on board are accurately reported.
• In case the ship is fined prompt measures should be taken to secure the fine, to avoid prompting a more exhaustive investigation of the officers and crew and, thus, a potential delay to the vessel.

For further details of procedures in Ukrainian ports, members can consult our correspondent’s website.

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