Customs as a Financial Risk: Why Every Day of Cargo Delay Costs Businesses Millions

Every day a shipment sits at the border turns into frozen working capital, broken contracts, and direct financial losses for the company. According to lawyer Kseniia Mezhova, speaking exclusively for RBC-Ukraine, customs clearance has long gone beyond purely legal procedures and has become a full-fledged part of a deal's economics. "I have long stopped viewing customs disputes as a purely legal matter. For me, customs is a separate financial and operational risk for business. And that, in my opinion, is exactly how owners and management should treat it," the expert emphasizes.

Arithmetic vs. Administrative Logic

The most typical scenario importers face is a dispute over customs value. A company bought goods for 100 units: the contract is for 100, the invoice confirms 100, and the bank records a payment of 100. Yet the customs authority has information that a similar item was once cleared by someone for 130. Simple arithmetic instantly turns into a legal debate. At the same time, the mere existence of a different price on the market does not mean the current price is wrong. The market has an annoying property for administrative logic — prices on it vary depending on the volume of the batch, payment terms, discounts, configuration, condition of the goods, year of manufacture, logistics, and a dozen other factors.

Used Equipment: When the Name Does Not Equal the Value

The problem is especially acute with used equipment. Two units of the same model may be identical only on the first page of the catalog. One has been in operation for a year, the other for seven. In one, a key component has been replaced; in the other, the remaining service life is nearly exhausted. One is sold with software and a warranty, the other without. The name is the same, but economically they are two different assets. "Therefore, what needs to be compared are not the names of goods, but the actual commercial transactions," notes Kseniia Mezhova. And if the customs authority departs from the contract price, it must explain not why another shipment was more expensive, but why the documents of this particular transaction do not allow its real value to be determined.

"Endless" Documents: The Paradox of Folder Thickness

The second storyline, familiar to many importers, is the chain of additional requests. The contract is there, the invoice is there, the payment is confirmed, the transport documents are provided. Then a price list is needed, then an export declaration, then an explanation of the discount, and in the end a letter from the manufacturer is missing. The business naturally begins to wonder whether there is even a final list of documents, or whether it is being creatively assembled right during customs clearance. The expert advises not to rush and not to submit documents chaotically. Each requested document must have a clear legal function: what it is needed for, what circumstance it confirms, why the already-provided materials are insufficient, and whether the company can even obtain it. "In a customs dispute, the thickness of the folder is not proof of its quality. Far more important is that all the documents tell the same story," the lawyer warns.

The HS Code: An Expensive String of Digits

The HS code (Unified Commodity Nomenclature of Foreign Economic Activity) looks to a person not engaged in foreign trade like a long string of digits. For an importer, it is sometimes a very expensive string of digits. It determines the duty rate, the need for additional permits, anti-dumping payments, and other import conditions. Changing the classification of a product can radically alter the economics of the entire operation, turning a profitable deal into a loss-making one. That is precisely why, according to experts, customs attempts to change the HS code, request "endless" documents, or artificially inflate the value of goods have long gone beyond purely legal procedures and have become a systemic risk factor for Ukrainian business.

How Business Should Act Before Cargo Is Blocked

The key conclusion Kseniia Mezhova draws is that customs clearance must be approached as the management of a financial and operational risk, not as a routine bureaucratic procedure. Business needs to understand in advance which documents have a real legal function, how to argue the value of a specific transaction, and how to minimize the risks of a change in product classification. "This is not a war with customs and not an attempt to hand over nothing. This is normal hygiene of business processes," the lawyer concludes. Every day the cargo "engages in a substantive dialogue with customs," contractual deadlines continue to expire, the client is waiting, and working capital is not working.