Page 39 - BNE_magazine_11_2019

bne November 2019 Eastern Europe I 39
INTERVIEW:
Reformer pledges to transform Ukraine's notoriously corrupt State Customs Service
Sergei Kuznetsov in Kyiv
Max Nefyodov does not look like your run-of-the-mill Ukrainian official. With his barber
shop haircut and full beard, he would probably fit more naturally in a studio of IT developers or a trendy coffee shop than the old-fashioned corridors of Ukraine’s government buildings.
His recent track record is also uncommon. Four-and-a-half years ago, the Kyiv-born investment banker left an expensive office in Ukraine’s capital city and joined the economy ministry, aiming to reform the nation’s public procurement system, which was rife with corruption. Unexpectedly for many observers, he succeeded in this ambitious undertaking.
In July this year, Nefyodov embarked on a new endeavour, when the government approved his candidature for the post
of head of the State Customs Service, another of the most corrupt institutions in the war-torn country.
This appointment followed Nefyodov’s victory in an open competition for this post, which was announced after the State Fiscal Service was split into two separate bodies in March: the State Customs Service and the State Tax Service. The reorganisation was the result of growing pressure from Western backers and donors, including the International Monetary Fund (IMF), which believed that such a division could bring more transparency to this sphere.
“I believe that if you have to get into
a fight somewhere, then you should do it where it can bring you the greatest results,” Nefyodov says in an exclusive interview with bne IntelliNews.
‘Unique’ window of opportunity
In July, then-prime minister Volodymyr Groysman branded Nefyodov’s appoint- ment “a ticket to a war with scam- mers”, hinting at a myriad of corruption schemes existing at customs points – from bribes to multi-million-dollar smug- gling operations. Groysman added that legal businesses should be able to operate without obstacles created by customs officials, while all fraudulent schemes “must be eliminated” by the reformer.
According to Nefyodov, the state budget loses UAH100bn-UAH200bn ($4bn-$8bn) every year as a result of customs corruption.
“Furthermore, there are indirect losses from the decline in business activities, the deterioration of the business climate, tax evasion and illegal employment. Com- panies that operate in the shadows can’t attract loans and develop further,” he says.
Today, Nefyodov sees a “unique” window of opportunity to reform the State Customs Service. “There is a coincidence of
attention [from the Ukrainian leadership] to this sphere and conducive personnel appointments.”
Indeed, the nation’s finance ministry and the State Tax Service – the two bodies with which the State Customs Service must cooperate in order for Nefyodov’s reforms to succeed – are headed by reform-minded officials. Moreover, the parliament is controlled by a single political force – the Servant of the People party created by President Volodymyr Zelenskiy – and this fact should facilitate the swift adoption of necessary reform legislation.
“Weak, half-hearted attempts to reform the customs service were undertaken
in the past. But if there was a will to change anything here, then there was no support from the finance ministry. And when the finance ministry showed some initiative, the customs service had no resources. Or the finance ministry tried to push some reforms through parliament, but parliament wasn’t ready to vote for reforms.
Max Nefyodov left investment banking to reform Ukraine's public procurement system and has now taken on another notoriously corrupt institution, the State Customs Service.
www.bne.eu