bulavinvi_eng Vladimir Ivanovich Bulavin
 Head of the Federal Customs Service of the Russian Federation
On the Session of the Advisory Board on implementation of customs policy

On June 23, 2006, in the Federal Customs Service of Russia a regular session of the Advisory Board was held on the matter of implementation of customs policy. The Board, consisting of members of customs service, business circles, concerned organizations and agencies, is to be summoned every 3 months with the purpose of discussing and making of decisions on current issues of customs activities. The Session was the first to be conducted by Andrei Belyaninov, a new Head of the FCS of Russia. The Agenda included three items for discussion. 

The first part of the session was dedicated to discussions of customs regulation of international road transport. In his lead address, Aleksei Vasilkov, the First Vice-President of the Association of International Road Carriers (hereinafter, AIRC) paid attention to successful results of the reform, launched in respect of the customs management system, and marked positive processes, which had recently taken place within the customs system. Addressing the participants, he ear-marked: “The new Customs Code of the Russian Federation  has proved to be a definitive motive power of the reform, which has allowed to speed up customs clearance, initiate the process of de-bureaucratization of customs procedures and establishing of favorable conditions for innocent participants of Foreign Trade Activities”. 

It was emphasized as well that substantial time reduction had been achieved for customs clearance of carriage of goods at motor-service checkpoints and at the points of delivery, resulting in reduction of time of conveyance of cargo to consignees. This is an unquestionable merit of customs authorities, contributing to further development of foreign trade.

It was highlighted that the teamwork carried out on reduction of the level of violations in delivery of goods according to the TIR procedure, reducing figures of non-delivery to 0.008% in 2005, which is considerably less than an average figure in European countries.

Aleksei Vasilkov confirmed: “This progress seems to represent the basis for building up of the prospect of liberalization of customs clearance for international transportation, supported by launching of operation of the TIR warranty system. As per transportation, carried out in 2004, payment of correct claims amounted to 20 million rubles, while directly 35 million rubles were paid by carriers-violators to compensate for 160 claims”.
In his turn, in his talk Anatoly Galaktionov, Head of the Central Administration of Organization of Customs Control (herein after, CAOCC) confided achievements of customs services: “We make our contribution as well. We operate the electronic system of goods delivery monitoring, which includes generation of electronic notice of goods and transport vehicles and their transit to destination points of customs authorities, so called the Computer-aided customs transit monitoring system (CACTDS)”. This system ensures also to provide for effective prevention of non-deliveries.  

Further to this item, consideration was given to the issue of the requirement of customs authorities on fabrication of TIR Carnet and tangible costs of carriers, arising from this issue.

The requirement for electronic copy of the transit declaration, which is necessary for carrying out o customs control over conveyance of goods, was explained by experts of the FCS of Russia subject to provisions of Article 80 и Article 169 of the Customs Code of the Russian Federation (hereinafter, RF CC) and to a number of regulatory documents, identifying the procedure of customs operations for goods in transit. In so doing, it was noticed that generation of electronic copy of transit declaration (TIR Carnet may be used as a transit declaration) can be accomplished by carriers both independently and by officials of customs authorities, and where necessary, a carrier (forwarder) can make use of services of a customs broker. In so doing, in accordance with paragraph 4 of Article 139 of RF CC, such relations are built based on contractual basis. “It is essential,” emphasized Anatoly Galaktionov, “for carriers to work in the framework of preliminary delivery of information, but not to introduce this information at the border as to avoid the necessity for a carrier to apply to brokers”. Accordingly, for work optimization carriers are offered to independently generate electronic copy of transit declaration in advance.

”As far as expenditures, incurred by carriers at a number of checkpoints, say, in places of assignment of a “Rostek” unit (Russian Customs Economic Company) at times, such expenditures are not adequate to costs, incurred by this unit for the purpose of generation of these copies even regardless of the fact that we have substantially simplified the copy itself so than now it specifies only one commodity item and its code instead of tens”, went on to say Head of the CAOCC.

As responsive measures, Anatoly Galaktionov proposed to give a commission to “Rostek” to conduct unification of rates so as they would be adequate to the expenditures, incurred by  “Rostek”  in performing generation of these electronic copies.  “I believe that we will be able to solve this problem providing we follow these two directions”, - concluded Anatoly Galaktionov. 

The other problem, which solution caused AIRC to request support of the FCS of Russia during the Session, is related to assignment of customs escort during carriage of goods, conveyed within the territory of the Russian Federation in accordance with the TIR procedure. This escort is assigned by customs authorities in accordance with provisions of TIR Convention (of 1975) and Article 88 of Customs Code of the Russian Federation with the purpose of ensuring delivery of goods, which amount of customs duties, subject to payment in case of their release for free circulation, exceeds $50 000. This is the very amount, specified by TIR Convention, which secures the guarantee of commodities delivery whereas their non-delivery is to be compensated by customs authorities. It is relevant, that such measures have already permitted to minimize the percentage amount of non-deliveries of goods, as it was mentioned above. It creates positive image for customs authorities in the eyes of European Community and enhances the prestige of customs authorities of Russia.

At the same time, in meeting whishes of carriers, the FCS of Russia proposed to extend the guarantee limit applicable to one TIR Carnet up to 60 000 euro, i.e. up to the level, established in the EU member-countries.  

Consequently, it will be possible to consider the issue of application of the risk management system for identification of list of goods, requiring no customs escort subject to exceeding of guarantee limit as applicable to TIR Carnet carriages.
The next agenda item was consideration of the issue of payment by carriers of services of temporary storage warehouses (hereinafter, TSW) at road checkpoints in connection with prescription of their customs inspection. 

The Customs Service’s conception of solution of this problem is as follows.  Inspection is to be prescribed by officials of customs authorities for the purpose of suppression of possible commodity smuggling and may be carried out solely in locations, specially conditioned for this purpose. These are the only conditions, which make it possible to ensure identification of goods, carrying out of terminal function and other operations. These operations can only be accomplished at temporary storage warehouses.

Accepting these requirements, carriers, however, mark occurrence of cases of ungrounded placement of goods into TSWs and delays in release of cargo from storage. For partie, including carriers, the commercial nature of TSWs as entities, calls for contractual basis in building relations with them in accordance with Paragraph 3 of Article108 of Customs Code of the Russian Federation. Therefore, ungrounded placement of goods to TSWs causes extra material costs, suffered by carriers. 

Pinpointing this problem, Andrei Belyaninov, Head of the FCS of Russia, concluded: “I believe we will have to apply drastic efforts jointly with AIRC”. “AIRC or carriers should provide us with data, stating cases of occurrence of ungrounded stoppage of transport vehicles and carrying out of inspections in TSW. We are obliged to conduct investigation and to take adequate measures in respect of occurrence of every single case”, -emphasized Head of the customs agency.

One other critical problem, discussed during the Session, was related to the issue of bringing of carriers to administrative responsibility in accordance with Part 3 of Article 16.1 of Administrative Code of the Russian Federation (delivery of invalid information in respect of goods in transit). This issue has been repeatedly discussed between customs authorities and carriers. So far no common conception has been elaborated. Carriers would insist that in the time of acceptance procedure of goods abroad they are disqualified from being convinced of conformity of cargo related data, declared in documents, with goods actually placed into a transport vehicle. Insofar carriers perform only services related to goods delivery, and are not concerned about minimizing of their customs value, members of AIRC are offered, while identifying data variance in respect of goods, specified in documents, to place the responsibility on parties, who are interested in these manipulations, i.e. customs applicant, consignee, consignor and owner of TSW. As a liability measure in the time of detecting of violations, to use arrest of these commodities with its consequent appropriation unless a consignee has claimed his commodity and paid all due customs duties and penalties.

Customs experts recognize criticality of this problem. Its solution lies within legal domain. In accordance with provision of Administrative Code of the Russian Federation, a legal entity is found guilty in commissioning of administrative violation of law subject to identification of his ability to abide rules and regulations, which violation causes legal accountability, stipulated by the Code. But these options are designated in the Convention on international road transportation, particularly in Paragraph 1 of Article 8 providing that in the time of acceptance of goods, a carrier shall be obliged to verify accuracy of records in waybills. In other words, a carrier is entrusted with responsibility to check what he is going to carry. And in the event, if a carrier is unable to check his cargo, he is liable to make corresponding notations in the waybill. Unfortunately, there is always a failure in so doing. Unless a carrier fails to do so, he is considered to have declared the cargo checked and the waybill completed adequately. “This is how carrier’s violation manifests itself. While taking decision on making him accountable, we follow international rules and regulations established of our legislation”, - stated experts of the customs service.

In their turn, members of carriers would maintain other legal option. Thus, if a customer-consignor is located abroad, while goods are arrested by a customs house on account of non-compliance with the data, declared in documents, and the goods are placed to TSW as a part of customs inspection, and no one claims the goods, the carriers would come up with the proposal of seizure of the goods by customs authorities. With this regulation in view, it was proposed to organize a meeting of relevant services of the FCS of Russia and of AIRC with the purpose of discussion and elaboration of an appropriate regulatory framework. Indeed, by establishing a precedent it will be possible to reach a manifold reduction of unreliable declaring. As the first steps in this direction, Andrei Belianinov gave instructions to prepare and to provide customs authorities with recommendations on initiation of proceedings and investigation of cases of administrative law violations in the event of detection, in the process of customs transit of goods, of indications of law violations, provided by Part 3 of Article 16.1 of the Administrative Code of the Russian Federation, taking into account the urgency of disclosure of heads of these violations. 

The issue of utilization, during international transportation, of transport vehicles, registered in Kaliningrad region, in connection with effectiveness of the federal law on special economic zone in Kaliningrad region (No.16-ФЗ, dated 10.01.2006) was appreciated by Head of the FCS of Russia. 

It is worth reminding that from the moment of establishing in 1996 of special economic zone in Kaliningrad region, more than 10 000 road transport vehicles were imported into its territory, including those used for international transportation. Now, the regulations of the new federal law, in fact, disallowed utilization of these transport vehicles for direct transportation operations between foreign states and the rest of the territory of the Russian Federation, аs well as for transit operations through the territory of Kaliningrad region.

The FCS of Russia considers as an effective tool in releasing this situation the regulation of the Government of the Russian Federation “On definite measures of support provided by the state to enterprises of road transport of Kaliningrad region”, which is intended to establish a time-limited rate of import customs duties in respect of large-capacity road transport vehicles, imported into the territory of the special economic zone of Kalinigrad region in accordance with customs treatment, which have long been in operation. “Following this measure, we’ll be required to clear all these vehicles within a very short-time period with subsequent issue of certificates of transport vehicles…In my opinion, we need time allowance and necessary strengthening of units of the region’s customs authorities”, - ear-marked Head of the FCS of Russia. 

In the concluding part of discussion of customs regulation of international road transportation, Head of the FCS of Russia received the AIRC’s approval of the concept of the system of preliminary delivery of information, which is proposed by the FCS of Russia as a tool of effective customs management, allowing to considerably reduce time of trade flows, passing across checkpoints and to speed up customs clearance of goods in customs houses at destination points. It has been decided that the FCS of Russia as a joint effort with AIRC decided to carry out pilot transportation operation in the 4th quarter of 2006 using preliminary information, delivered by AIRS, followed by launching  of the  a new interaction system. 

For the purpose of successful implementation of this project and in view of considered opinions, Andrei Belyaninov gave instructions to respective units of the FCS of Russia to prepare within specified timeframe a corresponding regulatory structure and to draw up a draft Agreement on preliminary information delivery to customs authorities in the time of conveyance of goods and transport vehicles in accordance with the TIR procedure.      

The direct and open dialogue, which took place in the course of the Session of the Advisory Board, has facilitated to find points of contact in respect of many issues. The teamwork of the FCS of Russia and business circles will be continued. It is planned to conduct the next session in September of the current year.

Other issues, discussed on June 23, 2006 at the Session of the Advisory Board on implementation of customs policy, will be additionally brought to the notice of mass media.