bulavinvi_eng Vladimir Ivanovich Bulavin
 Head of the Federal Customs Service of the Russian Federation
October 25 – Day of the Customs Officer of the Russian Federation
On 25th October 2005, customs officers of the Russian Federation celebrate the eleventh anniversary of their professional holiday. It was introduced by the state in 1995, in recognition of the magnitude of the profession of the customs officer, and the contribution of the customs service to the national economy.

Intensive technology under severe time constraints, vigorous application of advanced information technology systems, availability of appropriate legal framework, conforming to international standards – all these constituents afford ground for considering customs as a tower of strength in the Russian state.

The modern customs service in the capacity of an establishment of government control of foreign economic activities has been in existence for just under fifteen years. On 25th October 1991, the President of the Russian Federation signed a Decree on the establishment of the State Customs Committee (SCC). As of 1st July 2004, the SCC was reorganized into the Federal Customs Service (FCS), and today we can summarize some of the results of the new establishment. Despite certain difficulties, customs authorities succeeded in maintaining stability within all lines of their activities this year.

For nine months of 2005, cash inflow into public revenue amounted to 1.5 billion rubles, or 150% of the amount projected for the year 2005. Daily budget receipts exceed 270 million US dollars. (For reference: for the whole period of 2004 the amount of customs budget receipts exceeded 1.2 billion rubles. Every ruble invested in the system’s development generated a profit of 67 rubles, whereas the endowment resulting from the activities of every customs officer amounted to 19.2 million rubles last year).

These results were achieved not only owing to the growth of foreign trade turnover and high prices of oil. They were achieved thanks to well-directed efforts towards streamlining customs procedures, developing information technology, tightening control of the adequacy of declaration of commodities, and applying the risk management and post-audit systems.

The current year is marked by changes in priorities in the activities of the customs service. Apart from replenishment of the federal budget (45% of its revenue accounts for customs duties), the foremost task is to arrange favorable conditions for bona fide participants of foreign economic activities as well as to solve the critical problem stated by President Vladimir Putin in his annual missive, addressed to the federal assembly. According to his qualification, priority in activities of the customs service must be given to verification of the implementation of customs law, rather than execution of any plans. Setting this task required customs to change their approach towards organizing their activities and to change their judgment of legal status in the sphere of customs-legal relations.

Protection of the economic security of the state, prevention of smuggling, and illegal conveyance of narcotic drugs, weapons and cultural valuables remain some of the most critical tasks for customs. In the year since the FCS of Russia was established, quantitative and qualitative information on law enforcement by customs authorities has grown notably. Thus in the first half of 2005, the number of instituted criminal proceedings increased by 33%, and the sum of penalties imposed in connection with administrative violations increased by 3 times. In the first 9 months of 2005, 2424 criminal cases were instituted, the value of illegally conveyed commodities as contraband articles amounted to 4.7 billion rubles. Dishonest traders attempted to evade payment of 1.7 billion rubles in total. Within the same period, 47 400 cases were opened on account of administrative violations, while penalties of 10.2 billion rubles were imposed.

Under conditions of considerable liberalization of foreign trade legislation, operational search procedures take on special significance, aimed at obtaining reliable information predicting attempted illegal activities. At present, up to 70% of crimes committed in the field of foreign trade are discovered as a result of operational searches (54% in 2003).

In the first 9 months of 2005, the customs authorities of the Russian Federation suppressed 1022 attempts at drug smuggling, and at the same time more than 4.5 tons of narcotic drugs, psychoactive and hard drugs were withdrawn, including 733 kg of heroin, 2.6 tons of marijuana, 134 kg of opium, and 70 kg of cocaine. Approximately 1000 ammunition items and 32 items related to military hardware and armament, including 15.5 kg of explosives, were withdrawn as a result of special actions taken by interagency bodies.

By cutting off channels of illegal importation of prohibited and hazardous articles into Russia, by means of systematic and thorough measures carried out to dissolve every kind of unlawful scheme of illegal importation of industrial and consumer goods, customs, in cooperation with respectable businesses, simultaneously worked at arranging more favorable conditions for foreign trade, and promoting the attractiveness of investment in the Russian market. As an illustration of actual actions carried out to facilitate and streamline customs procedures for lawful participants of foreign trade, it seems appropriate to mention the start of practical application of Article 68 of the Customs Code of the Russian Federation; temporary warehousing at importers’ sites; the opportunity of filing a partially complete or a partially complete recurrent declaration; declaration of goods kept at an importer’s warehouse by filing a recurrent customs declaration; and release of goods prior to filing a declaration. On the basis of the coming into effect of the relevant order, between April 2005 and October 2005 the FCS of Russia issued 73 instructions on the establishment of special streamlined procedures for individual participants of foreign trade.

In 2005, the system of electronic declaration began to be actively implemented. From experimental and individual use it has measured up to extensive application. While by the end of last year only a little more than 10 customs posts were able to carry out their control procedures using the electronic declaration system, their number has now increased to 57 and will reach 60 posts by the end of this year. Notably, the customs posts in question operate in all regions of Russia, not only in Moscow and the Moscow region. The “Kaliningrad transit” and “Green corridor” projects continue to develop.

The agreement has been achieved by incorporating the customs authorities of Byelorussia into the “Kaliningrad transit” project, while Russian companies are preparing to join the “Green corridor” project (currently, Finnish and Swedish companies are taking advantage of this project). Intensively growing foreign trade turnover in Russia and the application of global product movement technology, on the one hand, and the continuing threat of international terrorism on the other hand, predetermine the implementation of fundamentally new concepts of customs control, its basic elements being preliminary information distribution and the risk management system.

The introduction of preliminary information distribution, whereby information concerning goods is transferred from the customs authorities of an exporting country to that of an importing country, allows customhouses to minimize the time required for carrying out customs administration. In 2005 this line of activity was the focus of constant attention, and a number of experiments were initiated on the northwest border of the Russian Federation. In October 2005 the Agreement on delivery of preliminary information was signed with the customs service of Kazakhstan. Experts from the two states are studying the issue of the composition of delivered information and rules of information exchange.

The fundamental agreement on preliminary information distribution has been achieved with the customs service of Ukraine. Intensive discussions on this subject are under way with other countries - partners of the Russian Federation. Implementation of the institution of preliminary distribution of information is inseparably connected with the application of the risk management system (RMS). This system presents a fundamentally new line of activity of the customs service of the Russian Federation, having been in practical application for less than 6 months. (Modern risk management systems have been used in Europe for more than 10 years, and in the USA for 25 years). By now, the RMS legal base has been formed and first experience gained. The key mechanism of the RMS is risk profiles, forming the so-called “red sector” of customs control. Within the framework of the RMS, work is being carried out to create the “green sector” of the foreign trade participants, subject to partial customs control. This work was initiated by the Russian FCS Order № 409, dated 04.05.2005, approving the corresponding technology.

Customs service activities related to protection of intellectual property take on special significance. It was not until 2004 that the legal framework of these activities came into being, after the enforcement of the new Customs Code of the Russian Federation.

Today the Register of intellectual property objects, maintained by the FCS of Russia, contains more than 510 trademarks. Compared with 154 cases initiated in 2004 on account of violation of intellectual property rights, this number almost doubled, reaching 158 cases in the first 6 months of 2005. The effectiveness of trademark protection provided by customs is corroborated by the market: the entry of trademarks into the Register has practically eradicated unauthorized deliveries of corresponding goods. This is down to both the highly efficient activity of customs authorities and the Register’s prevention effect: potential law-breakers do not dare to violate a proprietor’s rights, being aware that registration of this or that trademark in the Register will make him the focus of close attention of customs inspectors.

The activities of customs authorities in respect of protection of intellectual property are highly valued by those right-holders who applied to the FCS of Russia for protection of their rights. Work is in progress to create a customs infrastructure and to equip customs authorities with state-of-the-art technology. The application of means of technical control by customs authorities plays an important role in ensuring Russia’s economic security. Therefore, the question of providing modern means of control, communication, acquisition and transfer of information, search and screening, and detection of metals and explosives, weapons and narcotic drugs, is a priority.

In 2005 customs authorities took delivery of 140 kits of such technical control equipment, such as the “Vzglyad” (Glance) system, designed for visual inspection of hard-to-reach places, the “Watson” system, designed for X-ray scanning of concealed cavities, the “Delta” system, designed for identification of precious metals and stones, the “Zorkiy” (Vigilant) system, designed for identification and detection of counterfeited numbers of assemblies of transport vehicles, the technical video-scope “Krot” (Mole) and other equipment. Renewed construction of the last of the 6 “Mercury” series specialized revenue cutters has been initiated. Making preliminary information distribution and electronic declaration a priority means improved security control at the border.

For the purpose of instrumental monitoring carried out in respect of large cargo, transport vehicles and containers, checkpoints must be fitted out with special-purpose equipment – inspection and customs examination complexes (ICEC). Assembly of the first ICEC installation is under way on the Ukrainian border, at the checkpoint of the customhouse of Troyebortnoye of Bryansk. It will be operational by the end of the year. The construction of another 17 ICEC complexes has been planned within the framework of the Federal Purpose-oriented Program “State border”.

The Northwest Customs Administration has commenced work on fitting out the “Torfianovka”, “Brusnichnoye” and “Burachki” checkpoints. It is planned later on to create the customs service interconnected information field by integrating ICEC complexes.

The Russian customs service demonstrates its readiness in practice to support law-abiding and “transparent” participants of foreign trade. Those who prefer to stay in the “shadow” of Russian foreign trade are faced with the “red light”, lit up by customs authorities in pursuance of the presidential requirement to ensure execution of customs legislation. However, this requirement applies not only to business companies, but to customs personnel as well. During the Board meeting of the FCS of Russia, consolidation of legality in law enforcement was defined as a priority task of the customs authorities of the Russian Federation.

The administrative authority of the FCS of Russia expects to overcome the practice of substituting legal operating procedures for administrative pressure measures, no matter how good the arguments in favor of those measures.

On the eve of Customs Officer’s Day, customs service veterans and managerial personnel of the FCS of Russia laid flowers at the memorial stone. A.Zherikhov, Head of the FCS of Russia, congratulated the customs authority personnel, wishing them “every success and good luck in all undertakings and pursuits for the benefit of development of the customs system and of the glory of the Russian state”.

 On 21st October, the FCS of Russia opened its own exhibition art gallery. It is expected to display artwork by customs officers (amateur painters), as well as of beginners and famous masters of pictorial art from Moscow and other regions of Russia. The exhibition art gallery was inaugurated with the presentation of the exposition of Antonina and Elena Levashovy, specializing in the genre of decorative needlework. The exhibition was opened by Vladimir Shamakhov, Deputy Head of the FCS of Russia. Antonina Levashova presented him with one of her paintings, which will be on permanent display in the gallery.