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Competitive Customs Regulation: Best Practices in the Asia-Pacific Region

September 07, 19:05 UTC+3
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Key conclusions

Russia’s customs practices correspond to global standards

“First off, Russia’s Federal Customs Service follows the recommendations of the World Customs Organization and its best global practices,” said Vladimir Bulavin, Head, Federal Customs Service.

Business responds positively to special Far East customs regulation

“Reducing the average time of customs operations is probably of interest for the business and is the most sensible. <...> At the same time, I would like to note this refers to risk-free deliveries,” Vladimir Bulavin said.

“We needed to open this crossing point within a fairly tight timeframe because we were progressing very rapidly with the project’s development. I must say we managed to succeed here. <…> The mode of operations and the sponsoring authorities, whose approach to a solution of the issues, played a significant role in this,” noted Denis Kurochkin, General Director, Beringpromugol.

“Upon presenting an electronic declaration, any problems that arise when crossing the border are related to the human factor and errors in documents accompanying the cargo. I haven't found anything to complain about in the way the customs functions over the one year of my work. The whole process takes place in an instant now,” said Yevgeny Sachkov, General Director, Eurasian Diamond Centre.

Challenges

Vladivostok free port zone does not cover water areas

“We are a resident with a specific kind of business and we import the material used for equipment from China. However, it turned out we can’t use or preference for the duty-free import of these materials. This is because we will use equipment on the water area. <…> I wrote last year and asked a question at the previous Eastern Economic Forum but the situation still remains the same. When will a clause be introduced into Article 4 of Law 212-FZ, an amendment regarding the recognition of water areas as the territory of the Vladivostok Free Port?” asked Elena Gubina, General Director, SeaLife.

Surge in duty-free goods turnover creates risks for domestic retail

“This flow [the flow of private goods] that grows multifold year-on-year at present has already turned into a major problem for the domestic retail sector. It turns out that hardly anybody wants to order an iPhone at М.Video [retailer] anymore, since it is possible to receive it by mail at a price 30 times cheaper than in a store. On the one hand, it’s a big advantage for consumers because it is possible to buy cheap goods without Russian taxes in Russia. On the other hand, we see that we are killing off our retail sphere,” noted Mikhail Orlov, Partner, Head of Tax and Legal at KPMG Russia.

Solutions

Unifying customs information systems and mutual data recognition

“The main issue arising now is that we need to achieve certain unification in operation of our information systems. Further interaction is connected with the large-scale information exchange in the first instance. Our continued interaction in the customs sphere directly depends on the ability of our specialists to coordinate electronic interactions,” Vladimir Bulavin said.

“We must handle information properly. We should jointly process information we need. <…> One of objectives is to achieve an opportunity for mutual recognition of data in this sphere. <…> This will facilitate our work and make it more reliable,” said Hiroshi Kishimoto, Deputy Director General of the Customs and Tariff Bureau, Ministry of Finance of Japan.

Streamlining rules for hauling goods over the Primorye transport corridors

“The construction projects for Primorye-1 and Primorye-2 international transport corridors should be prioritized in order to boost transit potential. <…> A relevant decree by the Russian government was issued, which calls for a major streamlining of rules for hauling goods over the aforementioned transport corridors,” Vladimir Bulavin said.

Use of big data technologies

“The world has already gone digital. In general terms, it is already possible to put all information into a digital format from the perspective of working in this sphere. Our tax authorities have solid experience in this area. <…> This should make it possible to cut back the role of customs on inspections and also, making it definitely possible to reduce time for us,” said Vadim Shvetsov, General Director, Member of the Board of Directors at SOLLERS. 

Simplifying customs procedures

“We should simplify procedures for the so-called ‘good agents’ in parallel. This is a challenging task. That is, we must provide an opportunity to fair and diligent agents of foreign economic activity to give a signal to us somehow. We should make narrower the framework of our tough control of dangerous elements and at the same time make all other things easier for the ‘good ones’, so to say,” Hiroshi Kishimoto noted.

“We would like to suggest considering the so-called ‘preliminary declaration’ system. This system will definitely make it possible to reduce time and labor intensity of the processes,” Vadim Shvetsov said.

“We have two projects with the Federal Customs Service that we are intensely developing now. This is an administration of customs duties for international import trade. <…> This sort of technology makes it possible to drive down the administrative costs of these procedure and improve the collection of customs duties,” said Nikolai Podguzov, General Director, Russian Post.

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