Russian customs regulation in the Customs Union context.

01.07.2010

Legal Update No.155.

BLP advises that, as members of the EurAsian economic community, Russia, Belorussia and Kazakhstan have set up an international treaty system, which underpins the Customs Union of these three states. One of the most important of these treaties is the Customs Union Customs Code Treaty dated 27 November 2009, which Russia and Kazakhstan have already ratified (Belorussia, as yet, has not). Together with this Treaty, the Customs Union Customs Code, and a number of related international treaties took effect on 1 July 2010.

The Customs Union Customs Code directs that all peculiar features of customs relations are subject to the national legislations of the Customs Union member states. In this connection, on 18 June 2010, the State Duma adopted the first reading of the Federal Bill “On Customs Regulation in the Russian Federation”, which is expected to be introduced on 1 July 2010 but not earlier than its official publication date.

The federal law will reflect significant changes in the Russian customs law and parallel legal provisions.

Conceptually, it is underlpinned by the following priorities:

  • ensure to the Russian Federation economic security in the conduct of foreign trade in goods;
  • avoid any increase of the burden on businesses as compared with the Russian Federation Customs Code; provide for customs regulation that would not encumber business more than in Belorussia and Kazakhstan;
  • simplify the customs procedures relating to export of duty exempt goods and import of high technology and innovative goods;
  • extend the rights of the RF President and RF Government in the customs regulation area.

In a number of cases, the new customs legislation contemplates new approaches with regard to customs clearance of goods. It also introduces new customs institutions and concepts.

For example, there is a “national residency” principle, which implies that customs clearance may be effected in the country of registration of the foreign economic activity participant only. This means, that a RF resident may not, on its own, complete customs clearance of goods and release the goods into free circulation in, for example, Kazakhstan.

A number of changes have been introduced in the procedures for goods declaration, adjustment of goods declaration data, customs procedure (eg the customs transit) declaration, determining and supporting customs value of goods (in particular, the new rules provide for deferred customs value decisions, which would allow determination of the customs value after the acceptance of the customs declaration and release of the goods, which would significantly simplify, customs clearance of goods subject to licence payments), etc.

The new customs legislation envisages new participants, including “authorised economic operator” and “customs representative”, etc.

However, a number of existing Russian customs provisions remain in full force and effect, including preliminary and periodic customs declaration of goods, submission of incomplete customs declarations, declaration of unassembled or incomplete goods by consignments under a single goods classification code, etc.).

The new federal law is the basic customs legislation act of the Russian Federation. However, it does not provide solutions for the applicability of the current RF Customs Code or possibilities for aligned application of both acts or consistent application of the new federal law.

For issues relating to taxes chargeable on moving goods across the customs border, the federal law contains references to the RF Tax Code provisions, without making any amendments therein; however, no account has been taken of the fact that the RF Tax Code itself stipulates that such taxes are governed by the RF Customs Code.

In this connection, it should be noted that no bill on introducing amendments in the existing law of the Russian Federation, following the introduction of the customs law, has been submitted to the State Duma.

Yet, it should be kept in mind that in submitting a federal bill, it is necessary to indicate in the supporting materials that the adoption of the new federal law would require:

  • amendment of the RF Customs Code, RF Tax Code, RF Administrative Offences Code and RF Criminal Code;
  • amendment of over 30 other federal laws (on foreign investments and on special economic zones, etc.);
  • amendment of 190 Presidential Edicts and Governmental Decrees;
  • adoption of one federal law, one Presidential Edict and 56 Governmental Decrees.

Further clarification with regard to the Customs Union operation and customs regulation development will be provided in the resolutions of the supreme Customs Union body whose summit meeting is scheduled for 5 July 2010 in Astana (Kazakhstan).

Furthermore, should Belorussia postpone the introduction of the Customs Union Customs Code, Russia has prepared a draft resolution of the RF Government, which would introduce, starting from 1 July 2010, a full-fledged customs control over goods on the Russian-Belorussian border. This resolution would also stipulate the places and procedure for goods customs control in the relationship of Russia with Belorussia and Kazakhstan. In particular, this procedure would contemplate that in this relationship a carrier will have to provide for customs clearance the same documents and information, which are required in the relevant cases by the customs law of the Customs Union. Any failure to provide such documents would entail adverse consequences for the relevant parties (prohibition on importation of goods, idle time of transport means, additional customs fees and customs clearance of transit goods from the passage point on the Russian Federation border to the internal customs clearance authority, etc).

For further information, please contact:

Vladimir Tchikine, Partner,
Customs and forex regulation,
Goltsblat BLP,
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

Elena Belozerova, Associate Director,
Customs and forex regulation,
Goltsblat BLP,
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

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