"Russia is not a country choked by rules. It is a country of relationships and, in this environment, you have to be prepared to adjust to the way the people do business. It's not just about what you know" says John Warren (Warren's Saussages) living and doing business in Russia for the last 17 years. *
In addition to language (it is almost impossible to start any business in Russia not knowing Russian), buerocracy, lack of transparancy, constantly changing complicated legislation, frequent replacements and appointments of officials of all levels, lack of relationships are the main fears of foreing businessmen in Russia. We decided to concolidate our own and other's experience with the biggest fear even for Russians involved in international economic activities - Russian Customs to make customs procedures related to one of the biggest markets in the world more understandable and easy.
*Original article 'Being a foreigner in Russia is no deterrent to making money'
Russian CustomsCustoms services are type of B2B activity strongly influencing efficiency of the business in whole. In Russia such services are rendered either officially by licensed companies working under own name or over the counter by individuals or groups of individuals using the name and stamp of real or dummy consignor or consignee.
Definitely importing / exporting company can establish customs departments - hire customs specialists or change duties of existing logistics staff, but this may lead to unnecessary expenses and risks, e.g. on trainings and salary, or to unwanted risks, e.g. most probably such employees will conduct “side business”.
Continuous changes in regulations and not finalized customs restructuring , multiple dismissals of customs executives and their replacements with former law enforcement and security agencies not only failed to become a remedy for old vices such as non-transparency, corruption and bureaucracy and created new problems such as lack of professional and practical experience, but resulted in further complication of permitting and approval procedures, unpredictability and non transparency of customs administration. That is why customs related activities require not only expertise and proficiency in customs formalities, knowledge of legislation but probably strong business connections are the most important for smooth import and export operations in Russia.
In this view, definitely outsourced or contracted customs services represent a beneficial solution for especially for foreign importers and exporters, feeling less confident and secure operating in Russia. Risks reduction, stability, assurance and intention to avoid any complications at most justify the choice of outsourced and contracted broker or customs brokerage services. Foreign companies first of all consider reliability, good standing and familiarity with the service provider; therefore usually their choice falls on well-known foreign legal firms, courier companies and those international freight forwarders operating in Russia. No doubt the cost of the services matters, especially in respect to the current economic situation in the world, but defining factor is intention to reduce possible risks including loss of business or profit furthered by Russian peculiarities.
For example, one French company decided to start selling their bicycles in Moscow, beginning of sales was scheduled to May. Importer and their Russian agent arranged all the necessary documents but nobody told French company that the documents should be in Russian. As result, customs proceedings were completed only in November, and the company failed to receive part of the scheduled revenues.
In general all customs services provided in Russia are rather standard and similar differing only by quality, reliability and expertise of provider. Unfortunately it is almost impossible to check this information in advance, and resources available to Russian companies are almost not accessible to foreigners. Russian companies choose the provider mostly based on the cost of the services that is why commonly the choice falls on “grey” or “black” schemes of work and unofficial brokers. Nevertheless the services rendered by official Russian customs brokers are sometimes even of a better quality due to perfect connections and familiarity with procedures – most of employees of such companies are former customs executives knowing procedures “from inside”. With this sometimes due to incomplete information from broker, failure on its requirements or just due to underestimating possible risks the loss caused by such unofficial cooperation exceed even worst expectation – very well known cases of such giant companies like Tri Kita, Arbat Prestij, Svyaznoi, East Line, Evroset, Tehnosila, Eldorado and others..
We consulted Russian brokers and consolidated the rules, so customs services in Russia so customs services in Russia will be easier, clearer, less complicated and risky for you – see this rules below.
Do not ship cargo and wait to receive confirmation for the cost of the customs services and instructions for air waybill (AWB) and other documents!!!
Avoiding this rule may lead to fines and penalties levied by Customs Authorities to your service provider and he will claim it from you.
- Contact your service provider at least 7 business days in advance. Official days off in Russia are Saturday and Sunday, and most of the companies are opened from 9 am to 7 pm.
- Most of the Russian customs brokers can render the services both in official or semiofficial ways; therefore it is very important to include all available information and every detail to request sent by you to customs broker.
First of all the broker may advice you the best way for customs proceedings, and, secondly, the cost of the services will be provided to you faster.
- Contact your consignee / shipper and check if they are registered with any Russian Customs Terminal or not. If yes, get the names of the terminals and check which documents you have to prepare (make sure that you are aware of the full set of documents);
- Provide Invoice or Packing list, if it is impossible by any reason – indicate the following information: quantity goods, country of origin, manufacturer’s name, brand name, invoice cost, etc.;
- Provide all available supporting documents: certificates, letters of origin, etc.;
- Full contact details of Consignee for import and Shipper for export, including names, cell phones numbers.
Calculations & Payment
- Normally broker having complete information on cargo will provide you with calculations within 24 hours. You may try to convince broker to prepare calculations faster as a special request.
- If you are seeking a DDP quotation based internationally recognized list of information like "Commodity + HS code + ECCN + Quantity + Weight + Invoice and Packign List" – take a note that it’s not sufficient information for providing DDP quotation. You will not be able to get even Customs Duty % amount. Reason is because anything what does relates to Russian Customs - can't be quoted with such limited information, so in case your Agent or Customs broker asking you to reply to 20-30 multiple questions - you need to do so, otherwise no quotation will be given. Moreover, there are no price lists are available for Russian Customs at all.
- You should forget about EU/US/ASIA customs brokerage fees of 100-150$ per shipment, in Russia average price for Customs Brokerage Fee is 1500$ per shipment. There are no way to handle any shipment via cargo for less than this amount. If you like to send 200kg of equipment, which costs only 700$, you still will be required to pay 1500$ for a brokerage customs clearance fee. Sometimes you might get customs duties included in to that amount if they are going to be so small. Once you receive initial quotation and agree for it with your partners, notify the broker and he will prepare and provide you final quotation indicating all applicable taxes, duties, charges and other dues.
- Customs services are always payable in advance. If you have long term and well established relations with broker or freight forwarder some acceptations are possible. Normally no customs services will commence before receipt of full payment.
- Estimating the total cost of the services add 6% surcharge for telegraphic or bank transfers to the quoted costs. Non or semi official brokers may agree to accept cash payments, which are strictly prohibited under the Russian law, and in this case the payables will be same with quoted costs.
Cargo Release (Import)
- Normally all customs proceedings will be completed within 2 – 3 days (in case if you follow all broker’s instructions).
- Sometimes, especially if you choose non-official brokers, the cargo may be released to the final consignee without any commercial document.
We studied information related to Russian customs, communicated and collected advices from several customs brokers and consumers of customs brokerage services and summarized received knowledge in this website. Russian Customs Code you can find here
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Thanks you for input!
This is really good information, I found what I was looking for. Thanks and good luck.
Sooooo usefull information! thank you!
Thanks, nice to know you - now I know what Russian Customs are!!!!