On the Federal law "On the Customs Regulation in the Russian Federation"

On 27 November 2010 the RF President, Dmitriy Medvedev, signed a Federal Law "On the Customs Regulation in the Russian Federation". The Law was developed in order to ensure implementation by the Russian Federation of its international obligations in compliance with Russia’s membership in the Customs Union. The Law aimed at the regulation of certain legal relationships and setting up of additional conditions, requirements or specifics for regulation in Russia in order to ensure economic security and resolution of other important tasks in the customs sphere. The latter includes ensuring rights and interests of individuals whose activity is directly of indirectly involved with the foreign trade.

This Federal Law is the principal legislative act of the Russian Federation in the customs sphere. It embraces main principles for goods transfer in case of imports to the RF and exports fr om the RF and transshipment through Russia’s territory under customs control, procedure for determining the country of origin of goods, use of customs procedures under the Customs Union.

The norms of the Law are based on the norms and principles of International Convention on Simplification and Harmonization of Customs Procedures of 18 May 1973 in the version of the Protocol on Introduction of Amendments in the International Convention on Simplification and Harmonization of Customs Procedures of 26 June 1999 (The Revised Kyoto Convention).

This Federal Law marks significant changes in Russian customs legislation and adjacent legislations. It focuses on the following priorities:
•    ensure economic security of the RF in foreign trade;
•    not to increase burden on business in comparison with the RF Customs Code, provide customs regulation which burdens business not more than in Belorussia and Kazakhstan;
•    simplify customs procedures in export of goods which are not levied with customs export duties and in case of import of high tech and innovation goods;
•    provide business with the right to affect formation of customs rules and formation and implementation of customs rules.

It provides comfortable conditions for transition of Russian individuals engaged in activities subject to customs regulation to new rules marked by amended legislation. It sets leveled criteria in case they are struck off the register. In particular, now the norm responsible for striking individuals off the register who are engaged in activity which is subject to customs regulation due to commitment by these individuals of administrative violations is replaced with administrative penalty.

The Law includes norms which determine procedure for the use of special simplifications by authorized economic operators including closure of customs procedure for customs transit, procedure for obtaining this status and inclusion in the Register of authorized economic operators and procedure for striking them off the register. Moreover, it reflects procedure for the implementation by the authorized economic operators of accounting system and submission to the customs authorities of accounts as well as requirements to warehouses wh ere authorized economic operators keep goods. Requirements are set for the facilities, equipment and location of temporary warehouses, customs warehouses and duty free shops.

The Federal Law boasts of a number of directions aimed at stimulating innovation activity of Russian enterprises.

For instance, Article 208 gives the right to submit documents confirming legal capacity of individuals (statutory, constituent and other types of instruments) solely once when submitting to any customs body authorized accepting customs declarations and exhaustive list of such documents. This simplifies procedure for documents submission, reduces the number of copies subject to submission to customs bodies allows verifying legal capacity of individuals for customs transactions.

 Article 232 sets simplified procedure for customs clearance of non-primary export goods which are not levied export customs duties. This simplification means a reduced list of documents to submit with customs declaration, reduced information which is subject to customs declaration. It is specially specified that in case of non-primary goods declaration which are not levied customs export duties, customs value is not determined is not declared and is not supported.

Law "On the Customs Regulation in the Russian Federation" should have come into effect on 1 July 2010. However, published draft law developed by the Federal Customs Service received a great deal of criticisms from the business community. Discrepancies with the Customs Union’s Customs Code have been noted. As a result, the Law "On the Customs Regulation in the Russian Federation" will come into effect on 29 December 2010.

Nadezhda Volovik – Head of Foreign Economic Activity Division