Customs Updates from St. Petersburg Port

Here are some interesting tidbits about Russian Customs gleaned from the reading the on-line newspaper, Fontanka.ru, found at www.fontanka.ru.

According to a March 3 report, the Federal Customs Service contributed 416 billion rubles into the Russian government budget for the first two months of 2009 – 36% less than for the same period in 2008. The FCS brought in 50.7% of the total Russian state budget in 2008, or 4.7 trillion rubles
www.fontanka.ru/2008/04/23/099/

The Federal Customs Service opens a large number of administrative cases against cargo for various suspected contraband activities, as I have written about in previous blogs. But just how high is the arrest rate? A Northwest Customs report from 2008 states that 2644 cases were opened in 3 months, which works out to about 10,500 cases per year. Most cases, the report states, are opened regarding wood products, computer technology, meat, and fish, items with cultural value and clothes and shoes imported from East Asia.

During the same period, Northwest Customs opened up 255 criminal cases, or about 85 per month, and confiscated 38 kilograms of narcotics.
www.fontanka.ru/2009/03/02/154/

For those of you wondering just exactly why the Russian Federal Customs Service arrests cargo, here is an insightful little piece. Baltic Customs in the First Container Terminal in St. Petersburg arrested 80 tons of contraband Chinese towels and bedspreads during the week of March 19. The towels and bedspreads were listed in the customs declaration as textiles and textile materials. Customs is deciding whether to press criminal charges.

Like a good investigator, I looked at the Harmonized Code for the towels and bedspreads. They fall under Section XI Textiles and textile articles, but not under Chapter 54, “Man-made filaments.” In fact, the proper category would have been Chapter 63, “Other made-up textile articles; sets; worn clothing and worn textile articles; rags.” I had to dig into the chapter 63, though, down to item 6302. “Bed linen, table linen, toilet linen and kitchen linen” to find the right classification.

It is easy to see why an importer would not want to list his cargo as worn clothing or rags, and not at all obvious to find the distinction. What is obvious is that the importer will pay a fine to Customs – about $3000 – and demurrage charges to the container carrier for the 6 shipping containers that will sit months in port while the case is resolved.
http:// www.fontanka.ru/2009/03/19/071/

One fact the Federal Customs Service may be proud of is its low rating among Russian Federation officials caught taking bribes for 2008. First place honors go to officers of the Militia, Russia’s version of the police. Out of a total 1300 prosecutions for taking bribes in 2008 (a record for Russia), the Militia accounted for thirty one percent. The World Economic Growth Competiveness Index 2007-2008 ranked Russia 111th out of 131 countries in the reliability of law enforcement.

Russian Customs accounted for only two percent, which no doubt accounts for its high World Bank Doing Business 2008 ranking of 158 out of 178 countries in regards to the ease of trading across borders.

Eighty one per cent of the prosecutions, the article notes, were for bribes of less than 30 thousand rubles, or about one thousand dollars US at average exchange rates. This is another sure sign that democracy and reform are on the march in millennial Russia.

www.fontanka.ru/2009/01/28/128/