State Targets Illegal Car Imports

Regulations designed to stop pervasive evasion of customs duties by citizens importing cars came into force Friday, Anatoly Galaktionov, chairman of the customs control department, announced at a news conference.

He said many people importing cars had not paid any duties at all. The duties range from 10 percent to 15 percent of the value of the car.

"In 2000, out of 7,616 vehicles imported from the west to the Russian border, 4,418 evaded duties," Galaktionov said. "Drivers merely drove off and did not pay."

Izvestia newspaper suggested Friday the new regulations will considerably complicate the matter of purchasing a car abroad because buyers must go to customs offices twice, before and after leaving the country.

Previously, everything was taken care of at the border, where the buyer of the car presented documentation of the purchase.

On the first occasion they will apply to import a car and lodge a hefty deposit in the city where they live. On the second visit they will receive the deposit back if they have paid duties.

The amount of the deposit will vary in accordance with the value and age of their car from 1,000 euros to 15,000 euros ($1,170 to $17,600).

Galaktionov denied that the regulations will merely cause more problems for importers, saying the State Customs Committee had been compelled to act because of the widespread abuse.

"Now the situation is under our control," he said.

"No one should think that the Customs Committee is making its regulations unnecessarily strict or deliberately causing people difficulties," an official of the committee said at the conference.

Commercial banks have been granted licenses for the collection of the deposits. Galaktionov did not reveal which banks had won the tender for the collection of the deposits.

Consumer demand for cars exceeds the supply of cars made locally.

Mihail Tsitsevits, chairman of the board of directors of German auto-show organizers Frankfurt GmbH, told Vedomosti that Russians purchase 1.7 million cars a year, whereas the nation manufactures only 1 million cars annually.

The new regulation is part of the Customs Committee’s continued efforts to increase its income from the import of foreign cars.

On Jan. 16, the State Customs Committee closed a popular loophole used to import cars into Russia.

Russian citizens working abroad for extended periods were granted permission to import one car a year without paying customs duties. The exemption was exploited by organized crime groups that forced eligible citizens to serve as car importers.

According to customs statistics, losses to the budget resulting from that loophole totaled $120 million to $140 million last year.