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. Last Updated: 07/27/2016

Customs Reap Confusion's Proceeds

Customs officials collected at least $6,500 for a non-existent tax on foreigners' personal possessions Wednesday, as the mistaken 60 percent duty continued to be levied and the top customs official who had promised refunds said he did not have time to deal with the matter.


Moscow customs inspectors forced a Masterfoods executive to pay $6,500 in duties to bring in his personal possessions, according to Simon Slond, director of Voerman International Moving, which oversaw the move.


Moving companies estimate that foreigners have paid hundreds of thousands of dollars in the non-existent tax and say the total continues to grow. The highest reported payment to date by a single individual has been $16,000.


Government rules, confirmed over the past week in interviews with top customs officials, allow foreigners to import personal effects without taxation provided they export the goods when leaving Russia. An "Obligation for Return Export" document issued upon arrival should be produced when leaving to avoid difficulties.


Yet customs inspectors refused to issue the document this week for the Masterfoods executive despite continued protests, Slond said.


"There was no further argument possible," said Slond, who like many moving company officials is angered and perplexed by the random application of duties. The choice was "either we have to fly it back to Canada, or pay the taxes."


A spokesman for Masterfoods, the producer of Snickers bars and other products, said the company was surprised by the charge it had been forced to pay.


"It is somewhat unfortunate because the person is certainly a temporary," said Nikka von Liemandt.


Last week, the head of the State Customs Committee's legal department, Vladimir Galdin, pledged to refund anyone forced to pay the 60 percent duty in violation of the Russian code. Yet moving company officials said Galdin has been unresponsive when contacted for assistance since then.


On Wednesday, Galdin said in an interview that despite his previous pledge he was too busy with other problems to worry about overcharged foreigners.


"I'm losing a lot of time on this question," Galdin said.


Russia is the only country worldwide to insist on such a high tax to move personal possessions.


The head of the State Customs Committee, Anatoly Kruglov, has yet to weigh in on the issue. From the beginning of this week, his office has told moving officials and journalists that he is ill. A secretary told another caller Wednesday that he was attending government meetings.


Customs officials did have time, however, to organize the first in a series of oath-taking ceremonies for their personnel that are aimed at increasing the responsibility of the service's inspectors.


A spokeswoman for customs said the oath of loyalty and discipline was part of efforts to beef up the service in the wake of the Soviet Union's collapse. She said the oath accompanies increased police powers for the customs, including the right to bear arms, authorized by the government a year ago.


"A person who swears an oath carries a big responsibility for their work," said spokeswoman Antonina Yeftigneyeva. "We are also hoping that the oath will assist in the struggle with wrong-doing among customs agents."