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. Last Updated: 07/27/2016

State Defends Revamp Of Shuttle Trade Rules

Moscow's controversial new rules for collecting customs duties from so-called shuttle traders should boost federal revenue by at least 5 trillion rubles ($1 billion) a year, Economics Minister Yevgeny Yasin said Friday.

Yasin and state customs chief Anatoly Kruglov also sought to deflect criticism of the new scheme, saying it should not seriously affect small-time shuttle traders who bring in goods from abroad as part of their personal baggage for sale in Russia.

They said the new rules are intended to bring what has developed into a booming commercial trade under control and collect the taxes due from it.

Yasin said the goods brought into the country by small-time traders last year amounted to 53 trillion rubles, or about $11 billion. "This is one quarter to one third of our imports, but this kind of import is unorganized," he said.

New rules that took effect Aug.1 reduce the duty-free threshold to $1,000 from $2,000 for goods brought into Russia by shuttle traders, or chelnoki.

In an effort to streamline the process and reduce opportunities for bribery or disputes over the value of goods, shuttle traders can pay a flat 4 European currency units (about $5) per kilogram on goods weighing more than 50 kilograms.

"You just put your baggage on the scale," Kruglov said. "You see the weight immediately. You don't have to bargain with anyone. You just pay the customs tariff, and off you go."

The shuttle-trade lobby has objected vigorously to the new system, saying it will put people out of work. Organizers of shopping trips to cheap destinations such as Turkey and Korea say most chelnoki are individuals who took up the trade after losing their jobs in Russia's recent economic upheaval.

Kruglov contended that 60 to 70 percent of shuttle traders now work through brokers or middle-men and no longer even come into contact with customs authorities.

"They cross the border as private individuals, while their cargoes are taken care of by small and large companies that transport, customs-clear and deliver the goods in Russia," he said.

"We want that category of people to pay what they are due to pay."

Yasin conceded that the new duty-free threshhold "infringes on the interests" of shuttle traders, but said it was still more generous than the $400 limit imposed by U.S. customs and $300 by the European Union.