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. Last Updated: 07/27/2016

Customs Revamps Clearance System

Aiming to improve collection rates and cut down on clearance times, the State Customs Committee will next year introduce a green corridor for trusted importers and clear more goods close to their point of entry, Russia's top customs official said Monday.

Outlining an ambitious 10-step plan to revamp one of the biggest obstacles to doing business in Russia, State Customs Committee chief Valery Draganov said his agency is now working on the criteria for selecting the 150 to 200 companies that will be allowed to use a special green corridor when importing goods.

In addition to introducing the green corridor, Draganov's plan calls for halving clearance times by simplifying customs procedures, cracking down on alcohol smuggling and carrying out more customs clearance at the point of entry instead of at the point of destination.

These steps will allow the customs service to collect the 191 billion rubles ($9.1 billion at Tuesday's official rate) of revenues written into the 1999 draft budget, Draganov said.

That target is well above the 80.9 billion rubles the customs service is expected to collect for 1998. As of last Saturday, 80.3 billion rubles had been collected, Draganov said.

Under the green corridor plan, customs officials would perform random checks instead of thorough inspections on shipments and allow importers to claim their goods before the actual payment of customs duties.

This would be a massive boon to any import company, allowing it to cut in half the time that goods normally await clearance in customs warehouses. Most goods take from one to seven days to clear customs, although some importers have reported delays of two weeks.

However, the green corridor system would not lead to an absence of control, Draganov said.

"We will unobtrusively monitor the activities [of these companies]," he said, adding that companies who abused their special status would be punished.

Importers have hailed the plan.

"This is a great idea," said one importer from northwestern Russia who asked not to be identified.

"It will of course speed clearance and work for the good image of the firms which will get on the list of trusted companies.

"I think the customs committee is trying to be move closer to reality: I don't believe that there is a single company in Russia whichpays off all its customs fees and duties. Introducing this green corridor sort of openly recognizes this fact."

While the corridor is mostly at moving goods more rapidly through customs, the plan to clear more imports at sites close to point of entry aims to close off a major source of revenue loss - the practice of registering goods at point of entry and then clearing them at destination.

Large amounts of imported goods simply disappear in between the border and their declared destinations, according to the General Prosecutor's Office.

A three-month audit conducted by the prosecutor's office in the beginning of 1998 into just one of Russia's 10 customs departments - the northwest department - showed that of the 1,060 cargo consignments that they checked, only 40 of them were cleared fully at the customs department with jurisdiction over their destination.

The rest of the cargoes were cleared either at "dramatically decreased" prices, or, in a small number of cases, never cleared at all, said General Nikolai Khilkov, deputy head of a department in the General Prosecutor's Office.

As a result, $87 million worth of revenues were lost, he said.

Officials at the prosecutor's office could not say how many cargo consignments normally come through the northwest department in a three-month period, nor could they assign a value to the import stream.

"We asked [for such figures], but the State Customs Committee never provided them," Khilkov said in an interview.

Meanwhile, the customs service has reacted to the government's decision to tighten control over alcohol imports by "putting up a strong barrier to the smuggling of spirits on the Russian-Kazakh border, fully blocking the channels for the illegal importation of alcohol from Georgia and launched operations on the Russian-Ukrainian border," Draganov said.

These measures led to a 25 percent increase in domestic excise revenues in November and December, he said.

In the period from May to December, the customs service uncovered 99,145 violations of customs regulations goods and transport vehicles with a combined worth of 5.7 billion rubles were confiscated.