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. Last Updated: 07/27/2016

Customs Declares Dutch Flower War

Call it the Great Tulip War.

The State Customs Committee is targeting the import of Dutch flowers into Moscow in an attempt to clip its legal share of the city’s estimated $200 million-a-year flower industry.

Decree No. 670, which customs has already registered with the Justice Ministry, limits to only three the number of customs posts in Moscow and the Moscow region through which flowers from Holland can pass.

The decree, which will come into effect 30 days after it is officially published, strikes flower importers as particularly strange because it only covers blossoms from the Netherlands.

According to customs statistics, 4,935 tons of flowers were imported in 1999, excluding the Commonwealth of Independent States. Of these, 3,350 tons, or 67 percent, came from Holland.

But nearly all imported flowers, including those from Ecuador and Colombia, are bought at Dutch auctions, which is why customs officials consider them to be Dutch, said Sergei Batenkov, manager of Amadei, a flower importer.

The decree had flower importers puzzled because it only covers the Netherlands.

Truly Dutch-grown flowers are not as widespread on the Russian market as officials apparently believe, said Sergei Stain, director of Business-Bouquet, another flower company. For example, he said that 70 percent of roses sold in Russia come from Ecuador. And carnations mostly come from either Ecuador or Colombia.

Customs officials said the new decree was issued because they were upset by the fact that the majority of imported flowers are labeled as "moss" or "greenery." The tariff on cut flowers is five times higher — 25 percent — than the tariff on flower leaves, branches or moss.

In the new decree, customs sets the rate for both classifications at 15 percent, which, officials hope, will encourage companies to officially register their flowers. But many importers fear that some of their dodgier colleagues will stick to half-legal and illegal ways of smuggling in their flowers — a fear evidently shared by customs officials.

Originally, five customs posts were selected to handle all Moscow flower traffic. But two of the five, which both belong to the Odintsovo Customs Service, were dissolved for furniture-registration violations as the decree was passing the Justice Ministry.

Business-Bouquet’s Stain said he hadn’t even heard of the new customs decree, but said that "if such a decree does exist, then it creates serious problems for legal flower importers — and it doesn’t stop the smuggling."

"There will always be a loophole in legislation," said another importer, who asked not to be identified. "If registration in Moscow starts to be a problem, then all the so-called Dutch flowers will become Ecuadorian and then can be taken to any customs post," the importer said.

"No one prevents you from registering a transaction, say, in Germany and receiving the necessary papers there. Besides, the new regulations concerning Dutch flowers don’t affect other parts of the country. The cargo can be registered en route to the capital — in Smolensk or Mozhaisk."

Last year, imported "cut flowers and buds, fit for making bouquets" — as customs lists them — were worth $10.4 million, while "other live plants" were worth $7.7 million. But according to research done by flower specialist GfK MR Russia, the Moscow flower market alone is worth some $200 million.