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. Last Updated: 07/27/2016

Retailers Seek Ways to Stop Smuggling

A crackdown by authorities on the smuggling of cell phones into the country is widening to include other electronics, ranging from microwave ovens to laptop computers.

Responding to pressure from the government, the country's largest retailers and foreign electronics manufacturers on Thursday reviewed measures to cut out illegal middlemen, which, experts say, will inevitably end up costing consumers more.

To lower the volume of illegal, or so-called gray, imports, electronics manufacturers should stop doing business with offshore distributors, said members of RATEK, Russia's association of consumer electronics retailers and producers.

Offshore distributors are more difficult for the state to control, and they often use such gray schemes as lowering the wholesale prices of electronics in customs declarations in order to knock down customs fees.

Another proposal made by RATEK entails importing merchandise directly, which would allow the association's members to avoid using middlemen altogether.

RATEK -- which includes such retail heavyweights as M-Video, MIR and Tekhnosila, as well global manufacturers like Intel -- is now in the process of forming working groups that would finalize the proposals as early as next month.

The move by the association comes one week after the Federal Customs Service flexed its muscles in the continued government crackdown on smuggling.

"The authorities made a very powerful move, and we cannot stay on the sidelines," said Anton Guskov, spokesman for RATEK, explaining the meeting's timing.

In a meeting with representatives of Samsung, Panasonic, Bosch and other foreign manufacturers on Sept. 14, customs officials urged producers to cooperate in the struggle to crack down on smugglers.

Analysts warned, however, that flushing out illegal imports would inevitably lead to price hikes. "It's clear that cutting out gray imports will lead to price increases," said Dmitry Yanin, executive committee chairman of the International Confederation of Consumer Protection Organizations.

Although it is too early to estimate the price increases, retail prices for smaller electronics are set to surge more than for large household appliances, he said.

As much as 88 percent of all digital cameras that enter Russia bypass or lower the required customs payments, according to RATEK. The share of gray imports among larger goods is lower: 13 percent of all microwaves and 5 percent of all refrigerators.

Mobile phone prices shot up in September after the Interior Ministry foiled a cell phone smuggling ring and promised to continue sniffing out illegal imports.

The government last week suspended Sheremetyevo Airport customs chief Igor Volkov and Nakhodka port customs chief Alexei Kotlyarov for a month, pending an investigation into smuggling, news agencies reported.