Export to Russia has its pitfalls—even though the country is a member of the WTO. Instead of reducing tariffs, Russia makes access to the market of the Russian Federation increasingly difficult by adding new regulations and fees. Markt und Mittelstand magazine (Market and Medium-Sized Companies) recommends to keep five points in mind when exporting to Russia:
The first hurdle for medium-sized companies that want to export to Russia is the requirement of a Russian subsidiary. Companies that are not represented in Russia have to handle customs procedures through a Russian trade partner, according to Markt und Mittelstand. This works best when the transport of the goods is jointly prepared with the Russian partner. This includes, in particularly, complete preparation of the customs documentation. The internet site of Markt und Mittelstand provides a checklist for these documents. When selecting a hauler, a partner with experience in exporting to Russia should be chosen..
Export to Russia: Watch Out for the Customs Broker!
It may happen that the Russian trade partner contracts a so-called customs broker to handle the customs procedures. This customs broker assumes responsibility for the export, according to Markt und Mittelstand. However, there is the risk of “gray customs clearance”; i.e., documents may disappear, and the German company may not receive an export certificate for its goods. Information concerning the broker and his business activities is therefore essential for the exporting company. The most important information concerning Russian customs law can be found on the internet portal tamognia.ru.
Language may pose a third hurdle for exports to Russia. All export documents must be provided in Russian. Customs tariff numbers may cause problems, as the Russian and German customs tariff numbers do not correspond. The Russian number has, for example, two additional digits, according to Markt und Mittelstand. Next issue: the manufacturer usually issues several customs tariff numbers when a machine is sent in several parts. However, the Russian customs officials see this machine as a unit and want to have it declared that way. Exporters should clarify such issues in advance. They also should take care of product certificates in due time. Information can be obtained from the customs authorities.
Customs Terminals: In Short Supply in Greater Moscow
The lack of customs terminals in Russia is a practical problem – in particular in Greater Moscow. This often hampers speedy customs clearance. It is therefore often useful to use the rural regions as an alternative place for customs clearance. Caution: the broker or importer must be registered at the customs terminal where the goods are to be declared. Markt und Mittelstand recommends to obtain registrations for several customs terminals. The procedure takes three days and can be concluded in electronic form. It has to be completed before the goods arrive at the customs terminal.
The high fees in Russia are very annoying. Almost every step costs money: wrong documents, missing translations, unannounced deliveries. “Every entry, exit, and intermediate storage in a customs store costs extra” reports Markt und Mittelstand. And what’s even worse, when a mistake is not immediately remedied, the procedure might be stopped for several days. All import fees must furthermore be paid in full before the goods can start moving again. Increasing the customs value is a popular pastime of Russian customs officials. Details concerning the classification of the goods should therefore be cleared with the broker in advance of the customs procedure. Additional costs may arise when the exported goods require a customs escort. This is required when the value of the goods exceeds 60 000 €. It may cost up to 3 000 €. Further information regarding import fees is provided on the internet.