LOGISTICS

Russian Customs Brokers Will See No Crisis

By Olga Kalashnikova

Special to The St. Petersburg Times

Alexander Belenky / The St. Petersburg Times Lines of trucks waiting to pass through customs control at the Russian-Finnish border stretch for several kilometers, meaning drivers wait in line for days to cross the border.

Anyone who has ever left their home country to travel abroad and returned home knows what a customs point is — especially if their home country is Russia. Sometimes it can take hours to clear customs, even for a tourist. For vehicles carrying cargo, the process is far more complex and time-consuming.

For companies that trade abroad, it is easier, more efficient and even profitable to delegate their customs problems to another firm, as the procedures involved are labor-intensive and companies cannot manage without expert help. Only qualified specialists in customs registration are able to deal with this task.

The services of a customs broker are particularly necessary if the company does not have a special department to deal with such operations. Employing the services of a customs broker enables the company to minimize the expenses that inevitably arise when bringing goods through customs. What is more, the company is able to manage all the risks – financial, economic and personal.

“The services of a customs broker are a necessary part of the business processes for every company that has foreign trade affairs. In contrast to unaided customs registration, it is convenient, secure and avoids many problems and surprises at customs,” said Yelena Ivanova, head of the customs registration service at Eltrans Plus.

Companies that specialize in customs registration usually have essential contacts, even on a personal level, which ensures successful business. Customs brokers know and understand the law and all its nuances. Several years ago a special Customs Code was introduced. A mistake in this sphere can result in hefty fines and even prosecution, and naturally, companies do not usually want to take such a risk with their reputation. According to the law, Russian customs brokers can solve the same problem in various ways.

“Suppliers are interested not only in the specific service of customs registration, but in the transport and storage of the goods, and even subsequent delivery to the regions. Large-scale customs brokers can provide a whole range of logistics services,” said Ivanova.

Russian customs are notoriously problematic. Russian business ethics and customs still differ from those in the West, and the customs business has its own specific national character, which for many foreign companies is the decisive factor in choosing a mediator for this sphere of business.

Many companies turn to the services of a broker after having a negative experience of independent interaction with customs. This is often what inspires foreign companies to choose a Russian customs broker.

The range of services offered by a customs broker is usually standard, but companies should pay attention to the broker’s reputation and experience. Experts advise companies to choose on the basis of recommendation.

“Companies should, however, be very careful when choosing a customs broker. One should be aware that such services can only be provided by a certified corporation and is included on the list of customs brokers,” said Ivanova.

There is currently a problem emerging with so-called “grey brokers.”

“This is when an organization or even an individual helps a company that has foreign trade to solve all the customs problems with registration. Formally, all the customs operations are done by the company, while in fact everything is arranged by a ‘grey broker,’” said Yevgeny Privalov, head of international cargo shipments at DPD in Russia.

“Grey brokers” are also organizations that have competence in dealing with customs, but they are not officially certified.

“The main obstacle facing potential brokers is the high demands stipulated by the Customs Code. Customs fees of 50 million rubles must be paid, the firm must have an insurance document of civil responsibility at a cost of 20 million rubles. For small organizations, even those comprised of qualified specialists, these conditions are impossible to meet,” said Privalov.

There are, however, some brokers who do not even attempt to obtain certification, and without facing any risks are in a better position than even legal brokers.

“The Russian market is now becoming more transparent, and it is obvious that the future lies in professional companies that cooperate honestly with the state and other trade bodies,” said Ivanova.

The system of customs brokers is justified and is indeed one of the guarantors of the law’s enforcement.

“But legislation and practice show that if there are any doubts in the trustworthiness of the documents and information presented by the client, the first person taken to the administrative court will be the customs broker,” said Privalov.

“If this happens more than once, it can result in the broker losing its certified status story.”

Accordingly, specialists believe that the documents controlling the activity of customs brokers should be optimized.

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