The State Duma is trying to improve customs law in reference to the cost of goods. The amendments of tariff law carried the second reading. Time-out is in favor of the Customs. The imperfection of Russian legal system allows Customs officials to change voluntarily the rate of customs duties to a higher figure, as a rule. Now the procedures of customs evaluation are set by the Government. Besides the customs authority has the right of suspending all actions up to 3 months for defining customs applicant’s dutiable value correctness. All expenditures for this period are paid by the applicant.

Furthermore, five legal methods of customs value estimation are used to calculate the duty rate. If the Customs finds them inapplicable the customs value is estimated with the spare method. The latter consists in Customs’ tying the prices of any price reference book. It is stated in the law that the Customs provides the customs applicant with current price information available at the moment. According to new amendments the Customs practically loses the capability of voluntary setting the customs value estimation methods for imported goods and is to follow the legal detailed techniques eliminating misinterpretation.

Meanwhile the right to control the application of customs value estimation methods is reserved. It is not a secret the customs applicants try to undercut the price of goods in many cases for avoiding the customs duties. However all articles of law regarding the Customs’ activity suspension are eliminated. It is curious enough that the Federal Customs Service issued new order meanwhile the State Duma was considering the amendments of customs law. According to this order information about minimum prices of goods imported to Russia is confidential. The importers are afraid any goods might be included into so called at-risk group for the Customs officials to set their own price rates that would be unsuitable for foreign participants.

As a result the number of lawsuits between them and the Customs officials will rise sharply. New FSC document rejects the old order of State Customs Committee to set the limitations of customs value for mentioned groups of products. There was a long list of the products with minimum prices for them attached to the SCC order. The importer that knew of mismatch the current price for the product with the listed one had could have pre-shipment agreement with overhead organization on terms of customs declaration. In other words time was saved to avoid price reconcilement procedure on the boundary station. The procedure of customs clearance will reportedly become much more difficult with elimination of this order since all limitations of customs value are totalized now in so called system of risks control considering all problem situations occurred previously.

For instance, if there occurs a precedent of illegal undercutting the price of a particular consignment at the Customs it will be automatically forwarded to the system in question and be taken into account in future for inspecting identical goods. The main disadvantage of this system consists in its non-transparancy for the participants of market. Now the participants do not have a chance to know the minimum level of customs value since this information is “restricted” which means it is not for consideration of foreign economic activitity participants.

There does exist publicly-accessible price information FCS refers to. It includes claimed customs value only without presense of production cost. Now any goods transferred through a borderline may be classified risk group consistent while the merchants are misleaded as the experts state. The merchants are very curious of new regulations that are to be formulated for new customs law by the legislative establishment.

However it will be easier for honest customs applicants i.e. the proposed law is to confine the abuse of customs power. But it will be the way if there is the “direct effect” reference in law only. If the amendments, while using the document, allow to refer to subordinate acts as well as to FCS specification lettersthe participants will have to find new ways of “making arrangements” with the Customs. Thus the corruption in this sphere will be rather high in any case while the import prices will be increasing.

“In the West the customs value calculation is believed to be a contest rather than a tug-of-war in our country when business deceives and the officials interpret legislation violently,” – said Valery Draganov, ex-chairman of the Customs Committee and current chairman of Duma Committee on Economic Policy. – “We have some difficulties with law inforcement rather than new laws. Is is necessary to reach a consensus between business and political powers in these issues. But it is quite impossible as long as the Authority favors some persons.”