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Coronavirus – Changes in the customs regulation and the EAEU – Russia

  • Russia
  • Coronavirus
  • Coronavirus - Country overview
  • Tax planning and consultancy

01-05-2020

Due to COVID-19 pandemic, Russia and the EAEU1 have adopted a number of customs regulation measures aimed at stimulating the importation of necessary goods to Russia and the EAEU, mainly through tariff regulation measures as well as restricting the exportation of a number of goods outside the common customs territory through non-tariff regulation measures. In addition, changes were introduced to the procedure for goods certification, and customs inspections were suspended.

The abovementioned measures were initially proposed in the Priority Action Plan approved by the Russian Government in March 20202. Most of the measures take effect by 30 September 2020 or alternatively by 30 June 2020.

Import-Related Measures

1. Exemption from import customs duty on goods used for prevention against the spread of COVID-19 and critical import goods

The Decision of the EEC Council 3 in respect of goods imported in order to prevent the spread of COVID-19, provides for exemption from4

| payment of import customs duties in case of importation of these goods

| providing certificates of state registration of goods that are subject to sanitary and epidemiological supervision (control) at the customs border

| confirmation of compliance with technical regulation measures to customs authorities

These benefits are provided if the following conditions are met:

| imported goods are placed under the customs procedure for release to domestic consumption and the goods declaration is registered by 30 September 2020 inclusive

| the intended use of the imported goods is confirmed by authorized executive authorities. In Russia, the following governmental bodies are authorized to issue such a confirmation:

  • the Ministry of Health of Russia, in relation to end-products
  • the Ministry of Industry and Trade of Russia, in relation to raw materials and materials and components used for the production of medicines and medical devices5

According to clarifications issued by the Federal Customs Service of Russia 6 documents on the intended use of goods are issued by the competent executive authorities of Russian regions, and must confirm that the goods will further be transferred free of charge to non-profit healthcare organizations (including medical institutions). Such organizations are hospital-type medical organizations that have been completely or partially converted to hospitalize patients with COVID-197.

The list of products covered by this measure contains a wide range of pharmaceutical and other products, including medicines and medical products themselves (vaccines, medical devices, disinfectants, etc.), as well as products used for the production of said medicines and products.

The so-called critical import goods were also exempted from paying import customs duties by a later Decision of the EEC Council 8 . These products include a number of medicines, medical products, and food products. The exemption is applicable when the products are subject to the customs procedure for release to domestic consumption, and the goods declaration is registered by 30 June 2020 inclusive.

2. Addition of new items to the list of medical goods, import and sale of which are exempt from VAT in Russia

By Government Decree9, additions were made to the list of medical products, which are exempted from VAT in Russia for both import and sale. COVID-19 tests as well as medicines for the treatment of COVID-19, protective equipment, and electronic thermometers were added to the list.

By analogy with the exemption from payment of import customs duties, the application of VAT exemption is possible if the imported goods are subject to the customs procedure for release to domestic consumption and the goods declaration is registered by 30 September 2020 inclusive, and the product’s intended use has been confirmed (see paragraph 1 of the Review).

Attention should be paid to the fact that the lists of medical products that are exempt from import customs duties and VAT do not match. These lists are adopted by different regulatory acts: Decision No. 21 of the EEC Council of 16 March 2020 in respect of import duties and Decree No. 419 of the Government of the Russian Federation of 02 April 2020 in respect of VAT, and are not identical. In both cases, the application of these benefits is intended to encourage imports in the absence of direct commercial benefits.

Export-Related Measures

3. Establishing a ban on the export of a number of protective and medical devices, as well as food products

In accordance with a Decision of the EEC Board10, the list of goods prohibited from exportation from the territory of the EAEU has been amended. Thus, until 30 September 2020, export from the territory of Russia is prohibited for:

| personal protective equipment, protective and disinfecting agents, as well as medical products and other materials11

| certain types of food products12

These measures are introduced in stages:

1. at the first stage, goods are included in the list of goods13 that are essential for the internal market of the EAEU and for which, in exceptional cases, temporary bans or quantitative restrictions on exports may be imposed. Thus, in accordance with the decision of the EEC Board, the list includes a number of new food products: food products from buckwheat, onions, garlic, turnips 14

2. at the second stage, a separate decision of the EEC Board was to be adopted in order to establish restrictive measures against the exportation of goods15. The relevant decisions were adopted by the EEC Board.

As noted in these decisions, the adoption of measures is conditioned on "an exceptional case that requires a rapid response in order to prevent the occurrence of a critical level of shortage of medical devices and personal protective equipment."

The ban on the export of goods from the customs territory of the EAEU does not apply, if such export of goods is carried out:

| within the framework of international transit traffic that begins and ends outside the EAEU, as well as goods of the EAEU that are transferred between the territories of the EAEU member countries through the territory of a non-EAEU member Countries

| to provide international humanitarian assistance to foreign countries based on decisions of the EAEU member countries

| by individuals for personal use

4. Limitations on the exportation of certain grain crops from Russia to non-EAEU states until 01 July 2020

By Government Decree16, Russia has established a quantitative limit (quota) in the amount of 7 million tons for the exportation from Russia to non-EAEU states of four grain crops: wheat and meslin (code 1001 EAEU CN of FEA), rye (code 1002 EAEU CN of FEA), barley (code 1003 EAEU CN of FEA), and corn (code 1005 EAEU CN of FEA), with the exception of their seeds, until 30 June 2020.

The distribution of the quota was conducted on the basis of goods declarations already provided to the customs authorities for export of these goods out of Russia. In connection with this, periodic customs declaration by means of filing of a temporary customs declaration when exporting the abovementioned goods out of EAEU was also temporarily suspended until 30 June 2020.

The following governmental bodies are authorized to control the use of non-tariff quotas:

| the Federal Customs Service of Russia, to monitor compliance with the quota when placing goods under the customs procedure for export

| the Ministry of Agriculture of Russia, for real-time publication of information on non-tariff quota utilization on its official website

According to information published on the official website of the Ministry of Agriculture on 26 April 2020 17 the non-tariff quota in the amount of 7 million tons for the export of grain out of Russia has now been fully utilized. After exhaustion of the quota, the export of wheat, meslin, rye, barley and corn to non-EAEU states is now stopped until 01 July 2020. The Federal Customs Service of Russia has stopped issuing new goods declarations for export purposes for these types of grain.

Customs Inspection Measures

5. Suspension of customs inspections

By governmental Decree 18, no scheduled or unscheduled field customs inspections are to be carried out in 2020, with the exception of unscheduled field customs inspections to be carried out on the following grounds:

| application by a person or entity to be included in the register of authorized economic operators

| application by a competent body of a non-EAEU state to conduct an inspection of a person or entity that has completed transactions related to the movement of goods across the customs border of the EAEU with a foreign person or entity

| risk of harm to the life or health of the population, or the occurrence of emergency situations of a natural or man-made nature

Previously scheduled field customs inspections shall be suspended, with the exception of inspections on the grounds specified above.

Technical Regulation Measures

6. Temporary changes in the procedure for goods certification and the provision of certificate of origin

Due to COVID-19 pandemic, and experts’ limited capacity to travel to manufacturing facilities to conduct mandatory certification procedures for production analysis and product sampling, the responsible authorities (the Ministry of Industry and Trade of Russia and the Ministry of Economic Development of Russia together with the Federal Service for Accreditation of Russia) issued joint Recommendations 19 for certification authorities and applicants for mandatory certification.

Specifically, the Recommendations provide for the following changes in certification procedure:

Scenario

Temporary measures

Certificate of conformity for serial products is valid, however, the deadline for the next scheduled inspection control has occurred or is going to occur during the period of COVID-19 pandemic

The inspection control is postponed for 6 months

Certificate for serial products expires during the period of COVID-19 pandemic

New serial certificate can be issued based if applicable on the positive results of the latest periodic assessment of such certified products

Certificate of conformity for products expired, or products entering the market for the first time

Application of certification schemes for serial products or for singular products depending on the object of certification

 

In addition, according to a Decision of the EEC Council 20,  in order to obtain tariff benefits, it is possible to provide an electronic or hard copy of the certificate of origin to confirm the origin of the goods by 30 September 2020, subject to the subsequent and mandatory provision of the original of the specified certificate no later than 6 months after the goods declaration was registered. This obligation to provide the original of the certificate of origin to the customs in a timely manner shall be confirmed by the declarant by hand or printed on the back of the copy of the certificate of origin (in any form).

Our services

Eversheds Sutherland provides support in the following areas of customs regulation:

  • new products launch in Russian market, including structuring of the supply chain in Russia and the EAEU, development and support of the most efficient customs and tax business models considering the international agreements
  • restructuring of the commercial, tax and customs business operation models in Russia and support of the practical implementation of the customs model in the customs authorities
  • analysis of disputable issues regarding the application of various customs procedures (temporary import, processing in the customs territory, processing outside the customs territory, etc.) including filing requests to the customs authorities
  • representing of companies in customs disputes (challenging of customs value, reimbursement of customs VAT, etc.)
  • |advice on issues related to application for and implementation of tariff and non-tariff regulation measures when importing goods into Russia and exporting goods from Russia

1 The Eurasian Economic Union

2 Plan of priority measures (actions) to ensure the sustainable development of the economy in the context of the deterioration of the situation due to the spread of a new coronavirus infection (approved by the Russian Government 17 March 2020)

3 The European Economic Commission

4 Decision of the EEC Council No. 21 of 16 March 2020

5 Resolution of the Government of Russia of 18 April 2020 No.545

6  Information on the official website of the Federal customs service of Russia: http://customs.ru/press/federal/document/233415

7 for example, the Order of the Moscow Department of health from 22 April 2020 №434

Decision of the EEC Council No.33 of 03 April 2020

9 Decree of the Government of the Russian Federation of 02 April 2020 No.419

10 Annex No. 1 to the decision of the EEC Board dated 21 April 2015 No.30

11 Decision of the EEC Board of 24 March 2020 No.41, Resolution of the Russian Government of 02 March 2020 No.223

12 Decision of the EEC Board of 31 March 2020 No.43

13 Approved by the decision of the Board of the EAEU dated 26.07.2016 No.83

14 Decision of the EEC Board of 31 March 2020 No.42

15 Information on the official website of the EEC: http://eurasian-studies.org/archives/9126

16 The Decree of the Government of the Russian Federation dated 31 March 2020 №385

17 Information on the official website of Ministry of Agriculture of the Russian Federation: http://mcx.ru/press-service/news/kvota-na-eksport-zerna-iz-rossii-vybrana-v-polnom-obeme/

18 Decree of the Government of the Russian Federation dated 03 April 2020 №438

19  Recommendations of Ministry of Industry and Trade of the Russian Federation and Ministry of Economic Development of the Russian Federation on temporary measures for conduction of inspection control, product sampling and other schedules works in the context of difficult epidemiological situation associated with the spread of a new coronavirus infection (COVID-19)

20 Decision of the EEC Council dated 03 April 2020 №36