Home / Doing business in Russia 2020 / Customs regulations / Trade between EEU and non-EEU countries
  1. Introduction
    1. Political and administrative structure
    2. Legal environment
  2. Common forms of business structures for foreign investors
    1. Main types of structure
    2. Registration, liquidation and reorganisation of business structures
    3. Shareholders’ and participants’ agreements
    4. Strategic industries
  3. Anti-monopoly issues
    1. General legal and regulatory framework
    2. Scope of application of the Competition Law
    3. Anti-competitive practices and restriction of competition
    4. Liability
  4. Tax system
    1. General approach
    2. Corporate taxation
    3. Incentives
    4. Special tax regimes
    5. Taxation of individuals
    6. Double taxation treaties
  5. Customs regulations
    1. General approach
    2. Trade between EEU and non-EEU countries
    3. Mutual trade between the EEU members
  6. Currency control
    1. Foreign currency transactions
    2. Consequences of breach/Penalties
  7. Lending in Russia
    1. Lending documents and governing law
    2. Jurisdiction
    3. International finance transactions and repatriation requirements
    4. Security interests
    5. Recognition of security trusts
    6. Syndicated loans
    7. Enforcement
    8. Suretyships and guarantees
    9. Bankruptcy considerations
    10. Other lending related issues
  8. Employment and migration
    1. Formalising the employment relationship
    2. Managing employment relationships
    3. Terminating an employment agreement
    4. Specifics of employing foreign nationals
  9. Personal data protection
    1. General approach
    2. Scope of the Data Protection Law
    3. Liability
    4. Right to be forgotten
  10. Intellectual property
    1. General approach
    2. Contractual aspects of intellectual property rights
    3. Rights over the results of intellectual activity
    4. Company names, trade names, trademarks and appellations of origin
    5. Intellectual property rights infringements
    6. IP Court
  11. Advertising issues
    1. General approach
    2. Scope of application of the Advertising Law
    3. Violations of the Advertising Law
    4. Liability
  12. Anti-corruption and compliance
    1. General approach
    2. Legal framework
    3. Compliance requirements for companies
    4. Concept of corruption in Russian law
    5. Possible targets of bribery
    6. Liability and penalties for corruption
    7. Example of sector-specific anti-corruption measures
  13. Real estate and construction
    1. Rights to real estate
    2. Real estate transactions
    3. Resolution of real estate disputes
    4. Planning and construction issues
  14. Corporate bankruptcy
    1. Insolvency criteria
    2. Stages of bankruptcy proceedings
  15. Import substitution and production localisation in Russia
    1. Measures affecting goods importation and current import substitution legislation
    2. Localisation incentives
    3. Sector-specific impact of import restrictions and localisation requirements
  16. Banking sector
    1. Legislative and regulatory framework
    2. Licensing and operations
    3. Deposit insurance
    4. The anti-money laundering law
    5. Bank secrecy
    6. FATCA and CRS
  17. Environment, energy efficiency and renewables
    1. Environment
    2. Energy efficiency
    3. Renewables
  18. Infrastructure and public private partnerships
    1. General approach
    2. Key PPP legislation
    3. Russian PPP environment
    4. Financing
    5. Legal issues
    6. Prospects for infrastructure projects
  19. Oil & gas
    1. Legislative framework
    2. Ownership and licensing
    3. Restrictions on foreign investors
    4. Licences
    5. PSAs

Key contacts

Contact
Safaryan Hayk
Hayk Safaryan
Partner
Head of Customs

Trade between EEU and non-EEU countries

Most commonly used customs procedures

Overall, there are 17 types of customs procedures, including the import and export procedures established by the EEU Customs Code.

Below, we give a brief description of the most commonly used customs procedures and an overview of the general features of importing and exporting.

Release for internal consumption

Importation of goods for internal consumption is a procedure which provides for the foreign goods placed under it to be located and used on the customs territory of the EEU without restrictions as to their use and disposal, provided that all applicable customs duties and taxes have been paid.

Customs transit

Customs transit is a procedure under which goods are transported for a specified period1, under the control of the customs authorities, over the customs territory of the EEU without taxes, customs or other kinds of duties (special, compensatory and anti-dumping) being paid. Under this procedure, prohibitions and restrictions can apply.

Customs warehouse

Customs warehouse is a procedure under which foreign goods are stored at a customs warehouse for a specified period without taxes, customs or other kinds of duties (special, compensatory and anti-dumping) being paid.

Goods may not be under the customs warehouse regime for a period exceeding three years, with an option to extend this period with the permission of the customs authorities. Goods with a limited useful life and/or sale duration must be assigned to other customs regimes and shipped from the customs warehouse at least 180 days prior to the expiration of such period.

Temporary import

Temporary import is a procedure under which foreign goods are temporarily located and used on the territory of the EEU with a conditional customs duties exemption.

The customs exemption can be full or partial and depends on the type of imported goods.
As a general rule, goods may not be under the temporary import regime for a period exceeding two years, with an option to complete this regime before the expiry of the two-year period by switching to another customs procedure.

Importing

 
Declaring procedures

Under the EEU Customs Code, declaration procedures must be completed in the country where the importing company is registered. Therefore, when importing goods to Russia (or to the customs territory of the EEU) a Russian-based company must fulfil customs clearance formalities for imported goods at an appropriate customs office in Russia.

In addition, when imported goods cross the customs border of the EEU in Armenia, Belarus, Kazakhstan or Kyrgyzstan, a border post at the relevant country must fulfil the procedure for the internal customs transit of the imported goods to the destination point within Russia, i.e. to the customs point where the imported goods will be cleared.

Customs payments (VAT, customs and excise duties)

When goods are imported into the EEU from non-EEU countries, customs payments are made (i) on the territory of the member state whose customs authorities release the goods; and (ii) in the currency of that member state.

The forms and the timeframes for customs payment are determined by the legislation of the respective member state. For instance, under Russian law, customs payments for goods imported into Russia must be made before the customs declaration is submitted to the Russian customs authorities.

VAT, customs duties and excise duties must be paid by separate payment orders. VAT and excise duties are to be paid to the Russian budget, whilst customs duties are transferred to a special accumulation account.

Customs value

The customs value of goods imported into the EEU is determined by Chapter 5 of the EEU Customs Code and by default consists of the price of the goods as well as royalty, insurance and transportation expenses.

To minimise the risk of miscalculating the customs value, importers can use the option to obtain a ruling on the applicable custom value methodology from the customs authorities.

In addition, when the imported goods are designed for release for internal consumption and their value is unknown upon import, the importer can apply the deferred customs value regime. This means that a preliminary customs value will be defined preliminarily by the declarant upon import, and the difference, if any, will be paid after the release of the goods.

The Russian customs authorities often try to challenge the customs value of the goods. When they increase the customs value, this may be contested in court.

Import duties

The EEU member states are obliged to apply the common customs tariff and unified nomenclature of goods to goods imported into the EEU and to the customs value of such goods.

Tariff privileges

Certain goods imported into the EEU may be subject to tariff privileges, such as exemptions from, or reductions in, import duties.

Tariff preferences

Goods originating from developing countries and the least developed countries fall within the unified system of tariff preferences of the EEU.

The list of such goods is set by the Eurasian Economic Commission.

Non-tariff restrictions

Before a Russian-based company imports goods into the EEU, it is obliged to review its compliance with any existing limitations to the importation of certain goods to Russia (e.g. quotas, special protective, anti-dumping and compensatory measures) and obtain all necessary authorisations and licences.

In connection with non-tariff regulation, the basic trend has been to specify and facilitate the registration procedure, in particular for declaration and certification. The aim is to provide for one non-tariff restriction for conformity confirmation (registration, declaration or certification) for each product at the EEU level.

Restrictions on the import of certain goods

The importation into Russia of certain agricultural products, raw materials and foodstuffs which originate from the USA, the EU, Canada, Australia, Norway, Ukraine, Albania, Montenegro, Iceland, Liechtenstein and Turkey is prohibited until 31 December 2020 (Please see the Import substitution and production localisation in Russia chapter). The end date of the food embargo has, however, been consistently postponed.

To ensure the fulfilment of the above restrictions, “sanctioned products” imported into Russia will be destroyed.

Exporting

 
Declaring procedures

When goods are exported from Russia to countries outside the EEU, Russian-based companies must fulfil their customs clearance formalities for exported goods at an appropriate customs office within Russia.

Any goods being exported will need to comply with the relevant customs procedures. When the goods leave the customs territory of the EEU, the customs authorities located on the border of the EEU make corresponding notes on the export customs declaration.

Customs value

The customs value of goods exported from the EEU by a Russian-based company is determined under the internal legislation of the Russian Federation and consists of the cost of the goods as well as royalty, insurance and transportation expenses.

The Russian customs authorities often try to challenge the customs value of the goods. When they increase the customs value, this may be contested in court.

Export customs duties and payment

Export duties are to be paid to the country from which the goods originated. Export customs duties are set by the Russian Federation as there is no unified list of export customs duties for the EEU.

Non-tariff restrictions

The member states are intending to unify the non-tariff regulation measures taken with regard to non-EEU countries. These include special protective, compensatory and anti-dumping measures, as well as sanitary and veterinary measures.

Some measures of non-tariff regulation may be introduced in the form of quantitative restrictions or as an exclusive right to export and/or import certain types of goods, which require a licence to be granted by the competent authorities of the member state.

The Eurasian Economic Commission is responsible for taking decisions on introducing, applying and cancelling measures of non-tariff regulation.

VAT

Goods exported to non-EEU countries from Russia are subject to a 0% VAT rate and are exempt from excise duties, provided that the export of goods is properly documented. The following documents must be submitted in order to claim the 0% VAT rate:

  • the contract for the exportation of goods;
  • a customs declaration stamped by the customs authorities confirming that the goods were exported out of Russia;
  • copies of transferring documentation (invoice, transfer and acceptance act, VAT invoice or “shchet-faktura”).

The above documents must be submitted to the tax authorities within 180 days after the export of the goods, failing which the taxpayer loses the right to apply the 0% VAT rate on exports and must apply the general VAT rate (10% or 20%).

Since 1 January 2018, companies selling goods for export can waive the right to apply the 0% VAT rate.

Further, starting from 2018, the opportunity to apply the 0% VAT rate has been introduced when selling imported goods for re-export when closing the customs procedure for processing on the customs territory of the EEU.

Recycling and environmental fees

The recycling fee must be paid for each wheeled or self-propelled vehicle imported into the Russian Federation. The procedures and amounts of the recycling fee are established under Government Decree No. 1291 dated 26 December 2013 and Government Decree No. 81 dated 6 February 2016. Certain categories of imported wheeled vehicles are exempt from the recycling fee, namely:

  • personal vehicles of refugees or persons under the programme of resettlement of fellow citizens;
  • vehicles of diplomatic and consular missions, international organisations; and
  • vehicles which were manufactured 30 or more years ago, which are not intended for commercial passenger and cargo carriage, or retro-vehicles.

Importers of goods that are subject to recycling once they have lost their consumption properties must pay an environmental fee (please see the Environmental fees relating to emissions, discharges and waste management section).

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[1] Customs transit may not last longer than a period determined in accordance with the following formula: 2,000km per month from the point of crossing of the EEU border. Back ↑


Key contacts

Safaryan Hayk
Hayk Safaryan
Partner
Head of Customs