Prime Minister Dmitry Medvedev’s remarks:
Friends and colleagues, welcome to Moscow. I appreciate your invitation to speak at this forum which has brought together experts in international trade and customs.
Improving customs regulations remains a very important task for our country and, perhaps, for many other countries. It is particularly important for us, because we have a young, rapidly growing economy which is not without problems. The global economy is also leading us to improve our customs regulations. The growth in international trade, its complexity and the crises that have been plaguing the global economy since 2008 – all this doesn’t make the work of government institutions any easier.
Several things affect the situation in Russia, including the Customs Union, which we have created with our partners Kazakhstan and Belarus, our accession to the WTO, which is a separate issue altogether, and the creation of the CIS free trade area. All of this creates a specific set of tasks that need to be addressed.
Another global process that I would like to mention in my opening statement is the intensification of trade flows between Europe and Asia. According to experts, the volume of Eurasian trade today amounts to approximately $1 trillion a year. Russia is a vast country, but in spite of its unique geographical location it accounts for as little as 1% of this trade. Of course, this is very little and we can do much better. Clearly, effective customs administration is one of the most important prerequisites for a favourable investment climate, and we keep talking about this all the time. We would like to improve the business climate in Russia, and there’s been some progress already. I’m referring to the latest ratings, such as the popular Doing Business index. However, our successes are modest, and there’s nothing to brag about so far. I mention this because we have to focus on improving customs.
Just like any other problem, the customs problems in Russia are the other side of its merits, and we are all aware of them. We have recently discussed this at a meeting with foreign investors. Russian and foreign businessmen shared their concerns. These problems affect not only major companies and medium-sized businesses but ordinary citizens as well. This is understandable. I’m absolutely confident that maintaining an active dialogue with the business and the expert community and civil society is in our mutual interests.
This has to be a two-way street enhanced by transparency. That’s the order of the day. I demand the same from the Government, and I believe that this is an absolutely justified requirement with regard to the entire government system in any country, including Russia. Therefore, the current changes in customs should be as open and effective as possible.
Laws will be amended if needed. Obviously, laws are never perfect, because the law is a living organism, and, let’s face it, customs legislation has now become fairly complex because of the Customs Union and the fact that it has to respond to changes in the global economy and national economies as well. We need to go ahead and do it, if that’s what we have to do. In case of violations on the part of individual employees, we should take appropriate actions. In any case, this information should be openly available.
On a separate note, I would like to mention the work of the Community Advisory Council for the Customs Policy at the Federal Customs Service and 80 regional councils under the relevant customs entities: this is also an important area of work. It is important to maintain this approach in integration associations, and I’m referring primarily to the Customs Union and the Common Economic Space. For the business community, it’s a real opportunity to make proposals that may go into the applicable legislation in the three countries. In general, the Customs Union (for obvious reasons, I am directly involved in its creation) is, in my view, a very promising and complex entity. Customs officers in all three countries are aware of what I’m talking about, because the Russian customs service is now facing issues that were not typical of the Russian customs system previously, and perhaps it works the other way round as well. I’m saying this because all three states should be mindful of each other’s regulations and help each other. This is the only way for us to create an effective integration union which will benefit all our citizens. We are grateful to our Belarusian and Kazakh partners for their support and are ready to work together. Let me reiterate, this work will not be easy, but it's important.
It is also important to heed the advice of international experts, including the World Customs Organisation. It has a beautiful motto: Borders Divide, Customs Connects. This motto should underlie the work of our customs services as well. We face many problems, but as is known the best way to address a problem is to resolve it. Business proposals which were formulated as part of the national business initiatives and advisory board meetings on foreign investment formed the basis for the road map entitled “Improving Customs Administration”, which was adopted by the Government in June. I know that it wasn’t easy to get it approved, but I hope that balance was achieved among the interests of all the participants. Anyway, I’m proceeding from the assumption that this map is not dogma but a living document, and this is how it should be looked at. I also expect that, once implemented, these measures will significantly improve the situation in the customs.
There are obvious things that everybody is aware of, but I will mention them anyway. It is imperative that we make customs procedures simple and inexpensive through the use of modern technology. I’m referring to electronic customs declarations, remote clearance, preliminary notification and so on. You can see how these technologies work in real life and you can also see them displayed at the current show here. Much of what is being implemented is truly unique.
The problem is that all innovations are implemented mostly in big cities, such as Moscow and St Petersburg. I believe it has to be done across Russia from Anadyr to Kaliningrad. Those who are gaining experience in the use of these technologies today will be one step ahead of the others tomorrow, and as a result we (I mean Russia and our people) will gain a tangible competitive advantage.
New, almost fully automated management systems do all legal work without the direct involvement of customs officers. This is a good thing, but there will clearly be a need for people to run these systems. The only question is what they will do.
There is another issue, which I’d be remiss not to mention. It would seem that businesses should welcome all of these new developments. I often meet with business people, and they talk much about things they don’t like in customs and what they’d do if they ran the customs service, but of course, they never get around to do what they say they would do going about their business instead.
Let’s face it: not all businessmen are happy with customs – perhaps, partly, because the introduction of appropriate technology will make their relationship with the customs authorities extremely simple and absolutely transparent. It is no secret that individual customs officials are under the pressure of quasi-legitimate and sometimes even criminal businesses. To turn this situation around, the Government and law enforcement agencies and, of course, foreign trade actors should work together. You can’t just always blame the customs service and accuse them of being corrupt bureaucrats. The customs clearance process involves two sides. There must be a general attitude of intolerance to underhand dealings. Of course, this is easier said than done, but we should nevertheless move in that direction.
I would like to emphasise that the liberalisation and simplification of customs clearance administrative procedures must be balanced with effective customs control – no one has relieved the customs service of this duty. Other traditional areas of work, including generating budget revenues, remain relevant as well.
We have discussed this issue with Mr Belyaninov (Andrei Belyaninov, Head of the Federal Customs Service) on many occasions. What is the customs service all about? Is it an agency that collects money for the state, an oversight body or something else? What are its most important tasks? I think that this question has no simple answers.
Clearly, the customs service has a set of functions that will cause problems for quite a long time due to the current state of our economy and, pardon me for saying so, the level of legal knowledge of our people. Perhaps 20 years from now their tasks will change, if that. In any case, we need to address these issues and fight the smuggling of illegal drugs and weapons. There are other tasks as well: we are now fighting against counterfeit products and intellectual property theft. There was a conference on this subject yesterday. These are tasks that also face customs bodies today.
The issue of lines at border checkpoints, which bothers both the general public and businesses, should also be mentioned here. The law transferring to customs bodies the authority to perform transport and other oversight has been in effect for over a year. The time it takes to perform all procedures has been reduced by over 30%. This is a good statistic indeed, and this should be mentioned. Those who say nothing is changing are either mistaken or deliberately distorting the facts – all this despite a one-third increase in vehicles as compared to last year, which was the result of greater economic activity in certain sectors.
But we have to admit that the actual task is far from being resolved, even in part. This means we have to once again analyse the procedures performed at the border, and consider possibly relocating them to where customs clearance is completed, including domestic terminals. Of course, this should help ease customs procedures for citizens first and foremost. With regard to reducing the number of customs points, we have to consider the actual situation.
I have repeatedly given orders to both customs chief and other colleagues: we have to consider the actual situation and interests of all participants in the customs clearance procedure – that is, businessmen and carrier companies – and the opportunities for transport and logistic infrastructures in a certain regions. There is no one recipe for what can be closed and what cannot – but anyway, preliminary notification of all concerned organisations is required.
A couple of days ago, I signed a special government resolution which approves the regulations for establishing, reorganising and abolishing regional customs departments, offices and stations. The resolution provides that the decision on liquidating a customs office is taken following consultations with the business community and the region’s executive authorities, and enters into force no sooner than 90 days after the signing of the corresponding act.
There is yet another extremely important issue for Russia’s economy today. Companies which operate in the high-tech sector – and we have to pay particular attention to them – and which are focused on exporting goods with high added value must be provided with special opportunities and be given the go-ahead in this regard. This will make it possible to reduce the corresponding time and costs and will make domestic goods more competitive.
I could list all fields of activities, but I would like to speak to customs office workers to discuss internal problems and the social well-being of personnel and those involved in customs activities at customs bodies.
In conclusion, I would like to address all those present and say that our meeting is being held ahead of Customs Officer’s Day. Best wishes for the upcoming holiday to all staff members at central customs office and regional branches, as well as former customs workers. I wish you health, professional success and all the best. Thank you.