Industry Insight

Green Customs Channel: Simple customs clearance in Russia thanks to digital signatures

An electronic flow of documents between the EU and EAEU

Foreign trade between Russia and the European Union is subject to numerous rules. One of the biggest challenges in customs clearance is that importers in most cases have to present original copies of their certificates of origin (COOs) to the Russian customs authorities. This process is normally delayed by the drawn-out process of issuing documents, frequent inspections of freight to compare the contents with the certificates and unreliable drivers. Can an automated solution using a digital signature speed up logistics procedures and still meet the legal requirements?

When goods are imported into Russia, the customs authorities there primarily have one goal. They want to ensure that the goods reach the territory of the Russian Federation with the same attributes as they had when they left the European Union – for example, their price, quantity and weight. Customs checks consist of two components: physical checks of the freight and the certificates of origin. The complexity of providing customs clearance for imports creates high costs, takes a great deal of time and sometimes leads to delays in deliveries.

The challenge: COO logistics is subject to Russian customs formalities

The main risks related to imports are associated with preparing the certificates: as original copies of the COOs have to be presented, the importer normally hands them over to the drivers. This poses a risk, particularly with unreliable drivers who may lose or destroy the document. Alternative methods of sending them can also be problematic as many Russian customs offices are located at remote places which do not have any direct link to courier services. It is often the case that the original document is not directly available because issuing it can take quite some time due to the various factors that need to be considered such as countries, shipments or chambers of commerce. During this time, the truck is at a standstill and this causes further costs. The additional freight inspections are also very complicated: the goods have to be unloaded, put into intermediate storage, weighed, photographed and then placed back on the vehicle.

Inspections cause delays in deliveries

Even if the document makes it to the destination, further delays can still occur. The customs inspector examines all the requirements such as the legibility and the authenticity of the signature and the stamp. He or she may reject the goods if the document contains spelling mistakes or the watermark has been damaged. If the COO is not provided on time, so-called compensatory anti-dumping payments are incurred in addition to the regular customs duties. It may be possible to reclaim these costs at a later date, but the refund can normally take up to 12 months. Once the goods finally arrive at the customer’s site, the company risks a complaint because it has failed to comply with the delivery date.

Electronic data exchange provides a remedy

The enormous time and financial expenditure related to COO logistics could be reduced by introducing digital customs clearance. A pilot project being organised by the German-Russian Chamber of Foreign Trade is called the Green Customs Channel. With the aim of having a cross-border electronic flow of documents, the current export declaration procedure used by European customs authorities is transferred to the Russian import customs procedure. However, there is a challenge here: the Eurasian Economic Union (EAEU) regulates the current legal basis for customs clearance in Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia. According to Decision No. 49, it accepts electronically issued certificates of origin, but only with certain restrictions. The Chamber of Commerce must give the responsible customs inspector access to the database. This enables him or her to ensure that the certificate was actually issued and whether it contains all the necessary information.

Best practice example: Digital signatures for fast exports

Some complications still occur with this method in practical situations. If the goods come from a different country than the exporting nation, this needs to be clearly visible on the COO and proven by an invoice or declaration from the country of origin. If this information exceeds the space that provided for writing in the document, complications may arise. It is then necessary to confirm that the remaining attachments are part of the same certificate. The Russian customs authorities do not automatically link any additional pages to the first electronic document.

Belgium provides a best practice example. The Chamber of Commerce there already provides a software tool with direct access via an online login. All the necessary documents such as invoices, packaging lists or original COOs can be easily uploaded to the portal. The company only has to have them digitally signed and can then use the documents for exports to Russia.

„Our ultimate goal is to provide all kinds of documents with a digital signature so that no papers are needed for customs clearance at all. As there is no direct agreement between the customs authorities in the EU and the Eurasian Economic Union, the Green Customs Channel offers a middle way of satisfying the legal requirements on both sides.“
Maria Kirsanova | Managing Director at Rhenus Russia

Green Customs Channel from A to Z

The basic idea behind the Green Customs Channel is to use a digital signature when sending COOs to the responsible customs authorities. This works in the following way in practice, based on the example of a Russian export: if a Russian company would like to export goods to the European Union, it first sends the export customs declaration to the Russian customs service. The customs service authorises the declaration and sends it back to the company. The declaration with the digital signature is then sent to a customs representative, e.g. a specialist logistics services provider. Its agency services are mandatory as the German and Russian customs authorities are not permitted to communicate with each other directly. After this, the declaration is forwarded to the third trustworthy party, the information integrator. This party checks the integrity and issues the acknowledgement of its assessment. The officially recognised customs representative in Europe transfers this export declaration together with the digital signature and acknowledgement to the European customs authorities. In the meantime, the truck travels from Russia to the border and the destination point, the customs clearance office. The moment the truck crosses the border from Belarus to Poland, the original customs terminal sends the data to the border customs point. The border customs point confirms that the truck has physically left the territory of the EAEU.

Conclusion: Paperless customs clearance offers benefits for both sides

Digitalised customs clearance accelerates the whole process. Steps involving a great deal of work and other delays caused by human errors related to COO logistics are then a thing of the past. The flow of documents takes place within the central system and, as a result, it is possible to make savings in terms of the costs for logistics and storage. The complete process is also paperless and more transparent: the customs authorities have immediate access to the information that they need. This enables faster trading practices, which in turn generates higher customs duty payments for the importing country. Both trading partners benefit from the advantages of a digital solution.

Would you like to discover more?

Both companies and importing and exporting countries benefit from digital customs clearance in the form of the Green Customs Channel. Read our checklist to discover the main benefits for users.

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You can find everything about the Rhenus Customs Terminal Smolensk here.

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