About customs representative
The customs representative is a professional mediator who, in the name and on behalf of the person who carries goods through the customs frontier, performs in his/her interests all necessary customs formalities.
Status of the customs representative is defined by the Customs Code of Eurasian Economic Community, and requirements to its activity are also established by national customs legislation of Russia. Only Russian legal entity entered in the corresponding national Register can have this status.
To be entered in the Register, an organization should meet a whole set of requirements: present to the public authorities the guarantee of payment of customs duties for the amount of EUR 1 million, insure its professional liability for the amount of RUR 20 million, and have necessary number of specialists in stuff qualified by passing the corresponding vocational examination.
Therefore, the public authorities set up rather high requirements for those who aspire to obtain the said status, with the purpose of non-admission of unfair and unprofessional agents, and raising the level of responsibility for violation of customs legislation. Presently 400 customs representatives or so exist in Russia, and their number reduces gradually, for some of them become unable to act effectively and professionally under complicated customs system conditions.
What for is the customs representative needed?
For a great number of various matters connected with conducting of foreign economic activity.
To plan a transaction
Necessity of its services arises long before the actual transportation of goods. Before the transaction connected with import or export of goods is completed, it is necessary to clear up a great number of different matters which are essential for defining economic feasibility of the transaction.
What are the import or export duties rates, are the goods subject to trade or administrative bans or limitations, if some permissive documents are required for import or export, terms and costs of drawing them up - these are only some of the questions to be answered during planning of a transaction. The customs representative is the one who must give these answers.
To perform the customs formalities as soon as possible
The customs declaration procedure is rather complicated presently, and it requires special expertise and skills, and, as the electronic declaration has been implemented, requires special equipment and access to the information networks of customs bodies.
Taking into account that maximal shortening of time of customs registration is the evident priority for participant of foreign economic activity, employment of customs representative from this point of view is a good solution, and it usually allows performing guaranteed customs registration of goods on the same day as they arrive at the customs post.
To avoid fines
In addition to technical problems solution, employment of the customs representative strikes another very important goal: placement of responsibility for reliability of declaration in respect of customs bodies on it, which allows avoiding risks of being called to administrative responsibility for violation of the corresponding requirements of the customs legislation of participant of foreign economic activity.
The importance of this fact can hardly be overestimated, for the said risks are rather high. The goods nomenclature system applied in Russia is very complicated, and declaration of unreliable information on the goods happens often. As the goods nomenclature defines the rates of applicable customs dues and taxes, such mistakes often result in considerable fines.
It is evident that the customs representative as the professional participant of customs legal relations has special expertise and experience of solving such problems and it is quite logical that responsibility for reliability of information presented to the customs is laid upon it by the law. Otherwise, if a participant of foreign economic activity declares the goods by himself, all such responsibility and all risks remain entirely on its behalf.
To avoid surcharge of customs dues
One should bear in mind that in compliance with the law, the customs representative bears joint and several responsibility with the declarant for payment of customs dues. It should be noted that the right of surcharge of the customs dues can be exercised by the customs within three years from the moment of their release, and such cases are quite often.
Usually it is connected with correction of the customs price of the goods after their release, or change of their nomenclature. According to the practice, such decisions sometimes are groundless, and finally reversed by courts or by superior customs bodies.
But such disputes are usually rather complicated, and they require special skills which the participant of foreign economic activity may lack. In case the goods have been declared by the customs representative, the latter by force of the joint and several responsibility for payment of the required amount faces the necessity to take all measures on its own to reverse the surcharge, and often succeeds, which at the same time eliminates the problem for participant of foreign economic activity.
In case the goods have been declared without participation of the customs representative, the participant of foreign economic activity has to face the problem under consideration all alone.
To avoid mistakes
Another important function of the customs representative is consultative support. The most frequent reason for delay in customs registration of goods is mistakes and inaccuracies in contractual and goods accompanying documentation.
Possibility to discuss necessary requirements to the documents with the broker in advance, and find with his/her help optimal solution for non-standard situations, allows avoiding such delays and therefore saving considerable funds which should have been paid for demurrages, to say nothing of the commercial risks of delayed supplies.
To be always well-informed
The customs legislation in Russia is complicated, and, which is more, it changes abruptly. It is difficult to keep an eye on all the changes constantly, and even more difficult to understand how this or that change affects your business.
Thanks to the customs representative, you may have all the necessary information referred to your business in operative manner, which allows saving time spent for studying the novels not relevant to your business and always be well-informed of all important issues.
To save time
Customs formalities are just the visible part of a bureaucratic iceberg; their performance often requires presentation of a considerable number of permissive documents, such as veterinary and phytosanitary certificates, certificates and declarations of conformity, certificates of the state registration, and so on.
Of course, you can draw them up on your own, but the customs representative will do it quicker. Besides, such documents sometimes contain errors and inaccuracies which impede release of the goods. Moreover, the customs bodies sometimes have their own view of how this or that document should be drawn up.
When you commission drawing up such documents to the customs representative, you save much time for their possible correction, and avoid delay during customs registration.
How much do the customs representative’s services cost?
Cost of the services is defined by an agreement with the represented person and depends on the market to a wide extent.
Usual cost of registration of a lot of homogeneous goods is RUR 10 000 or so, but of course this amount varies considerably depending on the nature of goods and volume of services provided by the customs representative. Besides, one should bear in mind that the customs representative’s fee doesn’t include payment for terminal handling at the point of arrival of goods, because such pay is collected by owners of temporary storage warehouses and port authorities.
Usually settlements with such organizations are performed through the customs representative who manages them. Cost of consultative services is usually RUR 2 500 per hour, but in regard to regular customers, necessary volume of such services is usually included in current pricing.