III КВАРТАЛ 2022Г. - 55 баллов
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[DETAIL_TEXT] => The Idea Is Good But Difficult to Realise
Implementation of e-declaration is an essential part of measures in the Federal target programme, “Electronic Russia (2002-2010)”, realisation of which enables the formation of the necessary prerequisites to bring IT application on a new qualitative level. It envisages putting into operation transfer of e-documents between the federal executive bodies and business entities, including where customs documentation is provided. “Electronic Russia” envisages a transfer to e-documents and use of an e-signature mechanism.
In its Decree № 222-p from 24.05.2005, the RF Federal Customs Service set the order of customs offices becoming equipped with facilities to use e-form declaration. The document sets out how to handle a declaration and regulates the process of interaction between interested organisations. The new system enables the reduction of inspection time to half an hour. However, customs brokers and importers claim that procedures already implemented are imperfect and create some problems.
The mechanism of the e-declaration programme is as follows: a party in foreign -economic activity sends his declaration, including format and control details, to a customs office. The office then informs the party that they have received the declaration. According to the agreed rules, when an inspector of the customs office receives e-declaration, he has to handle it as a priority task.
Initially, it is envisaged that an e-declaration will be accompanied by the paper document. Later on, the paper document will remain with a customs broker, and may be produced on demand in exceptional cases (for example, if a customs inspector doubts the authenticity of the documents given to him). An e-archive is to be created. It will contain all the declarations filed before.
The first participants in the project, launched several years ago, were broker companies and importers operating on long-term contracts and transporting goods that were easy to classify. Customs specialists taught two or three employees from every customs office to work with e-declarations. Later, they taught their colleagues. It is worth mentioning that nowadays e-declaration is not used for excisable goods.
More Drawbacks Than Advantages
The system has both drawbacks and advantages. The positive feature of e-declaration is the reduction of time for receiving, checking and giving the declaration back. Also, the customs applicant does not need to come to the customs office to file a freight customs declaration. The procedure provides an opportunity to send all the documents necessary for customs clearance by means of digital communication from the office. It is also significant that e-documents are checked earlier than paper ones.
In the opinion of customs officers, e-declaration makes the process of customs clearance more transparent, formalises the contact with a customs inspector and, consequently, minimises the influence of the human factor at customs operations. As a result, the level of service provided to foreign parties improves significantly, foreign trade becomes more active and the customs payments to the state federal budget grow.
Thus, when such e-system is put into operation, the time taken to register documents at customs will fall from several hours to 25-30 minutes. “In September 2004, IKEA company implemented the system of goods e-declaration: e-documents were created and delivered to customs in several minutes and there was hardly any personal contact with customs bodies. During the first year when the system was in use, the share of e-declarations amounted to 90% of the total volume. In 2005 IKEA, together with the Federal Customs Service, established a training centre where the employees in the temporary storage warehouse shared their experience of e-declaration use with other participants in the business and customs representatives”, said Julia Hertel, Head of the IKEA Customs Department in Russia.
Not Everyone Can Afford It
According to the forecasts of the programme developers, the customs office was to transfer to e-declaration by 2008. However, by November 2007, only 70% of customs offices had been equipped properly, and had enough technical facilities to use e-declaration. Thus, it is doubtful that in 2008 all the freight delivered to Russia will be serviced quickly.
And there are other reasons why the online systems for cargo registration will not be implemented soon. Even some departments of the Federal Customs Service are not prepared to transfer entirely to e-documents registration. In the words of the representatives of the Legislative Administration of the Federal Customs Service, the officials are ready to use it, but there are some legislative obstacles. “In the country there is no law on electronic-digital signature Consequently, we are to use usual paper documents, signed and sealed,” added representatives of the Federal Customs Service. When a proper normative and legislative base appears, the problem will be solved and customs will treat e-documents as well as paper ones. The problem is that e-signature standards and rules of usage are different in other countries.
As a result, only large importers use the modern methods of declaring, those who have direct contracts with foreign producers, as well as European companies, such as IKEA, which use a definite scheme of work in all the states where they operate. “With large volumes of supplied goods of different types and an extensive list of consignors, goods supplies are planned and managed so that order placement and confirmation, shipment, reception and sale are made by IKEA’s different business systems. Documents for customs clearance are created automatically, on the basis of the data from the systems. Such a scheme for information processing and use allows the registration of a larger amount of supplies with minimal staff,” says J. Hertel.
Much Has Been Done, Although Less Than Is Needed
Market participants note that work on the implemented part of e-processing of customs declarations is far from perfect. Considering e-declaration is a process that allows the transfer to paperless customs clearance, it has to be said that it cannot be fully realised at the moment. For freight customs declarations, a certain documents must be filed with customs. For example, to control fulfillment of measures for non-tariff regulation (licences and certificates), customs cost, and to follow currency legislation, etc. The e-form is not envisaged for the documents. As a result, the positive effect from new technologies application disappears.
“A customs officer gets the e-version of the customs declaration. But there are accompanying forms, the bill and the invoice, which are delivered to the customs office as paper documents, and they must be scanned. And there is just such a pack of documents not for every container, but for every cargo inside it. As a result, to register a container filled with 100 different products that have different customs codes, an importer has to scan 100 packs of documents for every cargo. This slows down the whole process”, explains Denis Zalevsky, Head of the Business-Development Department of STS Logistics.
Representatives of logistics and transport companies believe it is necessary to fulfil three terms to make the system efficient. Firstly, the e-form of all the documents must be coordinated with all the participants in the process. Secondly, communication networks must be created so that customs have access to all the documents. Finally - and most importantly – the online e-document databases must contain information about the departments responsible for the documents.
Today, only customs bodies do it, and they are ready to organise information exchanges with other organisations. For the foreign business partners who want to go for e-declaring (without accredited customs brokers) there are some obstacles, especially significant financial costs. The total cost of using e-declaring is about RUR 250,000.
Resume
Meanwhile, sectoral experts hope that, under the framework of the “Electronic Russia” programme, all the problems will be solved and e-declaration really will become paperless. Foreign business partners feel that “the work of the customs service must be reformed, in particular, declaration registration and document turnover must be simplified” believes Partner Logistic company. While a pack of documents for each of 5,000 cargoes transported by a lorry is needed, vehicles will continue to idle in queues on the border for days and days.
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Implementation of e-declaration is an essential part of measures in the Federal target programme, “Electronic Russia (2002-2010)”, realisation of which enables the formation of the necessary prerequisites to bring IT application on a new qualitative level. It envisages putting into operation transfer of e-documents between the federal executive bodies and business entities, including where customs documentation is provided. “Electronic Russia” envisages a transfer to e-documents and use of an e-signature mechanism.
In its Decree № 222-p from 24.05.2005, the RF Federal Customs Service set the order of customs offices becoming equipped with facilities to use e-form declaration. The document sets out how to handle a declaration and regulates the process of interaction between interested organisations. The new system enables the reduction of inspection time to half an hour. However, customs brokers and importers claim that procedures already implemented are imperfect and create some problems.
The mechanism of the e-declaration programme is as follows: a party in foreign -economic activity sends his declaration, including format and control details, to a customs office. The office then informs the party that they have received the declaration. According to the agreed rules, when an inspector of the customs office receives e-declaration, he has to handle it as a priority task.
Initially, it is envisaged that an e-declaration will be accompanied by the paper document. Later on, the paper document will remain with a customs broker, and may be produced on demand in exceptional cases (for example, if a customs inspector doubts the authenticity of the documents given to him). An e-archive is to be created. It will contain all the declarations filed before.
The first participants in the project, launched several years ago, were broker companies and importers operating on long-term contracts and transporting goods that were easy to classify. Customs specialists taught two or three employees from every customs office to work with e-declarations. Later, they taught their colleagues. It is worth mentioning that nowadays e-declaration is not used for excisable goods.
More Drawbacks Than Advantages
The system has both drawbacks and advantages. The positive feature of e-declaration is the reduction of time for receiving, checking and giving the declaration back. Also, the customs applicant does not need to come to the customs office to file a freight customs declaration. The procedure provides an opportunity to send all the documents necessary for customs clearance by means of digital communication from the office. It is also significant that e-documents are checked earlier than paper ones.
In the opinion of customs officers, e-declaration makes the process of customs clearance more transparent, formalises the contact with a customs inspector and, consequently, minimises the influence of the human factor at customs operations. As a result, the level of service provided to foreign parties improves significantly, foreign trade becomes more active and the customs payments to the state federal budget grow.
Thus, when such e-system is put into operation, the time taken to register documents at customs will fall from several hours to 25-30 minutes. “In September 2004, IKEA company implemented the system of goods e-declaration: e-documents were created and delivered to customs in several minutes and there was hardly any personal contact with customs bodies. During the first year when the system was in use, the share of e-declarations amounted to 90% of the total volume. In 2005 IKEA, together with the Federal Customs Service, established a training centre where the employees in the temporary storage warehouse shared their experience of e-declaration use with other participants in the business and customs representatives”, said Julia Hertel, Head of the IKEA Customs Department in Russia.
Not Everyone Can Afford It
According to the forecasts of the programme developers, the customs office was to transfer to e-declaration by 2008. However, by November 2007, only 70% of customs offices had been equipped properly, and had enough technical facilities to use e-declaration. Thus, it is doubtful that in 2008 all the freight delivered to Russia will be serviced quickly.
And there are other reasons why the online systems for cargo registration will not be implemented soon. Even some departments of the Federal Customs Service are not prepared to transfer entirely to e-documents registration. In the words of the representatives of the Legislative Administration of the Federal Customs Service, the officials are ready to use it, but there are some legislative obstacles. “In the country there is no law on electronic-digital signature Consequently, we are to use usual paper documents, signed and sealed,” added representatives of the Federal Customs Service. When a proper normative and legislative base appears, the problem will be solved and customs will treat e-documents as well as paper ones. The problem is that e-signature standards and rules of usage are different in other countries.
As a result, only large importers use the modern methods of declaring, those who have direct contracts with foreign producers, as well as European companies, such as IKEA, which use a definite scheme of work in all the states where they operate. “With large volumes of supplied goods of different types and an extensive list of consignors, goods supplies are planned and managed so that order placement and confirmation, shipment, reception and sale are made by IKEA’s different business systems. Documents for customs clearance are created automatically, on the basis of the data from the systems. Such a scheme for information processing and use allows the registration of a larger amount of supplies with minimal staff,” says J. Hertel.
Much Has Been Done, Although Less Than Is Needed
Market participants note that work on the implemented part of e-processing of customs declarations is far from perfect. Considering e-declaration is a process that allows the transfer to paperless customs clearance, it has to be said that it cannot be fully realised at the moment. For freight customs declarations, a certain documents must be filed with customs. For example, to control fulfillment of measures for non-tariff regulation (licences and certificates), customs cost, and to follow currency legislation, etc. The e-form is not envisaged for the documents. As a result, the positive effect from new technologies application disappears.
“A customs officer gets the e-version of the customs declaration. But there are accompanying forms, the bill and the invoice, which are delivered to the customs office as paper documents, and they must be scanned. And there is just such a pack of documents not for every container, but for every cargo inside it. As a result, to register a container filled with 100 different products that have different customs codes, an importer has to scan 100 packs of documents for every cargo. This slows down the whole process”, explains Denis Zalevsky, Head of the Business-Development Department of STS Logistics.
Representatives of logistics and transport companies believe it is necessary to fulfil three terms to make the system efficient. Firstly, the e-form of all the documents must be coordinated with all the participants in the process. Secondly, communication networks must be created so that customs have access to all the documents. Finally - and most importantly – the online e-document databases must contain information about the departments responsible for the documents.
Today, only customs bodies do it, and they are ready to organise information exchanges with other organisations. For the foreign business partners who want to go for e-declaring (without accredited customs brokers) there are some obstacles, especially significant financial costs. The total cost of using e-declaring is about RUR 250,000.
Resume
Meanwhile, sectoral experts hope that, under the framework of the “Electronic Russia” programme, all the problems will be solved and e-declaration really will become paperless. Foreign business partners feel that “the work of the customs service must be reformed, in particular, declaration registration and document turnover must be simplified” believes Partner Logistic company. While a pack of documents for each of 5,000 cargoes transported by a lorry is needed, vehicles will continue to idle in queues on the border for days and days.
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Implementation of e-declaration is an essential part of measures in the Federal target programme, “Electronic Russia (2002-2010)”, realisation of which enables the formation of the necessary prerequisites to bring IT application on a new qualitative level. It envisages putting into operation transfer of e-documents between the federal executive bodies and business entities, including where customs documentation is provided. “Electronic Russia” envisages a transfer to e-documents and use of an e-signature mechanism.
In its Decree № 222-p from 24.05.2005, the RF Federal Customs Service set the order of customs offices becoming equipped with facilities to use e-form declaration. The document sets out how to handle a declaration and regulates the process of interaction between interested organisations. The new system enables the reduction of inspection time to half an hour. However, customs brokers and importers claim that procedures already implemented are imperfect and create some problems.
The mechanism of the e-declaration programme is as follows: a party in foreign -economic activity sends his declaration, including format and control details, to a customs office. The office then informs the party that they have received the declaration. According to the agreed rules, when an inspector of the customs office receives e-declaration, he has to handle it as a priority task.
Initially, it is envisaged that an e-declaration will be accompanied by the paper document. Later on, the paper document will remain with a customs broker, and may be produced on demand in exceptional cases (for example, if a customs inspector doubts the authenticity of the documents given to him). An e-archive is to be created. It will contain all the declarations filed before.
The first participants in the project, launched several years ago, were broker companies and importers operating on long-term contracts and transporting goods that were easy to classify. Customs specialists taught two or three employees from every customs office to work with e-declarations. Later, they taught their colleagues. It is worth mentioning that nowadays e-declaration is not used for excisable goods.
More Drawbacks Than Advantages
The system has both drawbacks and advantages. The positive feature of e-declaration is the reduction of time for receiving, checking and giving the declaration back. Also, the customs applicant does not need to come to the customs office to file a freight customs declaration. The procedure provides an opportunity to send all the documents necessary for customs clearance by means of digital communication from the office. It is also significant that e-documents are checked earlier than paper ones.
In the opinion of customs officers, e-declaration makes the process of customs clearance more transparent, formalises the contact with a customs inspector and, consequently, minimises the influence of the human factor at customs operations. As a result, the level of service provided to foreign parties improves significantly, foreign trade becomes more active and the customs payments to the state federal budget grow.
Thus, when such e-system is put into operation, the time taken to register documents at customs will fall from several hours to 25-30 minutes. “In September 2004, IKEA company implemented the system of goods e-declaration: e-documents were created and delivered to customs in several minutes and there was hardly any personal contact with customs bodies. During the first year when the system was in use, the share of e-declarations amounted to 90% of the total volume. In 2005 IKEA, together with the Federal Customs Service, established a training centre where the employees in the temporary storage warehouse shared their experience of e-declaration use with other participants in the business and customs representatives”, said Julia Hertel, Head of the IKEA Customs Department in Russia.
Not Everyone Can Afford It
According to the forecasts of the programme developers, the customs office was to transfer to e-declaration by 2008. However, by November 2007, only 70% of customs offices had been equipped properly, and had enough technical facilities to use e-declaration. Thus, it is doubtful that in 2008 all the freight delivered to Russia will be serviced quickly.
And there are other reasons why the online systems for cargo registration will not be implemented soon. Even some departments of the Federal Customs Service are not prepared to transfer entirely to e-documents registration. In the words of the representatives of the Legislative Administration of the Federal Customs Service, the officials are ready to use it, but there are some legislative obstacles. “In the country there is no law on electronic-digital signature Consequently, we are to use usual paper documents, signed and sealed,” added representatives of the Federal Customs Service. When a proper normative and legislative base appears, the problem will be solved and customs will treat e-documents as well as paper ones. The problem is that e-signature standards and rules of usage are different in other countries.
As a result, only large importers use the modern methods of declaring, those who have direct contracts with foreign producers, as well as European companies, such as IKEA, which use a definite scheme of work in all the states where they operate. “With large volumes of supplied goods of different types and an extensive list of consignors, goods supplies are planned and managed so that order placement and confirmation, shipment, reception and sale are made by IKEA’s different business systems. Documents for customs clearance are created automatically, on the basis of the data from the systems. Such a scheme for information processing and use allows the registration of a larger amount of supplies with minimal staff,” says J. Hertel.
Much Has Been Done, Although Less Than Is Needed
Market participants note that work on the implemented part of e-processing of customs declarations is far from perfect. Considering e-declaration is a process that allows the transfer to paperless customs clearance, it has to be said that it cannot be fully realised at the moment. For freight customs declarations, a certain documents must be filed with customs. For example, to control fulfillment of measures for non-tariff regulation (licences and certificates), customs cost, and to follow currency legislation, etc. The e-form is not envisaged for the documents. As a result, the positive effect from new technologies application disappears.
“A customs officer gets the e-version of the customs declaration. But there are accompanying forms, the bill and the invoice, which are delivered to the customs office as paper documents, and they must be scanned. And there is just such a pack of documents not for every container, but for every cargo inside it. As a result, to register a container filled with 100 different products that have different customs codes, an importer has to scan 100 packs of documents for every cargo. This slows down the whole process”, explains Denis Zalevsky, Head of the Business-Development Department of STS Logistics.
Representatives of logistics and transport companies believe it is necessary to fulfil three terms to make the system efficient. Firstly, the e-form of all the documents must be coordinated with all the participants in the process. Secondly, communication networks must be created so that customs have access to all the documents. Finally - and most importantly – the online e-document databases must contain information about the departments responsible for the documents.
Today, only customs bodies do it, and they are ready to organise information exchanges with other organisations. For the foreign business partners who want to go for e-declaring (without accredited customs brokers) there are some obstacles, especially significant financial costs. The total cost of using e-declaring is about RUR 250,000.
Resume
Meanwhile, sectoral experts hope that, under the framework of the “Electronic Russia” programme, all the problems will be solved and e-declaration really will become paperless. Foreign business partners feel that “the work of the customs service must be reformed, in particular, declaration registration and document turnover must be simplified” believes Partner Logistic company. While a pack of documents for each of 5,000 cargoes transported by a lorry is needed, vehicles will continue to idle in queues on the border for days and days.
[~DETAIL_TEXT] => The Idea Is Good But Difficult to Realise
Implementation of e-declaration is an essential part of measures in the Federal target programme, “Electronic Russia (2002-2010)”, realisation of which enables the formation of the necessary prerequisites to bring IT application on a new qualitative level. It envisages putting into operation transfer of e-documents between the federal executive bodies and business entities, including where customs documentation is provided. “Electronic Russia” envisages a transfer to e-documents and use of an e-signature mechanism.
In its Decree № 222-p from 24.05.2005, the RF Federal Customs Service set the order of customs offices becoming equipped with facilities to use e-form declaration. The document sets out how to handle a declaration and regulates the process of interaction between interested organisations. The new system enables the reduction of inspection time to half an hour. However, customs brokers and importers claim that procedures already implemented are imperfect and create some problems.
The mechanism of the e-declaration programme is as follows: a party in foreign -economic activity sends his declaration, including format and control details, to a customs office. The office then informs the party that they have received the declaration. According to the agreed rules, when an inspector of the customs office receives e-declaration, he has to handle it as a priority task.
Initially, it is envisaged that an e-declaration will be accompanied by the paper document. Later on, the paper document will remain with a customs broker, and may be produced on demand in exceptional cases (for example, if a customs inspector doubts the authenticity of the documents given to him). An e-archive is to be created. It will contain all the declarations filed before.
The first participants in the project, launched several years ago, were broker companies and importers operating on long-term contracts and transporting goods that were easy to classify. Customs specialists taught two or three employees from every customs office to work with e-declarations. Later, they taught their colleagues. It is worth mentioning that nowadays e-declaration is not used for excisable goods.
More Drawbacks Than Advantages
The system has both drawbacks and advantages. The positive feature of e-declaration is the reduction of time for receiving, checking and giving the declaration back. Also, the customs applicant does not need to come to the customs office to file a freight customs declaration. The procedure provides an opportunity to send all the documents necessary for customs clearance by means of digital communication from the office. It is also significant that e-documents are checked earlier than paper ones.
In the opinion of customs officers, e-declaration makes the process of customs clearance more transparent, formalises the contact with a customs inspector and, consequently, minimises the influence of the human factor at customs operations. As a result, the level of service provided to foreign parties improves significantly, foreign trade becomes more active and the customs payments to the state federal budget grow.
Thus, when such e-system is put into operation, the time taken to register documents at customs will fall from several hours to 25-30 minutes. “In September 2004, IKEA company implemented the system of goods e-declaration: e-documents were created and delivered to customs in several minutes and there was hardly any personal contact with customs bodies. During the first year when the system was in use, the share of e-declarations amounted to 90% of the total volume. In 2005 IKEA, together with the Federal Customs Service, established a training centre where the employees in the temporary storage warehouse shared their experience of e-declaration use with other participants in the business and customs representatives”, said Julia Hertel, Head of the IKEA Customs Department in Russia.
Not Everyone Can Afford It
According to the forecasts of the programme developers, the customs office was to transfer to e-declaration by 2008. However, by November 2007, only 70% of customs offices had been equipped properly, and had enough technical facilities to use e-declaration. Thus, it is doubtful that in 2008 all the freight delivered to Russia will be serviced quickly.
And there are other reasons why the online systems for cargo registration will not be implemented soon. Even some departments of the Federal Customs Service are not prepared to transfer entirely to e-documents registration. In the words of the representatives of the Legislative Administration of the Federal Customs Service, the officials are ready to use it, but there are some legislative obstacles. “In the country there is no law on electronic-digital signature Consequently, we are to use usual paper documents, signed and sealed,” added representatives of the Federal Customs Service. When a proper normative and legislative base appears, the problem will be solved and customs will treat e-documents as well as paper ones. The problem is that e-signature standards and rules of usage are different in other countries.
As a result, only large importers use the modern methods of declaring, those who have direct contracts with foreign producers, as well as European companies, such as IKEA, which use a definite scheme of work in all the states where they operate. “With large volumes of supplied goods of different types and an extensive list of consignors, goods supplies are planned and managed so that order placement and confirmation, shipment, reception and sale are made by IKEA’s different business systems. Documents for customs clearance are created automatically, on the basis of the data from the systems. Such a scheme for information processing and use allows the registration of a larger amount of supplies with minimal staff,” says J. Hertel.
Much Has Been Done, Although Less Than Is Needed
Market participants note that work on the implemented part of e-processing of customs declarations is far from perfect. Considering e-declaration is a process that allows the transfer to paperless customs clearance, it has to be said that it cannot be fully realised at the moment. For freight customs declarations, a certain documents must be filed with customs. For example, to control fulfillment of measures for non-tariff regulation (licences and certificates), customs cost, and to follow currency legislation, etc. The e-form is not envisaged for the documents. As a result, the positive effect from new technologies application disappears.
“A customs officer gets the e-version of the customs declaration. But there are accompanying forms, the bill and the invoice, which are delivered to the customs office as paper documents, and they must be scanned. And there is just such a pack of documents not for every container, but for every cargo inside it. As a result, to register a container filled with 100 different products that have different customs codes, an importer has to scan 100 packs of documents for every cargo. This slows down the whole process”, explains Denis Zalevsky, Head of the Business-Development Department of STS Logistics.
Representatives of logistics and transport companies believe it is necessary to fulfil three terms to make the system efficient. Firstly, the e-form of all the documents must be coordinated with all the participants in the process. Secondly, communication networks must be created so that customs have access to all the documents. Finally - and most importantly – the online e-document databases must contain information about the departments responsible for the documents.
Today, only customs bodies do it, and they are ready to organise information exchanges with other organisations. For the foreign business partners who want to go for e-declaring (without accredited customs brokers) there are some obstacles, especially significant financial costs. The total cost of using e-declaring is about RUR 250,000.
Resume
Meanwhile, sectoral experts hope that, under the framework of the “Electronic Russia” programme, all the problems will be solved and e-declaration really will become paperless. Foreign business partners feel that “the work of the customs service must be reformed, in particular, declaration registration and document turnover must be simplified” believes Partner Logistic company. While a pack of documents for each of 5,000 cargoes transported by a lorry is needed, vehicles will continue to idle in queues on the border for days and days.
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Participants in foreign economic activity consider that the main problems with Russian customs are turnover of paper documents and unreasonably long searches. Customs officers are ready to provide customs formalities through e-documents and hold examination by means of special electronic complexes, which will speed up the process significantly. Leonid Shornikov, Deputy Head of the RF Federal Customs Service (FTS), told The RZD-Partner International about the innovations implemented at the RF border crossings.Array
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[DETAIL_TEXT] => E-Declaration Will Become a Usual Thing
– Mr Shornikov, what are the most significant changes that influenced the work of the FTS in 2007?
– The most important factor of development was mass usage of inspection and screening complexes (ISC) to search oversized cargoes and vehicles. Equipment of border crossings with stationary and mobile ISCs creates the conditions to improve foreign economic activity by providing a continuous flow of goods and vehicles via the state border, to reduce delivery time and the cost of foreign partners’ expenditure on transport services. The second important aspect of increasing the efficiency of customs bodies was implementation of e-declaration. Today the offices included in the list of customs bodies are properly equipped to use e-declaration (later – the list).
In accordance with the realisation of the Concept of Customs Service Development, the RF FTS is increasing the amount of customs offices where e-declaration can be used. On October 1, 2007, 195 customs offices were in the list as the ones equipped well enough to use e-declaration. For the sake of comparison, at the end of 2006 there were only 161 offices.
To improve the e-form of declaration, the technology of giving e-data to customs bodies via the Internet is being put into operation. Today, measures are being taken to test such information technology at some customs offices subordinated to the Central Customs, the Southern Customs, and the North-Western Customs.
The new system of e-data supply differs from the technology that is in use now. Firstly, e-documents are prepared by the customs applicant, who uses his own information system. For example, at the Kashira office, it is the elaboration of the broker himself. Secondly, open communication channels are used to transfer the declaration and documents. Information security is provided by special hardware and software. Thus, the process of e-declaration becomes much cheaper.
Thirdly, documents are received, processed and scanned by means of established software. Once the technology is tested, e-declaration via Internet may become an established technical solution. It will be a large step forward on the qualitative level for all the technologies concerning providing e-data to customs bodies.
“A Single Information System Is Required”
– What are the drawbacks and problems caused by technical modernisation of the customs and transfer to a new technological level, in your opinion?
– When receiving and producing customs e-declarations, customs bodies have to print them out in almost every case. But it is not because of customs legislation, it is because a declarant must give a report to tax authorities and banks. And transporters are in the same situation. For example, Russian Railways are putting into operation an e-form of the railway bill, but they must have our real, non-virtual seals on paper copies of the documents. These problems are well-known and discussed at almost every level. Obviously, if all the interested bodies develop their own IT systems, we will hardly be able to transfer to e-document turnover without a unified programme. Then we will have to continue our extensive development course.
Nowadays, in accordance with the orders of the RF President and the Government, and the decisions of the State Border Committee, measures are being taken to integrate the IT resources of ministries and departments into the framework of the state programme “Electronic Russia”. They envisage also the development of a single database for resolving documents as well as an integrated information system at the RF border crossings.
- The new form for freight declaration causes a lot of discussions among foreign business partners. What is being done in the sector?
– The new form for freight customs declaration/transit declaration was put into operation on January 1, 2007. Since that day, a document unified with the single administrative document (SAD) of the European Union member-states, as well as new classifiers, has been used in Russia.
Unification of the requirements for filling in the freight customs declaration and transit declaration with the SAD requirements allows us to put the question about the Russian Federation joining the Convention on Simplifying Formalities in the Goods Trade Sector. Joining the Convention is also a term of Russia joining the Convention on the Common Transit Procedure, which has already been signed by 31 European states.
Considering the results of the year, normative and legislative acts used since January 1, 2007, were reissued. Since January 1, 2008, Order № 1057 “On Adopting the Instruction on the Order of Filling In Freight Customs Declaration And Transit Declaration” from 04.09.2007 of the RF FTS came into force, as well as Order № 1003 “On Classifiers and Lists of Normative And Reference Information Used for Customs’ Targets” from 21.08.2007 of the Russian Federal Customs Service.
20 Minutes to Register Cargo
– What else is being done by customs to simplify document registration and solve the problem of traffic jams at the border?
– In accordance with the message of the RF President, in terms of the Russia-EU Subcommittee for Customs and Transborder Cooperation, principle agreements have been reached to carry out a coordinated approach to solve the problem of long cargo registration at check-points on the border of Russia and the EU member-states.
At its meeting, the Subcommittee defined three priority directions of cooperation between customs bodies of Russia and the European Union to provide trade and reduce the time of border crossing significantly.
The first of them is measures to solve the problem of vehicle queues on the border between Russia and the EU member-states and support given to trade. In particular, they include legislative and administrative measures taken by Russia, which can fast and effectively tackle the traffic jams on the border.
The second priority direction of cooperation is organisation of the automated exchange of preliminary customs information.
The third direction is creation and improving of the infrastructure at border crossings.
Cargo flow volumes between different countries are increasing due to globalisation of the world economy and the geographical position of Russia means the shortest transport routes between Europe and Asia must cross its territory.
The reduction of time spent on customs formalities at border crossings and prevention of traffic jams on the border are necessary to provide favourable conditions for foreign economic activity and because of the prospect of Russia joining the WTO.
In 2007, the RF Federal Customs Service decreed that the procedure of customs formalities at road border crossings must not exceed 20 minutes, and the share of a consignment of goods to be searched at the border is 8%.
Large-sized goods and transport modes (airplanes and vessels, railway containers, trucks, refrigerators) are the most difficult objects for customs to inspect. It is necessary to fulfil a number of labour-intensive and lengthy unloading and loading work, and special space is required. Thus, only sampling single objects for examination is possible. For the same reasons vehicles and their construction junctions, that can be used as a cache, are searched selectively.
Since these objects can be used for organised contraband, customs services strive to use special equipment to find it. The most efficient customs control instruments to examine large-size cargoes and vehicles are inspecting and screening complexes. These technical facilities use ionising emission to take X-ray image of large-size cargoes and transport modes to fulfil customs control.
Customs control using inspecting and screening complexes is a non-damaging type of control, and it allows to check whether the carried goods are similar to the ones mentioned in the documents and solves other problems faced by the customs bodies when checking large-sized cargoes and other transport modes. To carry out the Federal target programme “State Border of the Russian Federation (2003-2010)”, the RF FTS is taking measures to provide border crossings with inspecting and screening complexes. Thus, since August 2007, 40 mobile inspecting and screening complexes have been supplied to all regional customs. In 2008 it is planned to purchase five more such complexes.
– What is the situation with putting simplified customs procedures into operation?
– The FTS of Russia set special simplified procedures for customs formalities in accordance with Article 68 of the RF Customs Code and with the order for such procedures in customs registration for definite persons envisaged by the Order of the Ministry of Economic Development and Trade in 2005.
Special simplified customs formalities may be set for persons who import goods on the customs territory of the Russian Federation and fulfil the following requirements of the Code:
a) persons must have neither unfulfilled determinations on a case about administrative offences in the customs sector nor be considered administratively punished for committing administrative violations when he applies to the customs for special simplified procedures;
b) persons are to hold a system to keep records of their commercial documentation in accordance with the Order, allowing the customs bodies to compare the data in it and information given to customs bodies to provide customs formalities;
c) persons involved in foreign economic activities for not less than three years.
To set the special simplified customs formalities, the applicant is to appeal either to regional customs or to the Federal Customs Service with a written application pledging to keep records of his commercial documentation in accordance with the requirements envisaged by the Order and agreeing to provide customs officers in charge with access to the record-keeping system.
In three quarters of 2007, the number of people who applied for special simplified customs formalities was 240, including large production enterprises, organisations specialising in road construction, importers bringing in goods for their own needs as well as to sell them on the Russian market.
The FTS Is Open for Dialogue with Business
– How do customs services interact with businessmen? Are there positive examples of joint agreements?
– Last year we continued to develop and enlarge the cooperation between the RF Federal Customs Service and Russian and foreign businessmen. The authorities of the FTS are attentive to the problems of foreign business partners in the customs sector and do their best to solve them as fast as possible to reach a consensus between both sides.
Respectively, the course announced by the RF FTS to develop partner relations on the vector “business-customs-business” was followed in the reporting year. In particular, in 2007 the Public-Consulting Council for Customs Policy was formed at the FTS of Russia. There are 35 representatives of Russian business in it. For the sake of comparison, in the former Consulting Council, businesses were represented by only 21 foreign economic partners. In the current Council there are also three members of the Public Chamber of the Russian Federation. Two meetings of the Council have been held so far. The Plan of work of the Council in 2008 is being formed in accordance with the wishes of businesses and the opinions of the FTS departments.
Among traditional foreign partners of the FTS of Russia there are the Union of German Economy, Association of European Business, and the American Trade Chamber. One of the new active partners is the Japanese External Trade Organization (JETRO). Authorities and experts of the RF Federal Customs Service regularly consult the leaders of the organisations and pay much attention to the problems their foreign partners face.
A new activity of the FTS in its interaction with the foreign participants is the research of the opinion of businessmen about the work of customs bodies.
Besides, to develop and improve interaction with the transport sector, a Memorandum of Understanding was concluded by the Federal Customs Service and OAO RZD last year. The document sets the basic directions of interaction and cooperation development. Joint elaboration and realisation of programmes and projects for customs and railway infrastructure development are envisaged. Moreover, technological schemes and technical conditions of the sides’ interaction on international cargo and passenger railway transportation are to be carried out. E-document turnover, passenger and luggage control during travel, preliminary on-line informing of customs bodies about the goods and transport facilities carried via the RF border by railway transport will be provided during passenger transportation.
– What are the benefits of the launch of the Customs Union between Byelorussia, Kazakhstan and Russia?
– The RF Federal Customs Service takes an active role in formation of the legislative base of the Customs Union between the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation. Experts of EurAsEC (The Eurasian Economic Community) member-states also participate in the activities of working groups. Creation of the organisation is targeted at formation of a single economic and customs space. If the customs control is transferred to the external border of the Customs Union, there will be conditions for through transportation of goods on the territory of the Customs Union’s member-countries in the mutual trade mode. These measures will give us a new impulse to unify legislation concerning customs, tariff and non-tariff regulation, taxation of the Union member-states, and to use 100% of the transport infrastructure of the countries and develop transport systems taking into account the interests of Russia. A prospective segment of cooperation is interaction in the IT sector. A single data-exchange technology will allow the customs bodies to get the correct data necessary to reduce the period of customs formalities at border crossings and to create conditions for transit. Thus, the process of goods transportation via the border will speed up, and it will be possible to control the correct payment of customs fees.
By Maria Shevchenko
biography
Leonid Shornikov
Deputy Head of the RF Federal Customs Service
Born on January 28, 1957, in Georgia. In 1978 he graduated from Krasnodar State Physical Training Institute; in 1987-1989 he was a student of Baku Higher Party School; in 2002 he graduated from Moscow State Open University, where he read law. Has worked as Deputy Head of Krasnodar customs, Novosibirsk customs, First Deputy Head of Siberian customs administration and Head of FTS Privolzhskoye customs administration. In 2005 he became major-general of the customs service. In July 2007 he was appointed Deputy Head of the Federal Customs Service. He speaks Englishand Georgian.
[~DETAIL_TEXT] => E-Declaration Will Become a Usual Thing
– Mr Shornikov, what are the most significant changes that influenced the work of the FTS in 2007?
– The most important factor of development was mass usage of inspection and screening complexes (ISC) to search oversized cargoes and vehicles. Equipment of border crossings with stationary and mobile ISCs creates the conditions to improve foreign economic activity by providing a continuous flow of goods and vehicles via the state border, to reduce delivery time and the cost of foreign partners’ expenditure on transport services. The second important aspect of increasing the efficiency of customs bodies was implementation of e-declaration. Today the offices included in the list of customs bodies are properly equipped to use e-declaration (later – the list).
In accordance with the realisation of the Concept of Customs Service Development, the RF FTS is increasing the amount of customs offices where e-declaration can be used. On October 1, 2007, 195 customs offices were in the list as the ones equipped well enough to use e-declaration. For the sake of comparison, at the end of 2006 there were only 161 offices.
To improve the e-form of declaration, the technology of giving e-data to customs bodies via the Internet is being put into operation. Today, measures are being taken to test such information technology at some customs offices subordinated to the Central Customs, the Southern Customs, and the North-Western Customs.
The new system of e-data supply differs from the technology that is in use now. Firstly, e-documents are prepared by the customs applicant, who uses his own information system. For example, at the Kashira office, it is the elaboration of the broker himself. Secondly, open communication channels are used to transfer the declaration and documents. Information security is provided by special hardware and software. Thus, the process of e-declaration becomes much cheaper.
Thirdly, documents are received, processed and scanned by means of established software. Once the technology is tested, e-declaration via Internet may become an established technical solution. It will be a large step forward on the qualitative level for all the technologies concerning providing e-data to customs bodies.
“A Single Information System Is Required”
– What are the drawbacks and problems caused by technical modernisation of the customs and transfer to a new technological level, in your opinion?
– When receiving and producing customs e-declarations, customs bodies have to print them out in almost every case. But it is not because of customs legislation, it is because a declarant must give a report to tax authorities and banks. And transporters are in the same situation. For example, Russian Railways are putting into operation an e-form of the railway bill, but they must have our real, non-virtual seals on paper copies of the documents. These problems are well-known and discussed at almost every level. Obviously, if all the interested bodies develop their own IT systems, we will hardly be able to transfer to e-document turnover without a unified programme. Then we will have to continue our extensive development course.
Nowadays, in accordance with the orders of the RF President and the Government, and the decisions of the State Border Committee, measures are being taken to integrate the IT resources of ministries and departments into the framework of the state programme “Electronic Russia”. They envisage also the development of a single database for resolving documents as well as an integrated information system at the RF border crossings.
- The new form for freight declaration causes a lot of discussions among foreign business partners. What is being done in the sector?
– The new form for freight customs declaration/transit declaration was put into operation on January 1, 2007. Since that day, a document unified with the single administrative document (SAD) of the European Union member-states, as well as new classifiers, has been used in Russia.
Unification of the requirements for filling in the freight customs declaration and transit declaration with the SAD requirements allows us to put the question about the Russian Federation joining the Convention on Simplifying Formalities in the Goods Trade Sector. Joining the Convention is also a term of Russia joining the Convention on the Common Transit Procedure, which has already been signed by 31 European states.
Considering the results of the year, normative and legislative acts used since January 1, 2007, were reissued. Since January 1, 2008, Order № 1057 “On Adopting the Instruction on the Order of Filling In Freight Customs Declaration And Transit Declaration” from 04.09.2007 of the RF FTS came into force, as well as Order № 1003 “On Classifiers and Lists of Normative And Reference Information Used for Customs’ Targets” from 21.08.2007 of the Russian Federal Customs Service.
20 Minutes to Register Cargo
– What else is being done by customs to simplify document registration and solve the problem of traffic jams at the border?
– In accordance with the message of the RF President, in terms of the Russia-EU Subcommittee for Customs and Transborder Cooperation, principle agreements have been reached to carry out a coordinated approach to solve the problem of long cargo registration at check-points on the border of Russia and the EU member-states.
At its meeting, the Subcommittee defined three priority directions of cooperation between customs bodies of Russia and the European Union to provide trade and reduce the time of border crossing significantly.
The first of them is measures to solve the problem of vehicle queues on the border between Russia and the EU member-states and support given to trade. In particular, they include legislative and administrative measures taken by Russia, which can fast and effectively tackle the traffic jams on the border.
The second priority direction of cooperation is organisation of the automated exchange of preliminary customs information.
The third direction is creation and improving of the infrastructure at border crossings.
Cargo flow volumes between different countries are increasing due to globalisation of the world economy and the geographical position of Russia means the shortest transport routes between Europe and Asia must cross its territory.
The reduction of time spent on customs formalities at border crossings and prevention of traffic jams on the border are necessary to provide favourable conditions for foreign economic activity and because of the prospect of Russia joining the WTO.
In 2007, the RF Federal Customs Service decreed that the procedure of customs formalities at road border crossings must not exceed 20 minutes, and the share of a consignment of goods to be searched at the border is 8%.
Large-sized goods and transport modes (airplanes and vessels, railway containers, trucks, refrigerators) are the most difficult objects for customs to inspect. It is necessary to fulfil a number of labour-intensive and lengthy unloading and loading work, and special space is required. Thus, only sampling single objects for examination is possible. For the same reasons vehicles and their construction junctions, that can be used as a cache, are searched selectively.
Since these objects can be used for organised contraband, customs services strive to use special equipment to find it. The most efficient customs control instruments to examine large-size cargoes and vehicles are inspecting and screening complexes. These technical facilities use ionising emission to take X-ray image of large-size cargoes and transport modes to fulfil customs control.
Customs control using inspecting and screening complexes is a non-damaging type of control, and it allows to check whether the carried goods are similar to the ones mentioned in the documents and solves other problems faced by the customs bodies when checking large-sized cargoes and other transport modes. To carry out the Federal target programme “State Border of the Russian Federation (2003-2010)”, the RF FTS is taking measures to provide border crossings with inspecting and screening complexes. Thus, since August 2007, 40 mobile inspecting and screening complexes have been supplied to all regional customs. In 2008 it is planned to purchase five more such complexes.
– What is the situation with putting simplified customs procedures into operation?
– The FTS of Russia set special simplified procedures for customs formalities in accordance with Article 68 of the RF Customs Code and with the order for such procedures in customs registration for definite persons envisaged by the Order of the Ministry of Economic Development and Trade in 2005.
Special simplified customs formalities may be set for persons who import goods on the customs territory of the Russian Federation and fulfil the following requirements of the Code:
a) persons must have neither unfulfilled determinations on a case about administrative offences in the customs sector nor be considered administratively punished for committing administrative violations when he applies to the customs for special simplified procedures;
b) persons are to hold a system to keep records of their commercial documentation in accordance with the Order, allowing the customs bodies to compare the data in it and information given to customs bodies to provide customs formalities;
c) persons involved in foreign economic activities for not less than three years.
To set the special simplified customs formalities, the applicant is to appeal either to regional customs or to the Federal Customs Service with a written application pledging to keep records of his commercial documentation in accordance with the requirements envisaged by the Order and agreeing to provide customs officers in charge with access to the record-keeping system.
In three quarters of 2007, the number of people who applied for special simplified customs formalities was 240, including large production enterprises, organisations specialising in road construction, importers bringing in goods for their own needs as well as to sell them on the Russian market.
The FTS Is Open for Dialogue with Business
– How do customs services interact with businessmen? Are there positive examples of joint agreements?
– Last year we continued to develop and enlarge the cooperation between the RF Federal Customs Service and Russian and foreign businessmen. The authorities of the FTS are attentive to the problems of foreign business partners in the customs sector and do their best to solve them as fast as possible to reach a consensus between both sides.
Respectively, the course announced by the RF FTS to develop partner relations on the vector “business-customs-business” was followed in the reporting year. In particular, in 2007 the Public-Consulting Council for Customs Policy was formed at the FTS of Russia. There are 35 representatives of Russian business in it. For the sake of comparison, in the former Consulting Council, businesses were represented by only 21 foreign economic partners. In the current Council there are also three members of the Public Chamber of the Russian Federation. Two meetings of the Council have been held so far. The Plan of work of the Council in 2008 is being formed in accordance with the wishes of businesses and the opinions of the FTS departments.
Among traditional foreign partners of the FTS of Russia there are the Union of German Economy, Association of European Business, and the American Trade Chamber. One of the new active partners is the Japanese External Trade Organization (JETRO). Authorities and experts of the RF Federal Customs Service regularly consult the leaders of the organisations and pay much attention to the problems their foreign partners face.
A new activity of the FTS in its interaction with the foreign participants is the research of the opinion of businessmen about the work of customs bodies.
Besides, to develop and improve interaction with the transport sector, a Memorandum of Understanding was concluded by the Federal Customs Service and OAO RZD last year. The document sets the basic directions of interaction and cooperation development. Joint elaboration and realisation of programmes and projects for customs and railway infrastructure development are envisaged. Moreover, technological schemes and technical conditions of the sides’ interaction on international cargo and passenger railway transportation are to be carried out. E-document turnover, passenger and luggage control during travel, preliminary on-line informing of customs bodies about the goods and transport facilities carried via the RF border by railway transport will be provided during passenger transportation.
– What are the benefits of the launch of the Customs Union between Byelorussia, Kazakhstan and Russia?
– The RF Federal Customs Service takes an active role in formation of the legislative base of the Customs Union between the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation. Experts of EurAsEC (The Eurasian Economic Community) member-states also participate in the activities of working groups. Creation of the organisation is targeted at formation of a single economic and customs space. If the customs control is transferred to the external border of the Customs Union, there will be conditions for through transportation of goods on the territory of the Customs Union’s member-countries in the mutual trade mode. These measures will give us a new impulse to unify legislation concerning customs, tariff and non-tariff regulation, taxation of the Union member-states, and to use 100% of the transport infrastructure of the countries and develop transport systems taking into account the interests of Russia. A prospective segment of cooperation is interaction in the IT sector. A single data-exchange technology will allow the customs bodies to get the correct data necessary to reduce the period of customs formalities at border crossings and to create conditions for transit. Thus, the process of goods transportation via the border will speed up, and it will be possible to control the correct payment of customs fees.
By Maria Shevchenko
biography
Leonid Shornikov
Deputy Head of the RF Federal Customs Service
Born on January 28, 1957, in Georgia. In 1978 he graduated from Krasnodar State Physical Training Institute; in 1987-1989 he was a student of Baku Higher Party School; in 2002 he graduated from Moscow State Open University, where he read law. Has worked as Deputy Head of Krasnodar customs, Novosibirsk customs, First Deputy Head of Siberian customs administration and Head of FTS Privolzhskoye customs administration. In 2005 he became major-general of the customs service. In July 2007 he was appointed Deputy Head of the Federal Customs Service. He speaks Englishand Georgian.
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[PREVIEW_TEXT] => Participants in foreign economic activity consider that the main problems with Russian customs are turnover of paper documents and unreasonably long searches. Customs officers are ready to provide customs formalities through e-documents and hold examination by means of special electronic complexes, which will speed up the process significantly. Leonid Shornikov, Deputy Head of the RF Federal Customs Service (FTS), told The RZD-Partner International about the innovations implemented at the RF border crossings.
[~PREVIEW_TEXT] => Participants in foreign economic activity consider that the main problems with Russian customs are turnover of paper documents and unreasonably long searches. Customs officers are ready to provide customs formalities through e-documents and hold examination by means of special electronic complexes, which will speed up the process significantly. Leonid Shornikov, Deputy Head of the RF Federal Customs Service (FTS), told The RZD-Partner International about the innovations implemented at the RF border crossings.
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[DETAIL_TEXT] => E-Declaration Will Become a Usual Thing
– Mr Shornikov, what are the most significant changes that influenced the work of the FTS in 2007?
– The most important factor of development was mass usage of inspection and screening complexes (ISC) to search oversized cargoes and vehicles. Equipment of border crossings with stationary and mobile ISCs creates the conditions to improve foreign economic activity by providing a continuous flow of goods and vehicles via the state border, to reduce delivery time and the cost of foreign partners’ expenditure on transport services. The second important aspect of increasing the efficiency of customs bodies was implementation of e-declaration. Today the offices included in the list of customs bodies are properly equipped to use e-declaration (later – the list).
In accordance with the realisation of the Concept of Customs Service Development, the RF FTS is increasing the amount of customs offices where e-declaration can be used. On October 1, 2007, 195 customs offices were in the list as the ones equipped well enough to use e-declaration. For the sake of comparison, at the end of 2006 there were only 161 offices.
To improve the e-form of declaration, the technology of giving e-data to customs bodies via the Internet is being put into operation. Today, measures are being taken to test such information technology at some customs offices subordinated to the Central Customs, the Southern Customs, and the North-Western Customs.
The new system of e-data supply differs from the technology that is in use now. Firstly, e-documents are prepared by the customs applicant, who uses his own information system. For example, at the Kashira office, it is the elaboration of the broker himself. Secondly, open communication channels are used to transfer the declaration and documents. Information security is provided by special hardware and software. Thus, the process of e-declaration becomes much cheaper.
Thirdly, documents are received, processed and scanned by means of established software. Once the technology is tested, e-declaration via Internet may become an established technical solution. It will be a large step forward on the qualitative level for all the technologies concerning providing e-data to customs bodies.
“A Single Information System Is Required”
– What are the drawbacks and problems caused by technical modernisation of the customs and transfer to a new technological level, in your opinion?
– When receiving and producing customs e-declarations, customs bodies have to print them out in almost every case. But it is not because of customs legislation, it is because a declarant must give a report to tax authorities and banks. And transporters are in the same situation. For example, Russian Railways are putting into operation an e-form of the railway bill, but they must have our real, non-virtual seals on paper copies of the documents. These problems are well-known and discussed at almost every level. Obviously, if all the interested bodies develop their own IT systems, we will hardly be able to transfer to e-document turnover without a unified programme. Then we will have to continue our extensive development course.
Nowadays, in accordance with the orders of the RF President and the Government, and the decisions of the State Border Committee, measures are being taken to integrate the IT resources of ministries and departments into the framework of the state programme “Electronic Russia”. They envisage also the development of a single database for resolving documents as well as an integrated information system at the RF border crossings.
- The new form for freight declaration causes a lot of discussions among foreign business partners. What is being done in the sector?
– The new form for freight customs declaration/transit declaration was put into operation on January 1, 2007. Since that day, a document unified with the single administrative document (SAD) of the European Union member-states, as well as new classifiers, has been used in Russia.
Unification of the requirements for filling in the freight customs declaration and transit declaration with the SAD requirements allows us to put the question about the Russian Federation joining the Convention on Simplifying Formalities in the Goods Trade Sector. Joining the Convention is also a term of Russia joining the Convention on the Common Transit Procedure, which has already been signed by 31 European states.
Considering the results of the year, normative and legislative acts used since January 1, 2007, were reissued. Since January 1, 2008, Order № 1057 “On Adopting the Instruction on the Order of Filling In Freight Customs Declaration And Transit Declaration” from 04.09.2007 of the RF FTS came into force, as well as Order № 1003 “On Classifiers and Lists of Normative And Reference Information Used for Customs’ Targets” from 21.08.2007 of the Russian Federal Customs Service.
20 Minutes to Register Cargo
– What else is being done by customs to simplify document registration and solve the problem of traffic jams at the border?
– In accordance with the message of the RF President, in terms of the Russia-EU Subcommittee for Customs and Transborder Cooperation, principle agreements have been reached to carry out a coordinated approach to solve the problem of long cargo registration at check-points on the border of Russia and the EU member-states.
At its meeting, the Subcommittee defined three priority directions of cooperation between customs bodies of Russia and the European Union to provide trade and reduce the time of border crossing significantly.
The first of them is measures to solve the problem of vehicle queues on the border between Russia and the EU member-states and support given to trade. In particular, they include legislative and administrative measures taken by Russia, which can fast and effectively tackle the traffic jams on the border.
The second priority direction of cooperation is organisation of the automated exchange of preliminary customs information.
The third direction is creation and improving of the infrastructure at border crossings.
Cargo flow volumes between different countries are increasing due to globalisation of the world economy and the geographical position of Russia means the shortest transport routes between Europe and Asia must cross its territory.
The reduction of time spent on customs formalities at border crossings and prevention of traffic jams on the border are necessary to provide favourable conditions for foreign economic activity and because of the prospect of Russia joining the WTO.
In 2007, the RF Federal Customs Service decreed that the procedure of customs formalities at road border crossings must not exceed 20 minutes, and the share of a consignment of goods to be searched at the border is 8%.
Large-sized goods and transport modes (airplanes and vessels, railway containers, trucks, refrigerators) are the most difficult objects for customs to inspect. It is necessary to fulfil a number of labour-intensive and lengthy unloading and loading work, and special space is required. Thus, only sampling single objects for examination is possible. For the same reasons vehicles and their construction junctions, that can be used as a cache, are searched selectively.
Since these objects can be used for organised contraband, customs services strive to use special equipment to find it. The most efficient customs control instruments to examine large-size cargoes and vehicles are inspecting and screening complexes. These technical facilities use ionising emission to take X-ray image of large-size cargoes and transport modes to fulfil customs control.
Customs control using inspecting and screening complexes is a non-damaging type of control, and it allows to check whether the carried goods are similar to the ones mentioned in the documents and solves other problems faced by the customs bodies when checking large-sized cargoes and other transport modes. To carry out the Federal target programme “State Border of the Russian Federation (2003-2010)”, the RF FTS is taking measures to provide border crossings with inspecting and screening complexes. Thus, since August 2007, 40 mobile inspecting and screening complexes have been supplied to all regional customs. In 2008 it is planned to purchase five more such complexes.
– What is the situation with putting simplified customs procedures into operation?
– The FTS of Russia set special simplified procedures for customs formalities in accordance with Article 68 of the RF Customs Code and with the order for such procedures in customs registration for definite persons envisaged by the Order of the Ministry of Economic Development and Trade in 2005.
Special simplified customs formalities may be set for persons who import goods on the customs territory of the Russian Federation and fulfil the following requirements of the Code:
a) persons must have neither unfulfilled determinations on a case about administrative offences in the customs sector nor be considered administratively punished for committing administrative violations when he applies to the customs for special simplified procedures;
b) persons are to hold a system to keep records of their commercial documentation in accordance with the Order, allowing the customs bodies to compare the data in it and information given to customs bodies to provide customs formalities;
c) persons involved in foreign economic activities for not less than three years.
To set the special simplified customs formalities, the applicant is to appeal either to regional customs or to the Federal Customs Service with a written application pledging to keep records of his commercial documentation in accordance with the requirements envisaged by the Order and agreeing to provide customs officers in charge with access to the record-keeping system.
In three quarters of 2007, the number of people who applied for special simplified customs formalities was 240, including large production enterprises, organisations specialising in road construction, importers bringing in goods for their own needs as well as to sell them on the Russian market.
The FTS Is Open for Dialogue with Business
– How do customs services interact with businessmen? Are there positive examples of joint agreements?
– Last year we continued to develop and enlarge the cooperation between the RF Federal Customs Service and Russian and foreign businessmen. The authorities of the FTS are attentive to the problems of foreign business partners in the customs sector and do their best to solve them as fast as possible to reach a consensus between both sides.
Respectively, the course announced by the RF FTS to develop partner relations on the vector “business-customs-business” was followed in the reporting year. In particular, in 2007 the Public-Consulting Council for Customs Policy was formed at the FTS of Russia. There are 35 representatives of Russian business in it. For the sake of comparison, in the former Consulting Council, businesses were represented by only 21 foreign economic partners. In the current Council there are also three members of the Public Chamber of the Russian Federation. Two meetings of the Council have been held so far. The Plan of work of the Council in 2008 is being formed in accordance with the wishes of businesses and the opinions of the FTS departments.
Among traditional foreign partners of the FTS of Russia there are the Union of German Economy, Association of European Business, and the American Trade Chamber. One of the new active partners is the Japanese External Trade Organization (JETRO). Authorities and experts of the RF Federal Customs Service regularly consult the leaders of the organisations and pay much attention to the problems their foreign partners face.
A new activity of the FTS in its interaction with the foreign participants is the research of the opinion of businessmen about the work of customs bodies.
Besides, to develop and improve interaction with the transport sector, a Memorandum of Understanding was concluded by the Federal Customs Service and OAO RZD last year. The document sets the basic directions of interaction and cooperation development. Joint elaboration and realisation of programmes and projects for customs and railway infrastructure development are envisaged. Moreover, technological schemes and technical conditions of the sides’ interaction on international cargo and passenger railway transportation are to be carried out. E-document turnover, passenger and luggage control during travel, preliminary on-line informing of customs bodies about the goods and transport facilities carried via the RF border by railway transport will be provided during passenger transportation.
– What are the benefits of the launch of the Customs Union between Byelorussia, Kazakhstan and Russia?
– The RF Federal Customs Service takes an active role in formation of the legislative base of the Customs Union between the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation. Experts of EurAsEC (The Eurasian Economic Community) member-states also participate in the activities of working groups. Creation of the organisation is targeted at formation of a single economic and customs space. If the customs control is transferred to the external border of the Customs Union, there will be conditions for through transportation of goods on the territory of the Customs Union’s member-countries in the mutual trade mode. These measures will give us a new impulse to unify legislation concerning customs, tariff and non-tariff regulation, taxation of the Union member-states, and to use 100% of the transport infrastructure of the countries and develop transport systems taking into account the interests of Russia. A prospective segment of cooperation is interaction in the IT sector. A single data-exchange technology will allow the customs bodies to get the correct data necessary to reduce the period of customs formalities at border crossings and to create conditions for transit. Thus, the process of goods transportation via the border will speed up, and it will be possible to control the correct payment of customs fees.
By Maria Shevchenko
biography
Leonid Shornikov
Deputy Head of the RF Federal Customs Service
Born on January 28, 1957, in Georgia. In 1978 he graduated from Krasnodar State Physical Training Institute; in 1987-1989 he was a student of Baku Higher Party School; in 2002 he graduated from Moscow State Open University, where he read law. Has worked as Deputy Head of Krasnodar customs, Novosibirsk customs, First Deputy Head of Siberian customs administration and Head of FTS Privolzhskoye customs administration. In 2005 he became major-general of the customs service. In July 2007 he was appointed Deputy Head of the Federal Customs Service. He speaks Englishand Georgian.
[~DETAIL_TEXT] => E-Declaration Will Become a Usual Thing
– Mr Shornikov, what are the most significant changes that influenced the work of the FTS in 2007?
– The most important factor of development was mass usage of inspection and screening complexes (ISC) to search oversized cargoes and vehicles. Equipment of border crossings with stationary and mobile ISCs creates the conditions to improve foreign economic activity by providing a continuous flow of goods and vehicles via the state border, to reduce delivery time and the cost of foreign partners’ expenditure on transport services. The second important aspect of increasing the efficiency of customs bodies was implementation of e-declaration. Today the offices included in the list of customs bodies are properly equipped to use e-declaration (later – the list).
In accordance with the realisation of the Concept of Customs Service Development, the RF FTS is increasing the amount of customs offices where e-declaration can be used. On October 1, 2007, 195 customs offices were in the list as the ones equipped well enough to use e-declaration. For the sake of comparison, at the end of 2006 there were only 161 offices.
To improve the e-form of declaration, the technology of giving e-data to customs bodies via the Internet is being put into operation. Today, measures are being taken to test such information technology at some customs offices subordinated to the Central Customs, the Southern Customs, and the North-Western Customs.
The new system of e-data supply differs from the technology that is in use now. Firstly, e-documents are prepared by the customs applicant, who uses his own information system. For example, at the Kashira office, it is the elaboration of the broker himself. Secondly, open communication channels are used to transfer the declaration and documents. Information security is provided by special hardware and software. Thus, the process of e-declaration becomes much cheaper.
Thirdly, documents are received, processed and scanned by means of established software. Once the technology is tested, e-declaration via Internet may become an established technical solution. It will be a large step forward on the qualitative level for all the technologies concerning providing e-data to customs bodies.
“A Single Information System Is Required”
– What are the drawbacks and problems caused by technical modernisation of the customs and transfer to a new technological level, in your opinion?
– When receiving and producing customs e-declarations, customs bodies have to print them out in almost every case. But it is not because of customs legislation, it is because a declarant must give a report to tax authorities and banks. And transporters are in the same situation. For example, Russian Railways are putting into operation an e-form of the railway bill, but they must have our real, non-virtual seals on paper copies of the documents. These problems are well-known and discussed at almost every level. Obviously, if all the interested bodies develop their own IT systems, we will hardly be able to transfer to e-document turnover without a unified programme. Then we will have to continue our extensive development course.
Nowadays, in accordance with the orders of the RF President and the Government, and the decisions of the State Border Committee, measures are being taken to integrate the IT resources of ministries and departments into the framework of the state programme “Electronic Russia”. They envisage also the development of a single database for resolving documents as well as an integrated information system at the RF border crossings.
- The new form for freight declaration causes a lot of discussions among foreign business partners. What is being done in the sector?
– The new form for freight customs declaration/transit declaration was put into operation on January 1, 2007. Since that day, a document unified with the single administrative document (SAD) of the European Union member-states, as well as new classifiers, has been used in Russia.
Unification of the requirements for filling in the freight customs declaration and transit declaration with the SAD requirements allows us to put the question about the Russian Federation joining the Convention on Simplifying Formalities in the Goods Trade Sector. Joining the Convention is also a term of Russia joining the Convention on the Common Transit Procedure, which has already been signed by 31 European states.
Considering the results of the year, normative and legislative acts used since January 1, 2007, were reissued. Since January 1, 2008, Order № 1057 “On Adopting the Instruction on the Order of Filling In Freight Customs Declaration And Transit Declaration” from 04.09.2007 of the RF FTS came into force, as well as Order № 1003 “On Classifiers and Lists of Normative And Reference Information Used for Customs’ Targets” from 21.08.2007 of the Russian Federal Customs Service.
20 Minutes to Register Cargo
– What else is being done by customs to simplify document registration and solve the problem of traffic jams at the border?
– In accordance with the message of the RF President, in terms of the Russia-EU Subcommittee for Customs and Transborder Cooperation, principle agreements have been reached to carry out a coordinated approach to solve the problem of long cargo registration at check-points on the border of Russia and the EU member-states.
At its meeting, the Subcommittee defined three priority directions of cooperation between customs bodies of Russia and the European Union to provide trade and reduce the time of border crossing significantly.
The first of them is measures to solve the problem of vehicle queues on the border between Russia and the EU member-states and support given to trade. In particular, they include legislative and administrative measures taken by Russia, which can fast and effectively tackle the traffic jams on the border.
The second priority direction of cooperation is organisation of the automated exchange of preliminary customs information.
The third direction is creation and improving of the infrastructure at border crossings.
Cargo flow volumes between different countries are increasing due to globalisation of the world economy and the geographical position of Russia means the shortest transport routes between Europe and Asia must cross its territory.
The reduction of time spent on customs formalities at border crossings and prevention of traffic jams on the border are necessary to provide favourable conditions for foreign economic activity and because of the prospect of Russia joining the WTO.
In 2007, the RF Federal Customs Service decreed that the procedure of customs formalities at road border crossings must not exceed 20 minutes, and the share of a consignment of goods to be searched at the border is 8%.
Large-sized goods and transport modes (airplanes and vessels, railway containers, trucks, refrigerators) are the most difficult objects for customs to inspect. It is necessary to fulfil a number of labour-intensive and lengthy unloading and loading work, and special space is required. Thus, only sampling single objects for examination is possible. For the same reasons vehicles and their construction junctions, that can be used as a cache, are searched selectively.
Since these objects can be used for organised contraband, customs services strive to use special equipment to find it. The most efficient customs control instruments to examine large-size cargoes and vehicles are inspecting and screening complexes. These technical facilities use ionising emission to take X-ray image of large-size cargoes and transport modes to fulfil customs control.
Customs control using inspecting and screening complexes is a non-damaging type of control, and it allows to check whether the carried goods are similar to the ones mentioned in the documents and solves other problems faced by the customs bodies when checking large-sized cargoes and other transport modes. To carry out the Federal target programme “State Border of the Russian Federation (2003-2010)”, the RF FTS is taking measures to provide border crossings with inspecting and screening complexes. Thus, since August 2007, 40 mobile inspecting and screening complexes have been supplied to all regional customs. In 2008 it is planned to purchase five more such complexes.
– What is the situation with putting simplified customs procedures into operation?
– The FTS of Russia set special simplified procedures for customs formalities in accordance with Article 68 of the RF Customs Code and with the order for such procedures in customs registration for definite persons envisaged by the Order of the Ministry of Economic Development and Trade in 2005.
Special simplified customs formalities may be set for persons who import goods on the customs territory of the Russian Federation and fulfil the following requirements of the Code:
a) persons must have neither unfulfilled determinations on a case about administrative offences in the customs sector nor be considered administratively punished for committing administrative violations when he applies to the customs for special simplified procedures;
b) persons are to hold a system to keep records of their commercial documentation in accordance with the Order, allowing the customs bodies to compare the data in it and information given to customs bodies to provide customs formalities;
c) persons involved in foreign economic activities for not less than three years.
To set the special simplified customs formalities, the applicant is to appeal either to regional customs or to the Federal Customs Service with a written application pledging to keep records of his commercial documentation in accordance with the requirements envisaged by the Order and agreeing to provide customs officers in charge with access to the record-keeping system.
In three quarters of 2007, the number of people who applied for special simplified customs formalities was 240, including large production enterprises, organisations specialising in road construction, importers bringing in goods for their own needs as well as to sell them on the Russian market.
The FTS Is Open for Dialogue with Business
– How do customs services interact with businessmen? Are there positive examples of joint agreements?
– Last year we continued to develop and enlarge the cooperation between the RF Federal Customs Service and Russian and foreign businessmen. The authorities of the FTS are attentive to the problems of foreign business partners in the customs sector and do their best to solve them as fast as possible to reach a consensus between both sides.
Respectively, the course announced by the RF FTS to develop partner relations on the vector “business-customs-business” was followed in the reporting year. In particular, in 2007 the Public-Consulting Council for Customs Policy was formed at the FTS of Russia. There are 35 representatives of Russian business in it. For the sake of comparison, in the former Consulting Council, businesses were represented by only 21 foreign economic partners. In the current Council there are also three members of the Public Chamber of the Russian Federation. Two meetings of the Council have been held so far. The Plan of work of the Council in 2008 is being formed in accordance with the wishes of businesses and the opinions of the FTS departments.
Among traditional foreign partners of the FTS of Russia there are the Union of German Economy, Association of European Business, and the American Trade Chamber. One of the new active partners is the Japanese External Trade Organization (JETRO). Authorities and experts of the RF Federal Customs Service regularly consult the leaders of the organisations and pay much attention to the problems their foreign partners face.
A new activity of the FTS in its interaction with the foreign participants is the research of the opinion of businessmen about the work of customs bodies.
Besides, to develop and improve interaction with the transport sector, a Memorandum of Understanding was concluded by the Federal Customs Service and OAO RZD last year. The document sets the basic directions of interaction and cooperation development. Joint elaboration and realisation of programmes and projects for customs and railway infrastructure development are envisaged. Moreover, technological schemes and technical conditions of the sides’ interaction on international cargo and passenger railway transportation are to be carried out. E-document turnover, passenger and luggage control during travel, preliminary on-line informing of customs bodies about the goods and transport facilities carried via the RF border by railway transport will be provided during passenger transportation.
– What are the benefits of the launch of the Customs Union between Byelorussia, Kazakhstan and Russia?
– The RF Federal Customs Service takes an active role in formation of the legislative base of the Customs Union between the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation. Experts of EurAsEC (The Eurasian Economic Community) member-states also participate in the activities of working groups. Creation of the organisation is targeted at formation of a single economic and customs space. If the customs control is transferred to the external border of the Customs Union, there will be conditions for through transportation of goods on the territory of the Customs Union’s member-countries in the mutual trade mode. These measures will give us a new impulse to unify legislation concerning customs, tariff and non-tariff regulation, taxation of the Union member-states, and to use 100% of the transport infrastructure of the countries and develop transport systems taking into account the interests of Russia. A prospective segment of cooperation is interaction in the IT sector. A single data-exchange technology will allow the customs bodies to get the correct data necessary to reduce the period of customs formalities at border crossings and to create conditions for transit. Thus, the process of goods transportation via the border will speed up, and it will be possible to control the correct payment of customs fees.
By Maria Shevchenko
biography
Leonid Shornikov
Deputy Head of the RF Federal Customs Service
Born on January 28, 1957, in Georgia. In 1978 he graduated from Krasnodar State Physical Training Institute; in 1987-1989 he was a student of Baku Higher Party School; in 2002 he graduated from Moscow State Open University, where he read law. Has worked as Deputy Head of Krasnodar customs, Novosibirsk customs, First Deputy Head of Siberian customs administration and Head of FTS Privolzhskoye customs administration. In 2005 he became major-general of the customs service. In July 2007 he was appointed Deputy Head of the Federal Customs Service. He speaks Englishand Georgian.
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President of JSC Russian Railways Vladimir Yakunin told The RZD-Partner International about the company’s results in 2007 and its strategic development plans.Array
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[DETAIL_TEXT] => Development According to Strategy
– Mr. Yakunin, in September 2007 the RF Government approved the “Strategy of Railway Transport Development to 2030”. This document is important not only for the railway sector but for the Russian economy as well. What are the basic stages of the strategy’s realisation, what are the targets to be reached?
– The Strategy has already been supported by authorities and businessmen. All events and processes envisaged by the Strategy are aimed at increasing the competitiveness of the railway sector, to form a stable transport system, to improve the safety of the railway infrastructure and to realise the transit potential of Russia efficiently. We plan to reduce joint transport and economic expenses, to make transportation quality and safety meet the requirements of the country’s population, economy and highest world standards, to make railway transport more attractive and create favourable conditions for the business to participate in the sector’s development.
The strategic development of railway transport in the Russian Federation to 2030 will be carried out in two stages.
The first stage is modernisation of railway transport. In 2008–2015 the traffic capacities on the main routes are to increase to the necessary level, the existing infrastructure is to be modernised, the amount of rolling stock is to grow to carry the whole transportation volume required and there are to be no wagons or locomotives whose life-time has expired. Also, new technical requirements for equipment and technologies are to be developed, project and research works are to start, and new railway lines are to be built.
The second stage is the dynamic enlargement of the railway network (2016–2030). It envisages creation of infrastructure conditions to develop new “points” of economic growth in the country, reaching the level of world railway transport technical and technological development and to increase the global competitiveness of Russian railway transport.
The strategy is aimed at fulfilling the innovation scenario of the Russian Federation. It is characterised by concentration of efforts in advanced scientific and technological directions, which will allow us to use national developments and improve the position of Russia in the world market of high-tech production and services. A specific feature of the innovation scenario is changing the GDP structure by increasing the share of high-tech production.
The results of the strategy implementation are liquidation of the limitations on traffic capacities in RF public railway transport and creation of an infrastructure base comparable to the world level to develop new places of economic growth in the country, reaching a modern level of infrastructure development and provision of the proven territories with transport.
By 2030, over 20,000 km of new railway lines are to be put into operation and 7,500 km of tracks are to be electrified.
The rolling stock park is to be renewed by 2030. Over 23,000 locomotives, over 900,000 freight wagons and about 29,500 passenger rail cars are to be purchased.
High-speed railway lines will be constructed to provide proper railway communication, more attractive and comfortable conditions for passengers and improvements to safety. The length of lines, where passenger trains will run at the speed of up to 350 kph, will amount to 1,528 km by 2030. Last year, JSC Russian Railways concluded several contracts with foreign manufacturers for high-speed passenger train supply. I would like to highlight two contracts: with German company Siemens AG for eight high-speed “Velaro Rus” trains, including maintenance for 30 years; and with French company Alstom for supply of high-speed “Pendolino” electric trains to service the Saint Petersburg – Helsinki line.
According to the strategy, by 2030 the freight turnover is to increase to 3,300 tons per kilometre and the passenger turnover – to 231.3 billion passenger kilometres annually.
The volume of international transportation is to grow to 728 million tons per annum.
Due to modernisation of the infrastructure, the speed of passenger trains is to increase to 66 kph and to 72 kph on the main lines by 2030. The speed of containerised cargo transportation is to grow to 1,000 km per day and to 420 km per day for regular transportation.
In 2008–2030, more than 13 trillion roubles are to be invested into railway transport development. The Russian Federation and its subjects are to invest RUR 3.4 trillion, OAO RZD over RUR 5.8 trillion, and the planned share of private investors exceeds RUR 4.4 trillion.
– In 2007, realisation of the third and final stage of the railway transport structural reform continued. What was done and what are the results?
– The work of railways became more stable in 2007, better results in transportation sector were achieved and new opportunities for investment attraction and competition development were created. But first and foremost, it became possible, due to railway transport reform. In May 2007, the Governmental Commission for Industry, Technologies and Transport Development in the Russian Federation approved the target model of the railway transport services market at the third stage of its structural reform. In accordance with the model, by 2010 JSC Russian Railways will be the only long distance freight and passenger carrier by public railway transport. Simultaneously, the process of establishing local suburban carriers will continue. The opportunity and reasonability of separating transport services from infrastructure ones will be evaluated. The target model of the market cannot be reached without radical changes in the normative and legislative base. JSC Russian Railways takes an active part in developing amendments to obsolete acts.
An important element in creating the target market model is measures taken to develop competition in the freight wagon sector. In June 2007, the Board of Directors of JSC Russian Railways made the decision to launch The First Cargo Company. 200,000 wagons will be put into the authorised capital of the new company.
To develop competition in the repair and maintenance of rolling stock, arrangements were made to introduce into the market wagon-repair affiliates of the company, the list of which was approved by JSC Russian Railways Board of Directors.
In 2007, the Board of Directors of JSC Russian Railways made the decision to launch 15 daughter companies and joint ventures. The operation of the launched companies was a success, the joint assets consequently increased and revenue and profit grew.
To attract scaled investments to modernise rolling stock and reach infrastructure targets, JSC Russian Railways decided to sell shares of its daughter companies, first of all, JSC TransContainer and The First Cargo Company. A number of measures were taken to make the daughter companies more attractive for investors. A strategy of development was formed for every subsidiary, arrangements were made to improve the professional skills of the personnel, to strengthen the company’s competitive position, to enter new markets and to renew the production base.
The total volume of JSC Russian Railways revenue from selling the shares and introducing its subsidiaries in the market may amount to RUR 150 billion, which will be a significant contribution to growth in investment potential.
Now document packs for the launch of another 20 daughter companies, as well as logistic enterprises, are being formed. Last year, the dynamics of reaching reform targets was kept high, the quality of transport services increased, the competition segments of the market enlarged and market relations were formed in the railways’ operation supplement sector.
We managed to maintain the reliability of the railways, increase the flow of investment into railway development and stop cross-subsidising of passenger transportation at the expense of freight transportation. The efficiency of exploiting railway opportunities grew and the financial activity of railway transport became more transparent.
Investments: Special Attention to Infrastructure
– On what principles is the investment programme of JSC Russian Railways based? What are its main priorities?
– The company’s investment programme is built on the principles of thorough planning, i.e. as a portfolio of investment projects with approved budgets and terms of realisation.
In forming the investment programme for 2007, JSC Russian Railways took into consideration the need to reach the following priority targets:
• further development of railway network traffic capacity, including lines to border crossings and port approaches;
• launch of fast passenger transportation;
• improvement of the safety and quality of cargo and passenger transportation;
• provision of the necessary volumes of rolling stock purchase and modernisation to fulfill the planned transportation volume.
On the whole, in 2007 the investment programme of JSC Russian Railways, financed at the expense of all the resources, was fulfilled by RUR 259.1 billion, including RUR 257.1 billion of the company’s own means. It is worth noting that the volume of capital investments, fulfilled at the expense of the company’s own funds, grew by 36% year-on-year (in comparable prices).
At the expense of external resources, about RUR 2 billion was spent on the capital investments programme. The attracted and budget means were spent to finance reconstruction of passenger railway stations, prevention measures in the traffic safety programme and expenses incurred connecting industrial tracks to the public network.
There were three basic stages in the investment programme for 2007.
The first stage was “Dedicated Investment Projects” (investment volume RUR 120.1 billion). The stage included projects aimed at development and modernisation of infrastructure on the main routes, providing the growth of the company’s revenues.
The second stage was “Economy Projects” (investment volume RUR 79.9 billion). It included social development projects as well as renewal of the basic assets of JSC Russian Railways affiliates.
The third stage was renewal of rolling stock. The investment volume amounted to RUR 49.7 billion. And by means of using a leasing mechanism, the rolling stock was renewed for the sum of RUR 29 billion.
– What has been done to develop container transportation?
– Against the background of the summit between Russia and the EU, JSC TransContainer and VR Ltd (Finnish Railways) concluded a contract on a joint venture – ContainerTransScandinavia – launched on a parity basis. The authorised capital of the new company is EUR 150,000. The marketing policy of ContainerTransScandinavia is based on the increase of container volumes transported by railway from Finland to Russia during the past five years. It must be done by redirecting cargo flows from motor transport. The potential volume is 20,000 TEU annually.
Trilateral cooperation between JSC Russian Railways, Deutsche Bahn AG and the Chinese Ministry of Railways is continuing. At meetings held in 2007, the trilaterial working group presented an analysis of the current market for container transportation between Europe and China; the prospects of the market development were discussed; the comparative analysis of the cost of transportation and the freight delivery terms by rail and sea on the route China – Russia – Germany was made. Due to the active positioning of JSC Russian Railways, the interest of Japanese cargo owners in transportation along the Transsiberian railway has been rekindled. Since the start of 2007, the volume of containerised Japanese goods transportation via the Russian railway network grew by 50%. Testing transportation of car components produced by Toyota via the Transsib was also held.
– Railway transport is very popular in Russia for transportation inside the country. What innovations in the passenger servicing sector were put into operation last year?
– On July 1, gender differentiation of compartments was implemented in long-distance trains. The new service allows passengers to choose the gender of people travelling in the same compartment, which makes the travel more comfortable. But the implementation of the new service does not mean that there will be no mixed compartments – couples or families can still travel in one compartment.
The equipment in long-distance trains is being actively modernised. A number of high-comfort trains are equipped with modern Internet compartments – special compartments with board and computer games, and soft toys for children.
In all JSC Russian Railways ticket offices that are equipped with ASU Express terminals, a new service is provided: registration of a ticket paid by bank cards via JSC Russian Railways corporate website. It is planned to translate the interface of online order into English and organise ticket delivery, if a passenger asks for it as he pays for the order via the website. Over 114,000 tickets were bought with the use of the service in May to December.
Mutually Beneficial Cooperation: Partner from China Has Good Prospects
– Speaking about container transportation you mentioned projects carried out by the company in cooperation with transporters from other states. Thus, the activities of JSC Russian Railways prove that the company has strengthened its position on the international transport market. What other measures are being taken to integrate Russian railways into the systems of international cargo and passenger transportation?
– We think that the most important measures are firstly coordination of actions with administrations of the leading railways in the neighbouring states in the Eurasian transport market by creating working groups and joint ventures; secondly, interaction with foreign companies in the sector of technological and scientific and technical cooperation; thirdly, operating in foreign infrastructure markets.
In the Railway Transport Council of the CIS Member-States, JSC Russian Railways has done a lot to solve problems such as improvement of settlement payments, realisation of joint projects in the sectors of logistics and infrastructure modernisation.
In spring, JSC Russian Railways and SNCF (the French National Railway Service) signed a Memorandum of Cooperation to share their experience in reforming railway transport, launching fast and high-speed transportation, exchange of advanced technologies for passenger and cargo transportation, and the launch of a direct passenger service between Paris and Moscow.
At the same time, JSC Russian Railways and the Chinese Ministry of Railways concluded an agreement on strengthening cooperation in the crude oil transportation sector. Their share made 10% of the total foreign trade cargo transportation volume carried via Russian railway network between the RF and China.
An important aspect of the company’s strengthening of its international position is realisation of infrastructure projects.
Thus, JSC Russian Railways and Austrian Federal Railways signed a bilateral memorandum of mutual understanding for the project of a possible extension of a railway with a 1,520 mm-wide gauge from Kosice (Slovakia) to Bratislava and Vienna. The new project envisages that on the line Kosice – Bratislava – Vienna, where the acting railway is with the gauge of 1,435 mm width (European standard), a new railway with 1,520 mm-wide gauge will be constructed (a characteristic feature of the CIS member-states’ railways). The total length of the line to Vienna will amount to 575 km. Experts say that a railway with a gauge of the same standard will allow transit freight flow from Russia to Europe to increase by 60%.This will also help transport cargoes from the Asian and Pacific region to Europe by railway. The preliminary cost of the project is USD 1.2 billion.
The project of a new railway line Kazvin – Resht – Astara construction is being developed. The line is very important for increasing transportation along the international “North – South” transport corridor.
In Sassnitz (Germany), JSC Russian Railways and Railion Deutschland AG signed basic documents regulating freight transportation between Russia and Germany on the railway-ferry line Baltiysk – Sassnitz – Mukran. Thus, the first stage of railway-ferry communication between Russian and German ports had been completed.
In June, JSC Russian Railways became a full member of the European Regional Assembly of the International Union of Railways (UIC). It was an important step on the way to increasing the company’s global competitiveness and to integrate Russian railways into the world transport system. In the framework of the Union, Russian Railways are responsible for two issues:
1. Development of international transport corridors;
2. The role of the UIC in creating quality and certification standards.
In 2007, the research of UIC projects and programmes was continued so that JSC Russian Railways could later participate in them. Considering the company’s strategic targets, the most reasonable is participation in projects and programmes envisaging development of high-speed transportation, railway stations, and intermodal transportation, especially container transportation.
One of the company’s key international activities is the launch of joint ventures. In 2007, two large joint ventures were established: ZAO EurasiaRailLogistics (co-founded by railways of Russia, Germany, Poland and Byelorussia) and Trans-Eurasia Logistics GmbH (co-founded by OAO RZD, OAO TransContainer, Stinnes JSC, Kombiverkehr Ltd. and Polzug Ltd.).
By Elena Ushkova
reference
In 2007, all the railway affiliates of JSC Russian Railways fulfilled the loading plan, and four of them increased loaded volume by more than 1 million tons. Loading of oil bulk, grain and metal scrap grew significantly and exceeded the figures envisaged in the plan. Loading volume of oil bulk, industrial raw materials and grain exceeded the figures of the previous year by 4.3 million tons, 4.2 million tons and 4 million tons respectively.
The structure of freight transportation was improved: the share of profitable cargoes in the 2nd and 3rd tariff classes grew by 0.5% and 0.2% in the total loading volume. Consequently, the share of cargoes in the 1st tariff class fell by 0.7%.
[~DETAIL_TEXT] => Development According to Strategy
– Mr. Yakunin, in September 2007 the RF Government approved the “Strategy of Railway Transport Development to 2030”. This document is important not only for the railway sector but for the Russian economy as well. What are the basic stages of the strategy’s realisation, what are the targets to be reached?
– The Strategy has already been supported by authorities and businessmen. All events and processes envisaged by the Strategy are aimed at increasing the competitiveness of the railway sector, to form a stable transport system, to improve the safety of the railway infrastructure and to realise the transit potential of Russia efficiently. We plan to reduce joint transport and economic expenses, to make transportation quality and safety meet the requirements of the country’s population, economy and highest world standards, to make railway transport more attractive and create favourable conditions for the business to participate in the sector’s development.
The strategic development of railway transport in the Russian Federation to 2030 will be carried out in two stages.
The first stage is modernisation of railway transport. In 2008–2015 the traffic capacities on the main routes are to increase to the necessary level, the existing infrastructure is to be modernised, the amount of rolling stock is to grow to carry the whole transportation volume required and there are to be no wagons or locomotives whose life-time has expired. Also, new technical requirements for equipment and technologies are to be developed, project and research works are to start, and new railway lines are to be built.
The second stage is the dynamic enlargement of the railway network (2016–2030). It envisages creation of infrastructure conditions to develop new “points” of economic growth in the country, reaching the level of world railway transport technical and technological development and to increase the global competitiveness of Russian railway transport.
The strategy is aimed at fulfilling the innovation scenario of the Russian Federation. It is characterised by concentration of efforts in advanced scientific and technological directions, which will allow us to use national developments and improve the position of Russia in the world market of high-tech production and services. A specific feature of the innovation scenario is changing the GDP structure by increasing the share of high-tech production.
The results of the strategy implementation are liquidation of the limitations on traffic capacities in RF public railway transport and creation of an infrastructure base comparable to the world level to develop new places of economic growth in the country, reaching a modern level of infrastructure development and provision of the proven territories with transport.
By 2030, over 20,000 km of new railway lines are to be put into operation and 7,500 km of tracks are to be electrified.
The rolling stock park is to be renewed by 2030. Over 23,000 locomotives, over 900,000 freight wagons and about 29,500 passenger rail cars are to be purchased.
High-speed railway lines will be constructed to provide proper railway communication, more attractive and comfortable conditions for passengers and improvements to safety. The length of lines, where passenger trains will run at the speed of up to 350 kph, will amount to 1,528 km by 2030. Last year, JSC Russian Railways concluded several contracts with foreign manufacturers for high-speed passenger train supply. I would like to highlight two contracts: with German company Siemens AG for eight high-speed “Velaro Rus” trains, including maintenance for 30 years; and with French company Alstom for supply of high-speed “Pendolino” electric trains to service the Saint Petersburg – Helsinki line.
According to the strategy, by 2030 the freight turnover is to increase to 3,300 tons per kilometre and the passenger turnover – to 231.3 billion passenger kilometres annually.
The volume of international transportation is to grow to 728 million tons per annum.
Due to modernisation of the infrastructure, the speed of passenger trains is to increase to 66 kph and to 72 kph on the main lines by 2030. The speed of containerised cargo transportation is to grow to 1,000 km per day and to 420 km per day for regular transportation.
In 2008–2030, more than 13 trillion roubles are to be invested into railway transport development. The Russian Federation and its subjects are to invest RUR 3.4 trillion, OAO RZD over RUR 5.8 trillion, and the planned share of private investors exceeds RUR 4.4 trillion.
– In 2007, realisation of the third and final stage of the railway transport structural reform continued. What was done and what are the results?
– The work of railways became more stable in 2007, better results in transportation sector were achieved and new opportunities for investment attraction and competition development were created. But first and foremost, it became possible, due to railway transport reform. In May 2007, the Governmental Commission for Industry, Technologies and Transport Development in the Russian Federation approved the target model of the railway transport services market at the third stage of its structural reform. In accordance with the model, by 2010 JSC Russian Railways will be the only long distance freight and passenger carrier by public railway transport. Simultaneously, the process of establishing local suburban carriers will continue. The opportunity and reasonability of separating transport services from infrastructure ones will be evaluated. The target model of the market cannot be reached without radical changes in the normative and legislative base. JSC Russian Railways takes an active part in developing amendments to obsolete acts.
An important element in creating the target market model is measures taken to develop competition in the freight wagon sector. In June 2007, the Board of Directors of JSC Russian Railways made the decision to launch The First Cargo Company. 200,000 wagons will be put into the authorised capital of the new company.
To develop competition in the repair and maintenance of rolling stock, arrangements were made to introduce into the market wagon-repair affiliates of the company, the list of which was approved by JSC Russian Railways Board of Directors.
In 2007, the Board of Directors of JSC Russian Railways made the decision to launch 15 daughter companies and joint ventures. The operation of the launched companies was a success, the joint assets consequently increased and revenue and profit grew.
To attract scaled investments to modernise rolling stock and reach infrastructure targets, JSC Russian Railways decided to sell shares of its daughter companies, first of all, JSC TransContainer and The First Cargo Company. A number of measures were taken to make the daughter companies more attractive for investors. A strategy of development was formed for every subsidiary, arrangements were made to improve the professional skills of the personnel, to strengthen the company’s competitive position, to enter new markets and to renew the production base.
The total volume of JSC Russian Railways revenue from selling the shares and introducing its subsidiaries in the market may amount to RUR 150 billion, which will be a significant contribution to growth in investment potential.
Now document packs for the launch of another 20 daughter companies, as well as logistic enterprises, are being formed. Last year, the dynamics of reaching reform targets was kept high, the quality of transport services increased, the competition segments of the market enlarged and market relations were formed in the railways’ operation supplement sector.
We managed to maintain the reliability of the railways, increase the flow of investment into railway development and stop cross-subsidising of passenger transportation at the expense of freight transportation. The efficiency of exploiting railway opportunities grew and the financial activity of railway transport became more transparent.
Investments: Special Attention to Infrastructure
– On what principles is the investment programme of JSC Russian Railways based? What are its main priorities?
– The company’s investment programme is built on the principles of thorough planning, i.e. as a portfolio of investment projects with approved budgets and terms of realisation.
In forming the investment programme for 2007, JSC Russian Railways took into consideration the need to reach the following priority targets:
• further development of railway network traffic capacity, including lines to border crossings and port approaches;
• launch of fast passenger transportation;
• improvement of the safety and quality of cargo and passenger transportation;
• provision of the necessary volumes of rolling stock purchase and modernisation to fulfill the planned transportation volume.
On the whole, in 2007 the investment programme of JSC Russian Railways, financed at the expense of all the resources, was fulfilled by RUR 259.1 billion, including RUR 257.1 billion of the company’s own means. It is worth noting that the volume of capital investments, fulfilled at the expense of the company’s own funds, grew by 36% year-on-year (in comparable prices).
At the expense of external resources, about RUR 2 billion was spent on the capital investments programme. The attracted and budget means were spent to finance reconstruction of passenger railway stations, prevention measures in the traffic safety programme and expenses incurred connecting industrial tracks to the public network.
There were three basic stages in the investment programme for 2007.
The first stage was “Dedicated Investment Projects” (investment volume RUR 120.1 billion). The stage included projects aimed at development and modernisation of infrastructure on the main routes, providing the growth of the company’s revenues.
The second stage was “Economy Projects” (investment volume RUR 79.9 billion). It included social development projects as well as renewal of the basic assets of JSC Russian Railways affiliates.
The third stage was renewal of rolling stock. The investment volume amounted to RUR 49.7 billion. And by means of using a leasing mechanism, the rolling stock was renewed for the sum of RUR 29 billion.
– What has been done to develop container transportation?
– Against the background of the summit between Russia and the EU, JSC TransContainer and VR Ltd (Finnish Railways) concluded a contract on a joint venture – ContainerTransScandinavia – launched on a parity basis. The authorised capital of the new company is EUR 150,000. The marketing policy of ContainerTransScandinavia is based on the increase of container volumes transported by railway from Finland to Russia during the past five years. It must be done by redirecting cargo flows from motor transport. The potential volume is 20,000 TEU annually.
Trilateral cooperation between JSC Russian Railways, Deutsche Bahn AG and the Chinese Ministry of Railways is continuing. At meetings held in 2007, the trilaterial working group presented an analysis of the current market for container transportation between Europe and China; the prospects of the market development were discussed; the comparative analysis of the cost of transportation and the freight delivery terms by rail and sea on the route China – Russia – Germany was made. Due to the active positioning of JSC Russian Railways, the interest of Japanese cargo owners in transportation along the Transsiberian railway has been rekindled. Since the start of 2007, the volume of containerised Japanese goods transportation via the Russian railway network grew by 50%. Testing transportation of car components produced by Toyota via the Transsib was also held.
– Railway transport is very popular in Russia for transportation inside the country. What innovations in the passenger servicing sector were put into operation last year?
– On July 1, gender differentiation of compartments was implemented in long-distance trains. The new service allows passengers to choose the gender of people travelling in the same compartment, which makes the travel more comfortable. But the implementation of the new service does not mean that there will be no mixed compartments – couples or families can still travel in one compartment.
The equipment in long-distance trains is being actively modernised. A number of high-comfort trains are equipped with modern Internet compartments – special compartments with board and computer games, and soft toys for children.
In all JSC Russian Railways ticket offices that are equipped with ASU Express terminals, a new service is provided: registration of a ticket paid by bank cards via JSC Russian Railways corporate website. It is planned to translate the interface of online order into English and organise ticket delivery, if a passenger asks for it as he pays for the order via the website. Over 114,000 tickets were bought with the use of the service in May to December.
Mutually Beneficial Cooperation: Partner from China Has Good Prospects
– Speaking about container transportation you mentioned projects carried out by the company in cooperation with transporters from other states. Thus, the activities of JSC Russian Railways prove that the company has strengthened its position on the international transport market. What other measures are being taken to integrate Russian railways into the systems of international cargo and passenger transportation?
– We think that the most important measures are firstly coordination of actions with administrations of the leading railways in the neighbouring states in the Eurasian transport market by creating working groups and joint ventures; secondly, interaction with foreign companies in the sector of technological and scientific and technical cooperation; thirdly, operating in foreign infrastructure markets.
In the Railway Transport Council of the CIS Member-States, JSC Russian Railways has done a lot to solve problems such as improvement of settlement payments, realisation of joint projects in the sectors of logistics and infrastructure modernisation.
In spring, JSC Russian Railways and SNCF (the French National Railway Service) signed a Memorandum of Cooperation to share their experience in reforming railway transport, launching fast and high-speed transportation, exchange of advanced technologies for passenger and cargo transportation, and the launch of a direct passenger service between Paris and Moscow.
At the same time, JSC Russian Railways and the Chinese Ministry of Railways concluded an agreement on strengthening cooperation in the crude oil transportation sector. Their share made 10% of the total foreign trade cargo transportation volume carried via Russian railway network between the RF and China.
An important aspect of the company’s strengthening of its international position is realisation of infrastructure projects.
Thus, JSC Russian Railways and Austrian Federal Railways signed a bilateral memorandum of mutual understanding for the project of a possible extension of a railway with a 1,520 mm-wide gauge from Kosice (Slovakia) to Bratislava and Vienna. The new project envisages that on the line Kosice – Bratislava – Vienna, where the acting railway is with the gauge of 1,435 mm width (European standard), a new railway with 1,520 mm-wide gauge will be constructed (a characteristic feature of the CIS member-states’ railways). The total length of the line to Vienna will amount to 575 km. Experts say that a railway with a gauge of the same standard will allow transit freight flow from Russia to Europe to increase by 60%.This will also help transport cargoes from the Asian and Pacific region to Europe by railway. The preliminary cost of the project is USD 1.2 billion.
The project of a new railway line Kazvin – Resht – Astara construction is being developed. The line is very important for increasing transportation along the international “North – South” transport corridor.
In Sassnitz (Germany), JSC Russian Railways and Railion Deutschland AG signed basic documents regulating freight transportation between Russia and Germany on the railway-ferry line Baltiysk – Sassnitz – Mukran. Thus, the first stage of railway-ferry communication between Russian and German ports had been completed.
In June, JSC Russian Railways became a full member of the European Regional Assembly of the International Union of Railways (UIC). It was an important step on the way to increasing the company’s global competitiveness and to integrate Russian railways into the world transport system. In the framework of the Union, Russian Railways are responsible for two issues:
1. Development of international transport corridors;
2. The role of the UIC in creating quality and certification standards.
In 2007, the research of UIC projects and programmes was continued so that JSC Russian Railways could later participate in them. Considering the company’s strategic targets, the most reasonable is participation in projects and programmes envisaging development of high-speed transportation, railway stations, and intermodal transportation, especially container transportation.
One of the company’s key international activities is the launch of joint ventures. In 2007, two large joint ventures were established: ZAO EurasiaRailLogistics (co-founded by railways of Russia, Germany, Poland and Byelorussia) and Trans-Eurasia Logistics GmbH (co-founded by OAO RZD, OAO TransContainer, Stinnes JSC, Kombiverkehr Ltd. and Polzug Ltd.).
By Elena Ushkova
reference
In 2007, all the railway affiliates of JSC Russian Railways fulfilled the loading plan, and four of them increased loaded volume by more than 1 million tons. Loading of oil bulk, grain and metal scrap grew significantly and exceeded the figures envisaged in the plan. Loading volume of oil bulk, industrial raw materials and grain exceeded the figures of the previous year by 4.3 million tons, 4.2 million tons and 4 million tons respectively.
The structure of freight transportation was improved: the share of profitable cargoes in the 2nd and 3rd tariff classes grew by 0.5% and 0.2% in the total loading volume. Consequently, the share of cargoes in the 1st tariff class fell by 0.7%.
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[DETAIL_TEXT] => Development According to Strategy
– Mr. Yakunin, in September 2007 the RF Government approved the “Strategy of Railway Transport Development to 2030”. This document is important not only for the railway sector but for the Russian economy as well. What are the basic stages of the strategy’s realisation, what are the targets to be reached?
– The Strategy has already been supported by authorities and businessmen. All events and processes envisaged by the Strategy are aimed at increasing the competitiveness of the railway sector, to form a stable transport system, to improve the safety of the railway infrastructure and to realise the transit potential of Russia efficiently. We plan to reduce joint transport and economic expenses, to make transportation quality and safety meet the requirements of the country’s population, economy and highest world standards, to make railway transport more attractive and create favourable conditions for the business to participate in the sector’s development.
The strategic development of railway transport in the Russian Federation to 2030 will be carried out in two stages.
The first stage is modernisation of railway transport. In 2008–2015 the traffic capacities on the main routes are to increase to the necessary level, the existing infrastructure is to be modernised, the amount of rolling stock is to grow to carry the whole transportation volume required and there are to be no wagons or locomotives whose life-time has expired. Also, new technical requirements for equipment and technologies are to be developed, project and research works are to start, and new railway lines are to be built.
The second stage is the dynamic enlargement of the railway network (2016–2030). It envisages creation of infrastructure conditions to develop new “points” of economic growth in the country, reaching the level of world railway transport technical and technological development and to increase the global competitiveness of Russian railway transport.
The strategy is aimed at fulfilling the innovation scenario of the Russian Federation. It is characterised by concentration of efforts in advanced scientific and technological directions, which will allow us to use national developments and improve the position of Russia in the world market of high-tech production and services. A specific feature of the innovation scenario is changing the GDP structure by increasing the share of high-tech production.
The results of the strategy implementation are liquidation of the limitations on traffic capacities in RF public railway transport and creation of an infrastructure base comparable to the world level to develop new places of economic growth in the country, reaching a modern level of infrastructure development and provision of the proven territories with transport.
By 2030, over 20,000 km of new railway lines are to be put into operation and 7,500 km of tracks are to be electrified.
The rolling stock park is to be renewed by 2030. Over 23,000 locomotives, over 900,000 freight wagons and about 29,500 passenger rail cars are to be purchased.
High-speed railway lines will be constructed to provide proper railway communication, more attractive and comfortable conditions for passengers and improvements to safety. The length of lines, where passenger trains will run at the speed of up to 350 kph, will amount to 1,528 km by 2030. Last year, JSC Russian Railways concluded several contracts with foreign manufacturers for high-speed passenger train supply. I would like to highlight two contracts: with German company Siemens AG for eight high-speed “Velaro Rus” trains, including maintenance for 30 years; and with French company Alstom for supply of high-speed “Pendolino” electric trains to service the Saint Petersburg – Helsinki line.
According to the strategy, by 2030 the freight turnover is to increase to 3,300 tons per kilometre and the passenger turnover – to 231.3 billion passenger kilometres annually.
The volume of international transportation is to grow to 728 million tons per annum.
Due to modernisation of the infrastructure, the speed of passenger trains is to increase to 66 kph and to 72 kph on the main lines by 2030. The speed of containerised cargo transportation is to grow to 1,000 km per day and to 420 km per day for regular transportation.
In 2008–2030, more than 13 trillion roubles are to be invested into railway transport development. The Russian Federation and its subjects are to invest RUR 3.4 trillion, OAO RZD over RUR 5.8 trillion, and the planned share of private investors exceeds RUR 4.4 trillion.
– In 2007, realisation of the third and final stage of the railway transport structural reform continued. What was done and what are the results?
– The work of railways became more stable in 2007, better results in transportation sector were achieved and new opportunities for investment attraction and competition development were created. But first and foremost, it became possible, due to railway transport reform. In May 2007, the Governmental Commission for Industry, Technologies and Transport Development in the Russian Federation approved the target model of the railway transport services market at the third stage of its structural reform. In accordance with the model, by 2010 JSC Russian Railways will be the only long distance freight and passenger carrier by public railway transport. Simultaneously, the process of establishing local suburban carriers will continue. The opportunity and reasonability of separating transport services from infrastructure ones will be evaluated. The target model of the market cannot be reached without radical changes in the normative and legislative base. JSC Russian Railways takes an active part in developing amendments to obsolete acts.
An important element in creating the target market model is measures taken to develop competition in the freight wagon sector. In June 2007, the Board of Directors of JSC Russian Railways made the decision to launch The First Cargo Company. 200,000 wagons will be put into the authorised capital of the new company.
To develop competition in the repair and maintenance of rolling stock, arrangements were made to introduce into the market wagon-repair affiliates of the company, the list of which was approved by JSC Russian Railways Board of Directors.
In 2007, the Board of Directors of JSC Russian Railways made the decision to launch 15 daughter companies and joint ventures. The operation of the launched companies was a success, the joint assets consequently increased and revenue and profit grew.
To attract scaled investments to modernise rolling stock and reach infrastructure targets, JSC Russian Railways decided to sell shares of its daughter companies, first of all, JSC TransContainer and The First Cargo Company. A number of measures were taken to make the daughter companies more attractive for investors. A strategy of development was formed for every subsidiary, arrangements were made to improve the professional skills of the personnel, to strengthen the company’s competitive position, to enter new markets and to renew the production base.
The total volume of JSC Russian Railways revenue from selling the shares and introducing its subsidiaries in the market may amount to RUR 150 billion, which will be a significant contribution to growth in investment potential.
Now document packs for the launch of another 20 daughter companies, as well as logistic enterprises, are being formed. Last year, the dynamics of reaching reform targets was kept high, the quality of transport services increased, the competition segments of the market enlarged and market relations were formed in the railways’ operation supplement sector.
We managed to maintain the reliability of the railways, increase the flow of investment into railway development and stop cross-subsidising of passenger transportation at the expense of freight transportation. The efficiency of exploiting railway opportunities grew and the financial activity of railway transport became more transparent.
Investments: Special Attention to Infrastructure
– On what principles is the investment programme of JSC Russian Railways based? What are its main priorities?
– The company’s investment programme is built on the principles of thorough planning, i.e. as a portfolio of investment projects with approved budgets and terms of realisation.
In forming the investment programme for 2007, JSC Russian Railways took into consideration the need to reach the following priority targets:
• further development of railway network traffic capacity, including lines to border crossings and port approaches;
• launch of fast passenger transportation;
• improvement of the safety and quality of cargo and passenger transportation;
• provision of the necessary volumes of rolling stock purchase and modernisation to fulfill the planned transportation volume.
On the whole, in 2007 the investment programme of JSC Russian Railways, financed at the expense of all the resources, was fulfilled by RUR 259.1 billion, including RUR 257.1 billion of the company’s own means. It is worth noting that the volume of capital investments, fulfilled at the expense of the company’s own funds, grew by 36% year-on-year (in comparable prices).
At the expense of external resources, about RUR 2 billion was spent on the capital investments programme. The attracted and budget means were spent to finance reconstruction of passenger railway stations, prevention measures in the traffic safety programme and expenses incurred connecting industrial tracks to the public network.
There were three basic stages in the investment programme for 2007.
The first stage was “Dedicated Investment Projects” (investment volume RUR 120.1 billion). The stage included projects aimed at development and modernisation of infrastructure on the main routes, providing the growth of the company’s revenues.
The second stage was “Economy Projects” (investment volume RUR 79.9 billion). It included social development projects as well as renewal of the basic assets of JSC Russian Railways affiliates.
The third stage was renewal of rolling stock. The investment volume amounted to RUR 49.7 billion. And by means of using a leasing mechanism, the rolling stock was renewed for the sum of RUR 29 billion.
– What has been done to develop container transportation?
– Against the background of the summit between Russia and the EU, JSC TransContainer and VR Ltd (Finnish Railways) concluded a contract on a joint venture – ContainerTransScandinavia – launched on a parity basis. The authorised capital of the new company is EUR 150,000. The marketing policy of ContainerTransScandinavia is based on the increase of container volumes transported by railway from Finland to Russia during the past five years. It must be done by redirecting cargo flows from motor transport. The potential volume is 20,000 TEU annually.
Trilateral cooperation between JSC Russian Railways, Deutsche Bahn AG and the Chinese Ministry of Railways is continuing. At meetings held in 2007, the trilaterial working group presented an analysis of the current market for container transportation between Europe and China; the prospects of the market development were discussed; the comparative analysis of the cost of transportation and the freight delivery terms by rail and sea on the route China – Russia – Germany was made. Due to the active positioning of JSC Russian Railways, the interest of Japanese cargo owners in transportation along the Transsiberian railway has been rekindled. Since the start of 2007, the volume of containerised Japanese goods transportation via the Russian railway network grew by 50%. Testing transportation of car components produced by Toyota via the Transsib was also held.
– Railway transport is very popular in Russia for transportation inside the country. What innovations in the passenger servicing sector were put into operation last year?
– On July 1, gender differentiation of compartments was implemented in long-distance trains. The new service allows passengers to choose the gender of people travelling in the same compartment, which makes the travel more comfortable. But the implementation of the new service does not mean that there will be no mixed compartments – couples or families can still travel in one compartment.
The equipment in long-distance trains is being actively modernised. A number of high-comfort trains are equipped with modern Internet compartments – special compartments with board and computer games, and soft toys for children.
In all JSC Russian Railways ticket offices that are equipped with ASU Express terminals, a new service is provided: registration of a ticket paid by bank cards via JSC Russian Railways corporate website. It is planned to translate the interface of online order into English and organise ticket delivery, if a passenger asks for it as he pays for the order via the website. Over 114,000 tickets were bought with the use of the service in May to December.
Mutually Beneficial Cooperation: Partner from China Has Good Prospects
– Speaking about container transportation you mentioned projects carried out by the company in cooperation with transporters from other states. Thus, the activities of JSC Russian Railways prove that the company has strengthened its position on the international transport market. What other measures are being taken to integrate Russian railways into the systems of international cargo and passenger transportation?
– We think that the most important measures are firstly coordination of actions with administrations of the leading railways in the neighbouring states in the Eurasian transport market by creating working groups and joint ventures; secondly, interaction with foreign companies in the sector of technological and scientific and technical cooperation; thirdly, operating in foreign infrastructure markets.
In the Railway Transport Council of the CIS Member-States, JSC Russian Railways has done a lot to solve problems such as improvement of settlement payments, realisation of joint projects in the sectors of logistics and infrastructure modernisation.
In spring, JSC Russian Railways and SNCF (the French National Railway Service) signed a Memorandum of Cooperation to share their experience in reforming railway transport, launching fast and high-speed transportation, exchange of advanced technologies for passenger and cargo transportation, and the launch of a direct passenger service between Paris and Moscow.
At the same time, JSC Russian Railways and the Chinese Ministry of Railways concluded an agreement on strengthening cooperation in the crude oil transportation sector. Their share made 10% of the total foreign trade cargo transportation volume carried via Russian railway network between the RF and China.
An important aspect of the company’s strengthening of its international position is realisation of infrastructure projects.
Thus, JSC Russian Railways and Austrian Federal Railways signed a bilateral memorandum of mutual understanding for the project of a possible extension of a railway with a 1,520 mm-wide gauge from Kosice (Slovakia) to Bratislava and Vienna. The new project envisages that on the line Kosice – Bratislava – Vienna, where the acting railway is with the gauge of 1,435 mm width (European standard), a new railway with 1,520 mm-wide gauge will be constructed (a characteristic feature of the CIS member-states’ railways). The total length of the line to Vienna will amount to 575 km. Experts say that a railway with a gauge of the same standard will allow transit freight flow from Russia to Europe to increase by 60%.This will also help transport cargoes from the Asian and Pacific region to Europe by railway. The preliminary cost of the project is USD 1.2 billion.
The project of a new railway line Kazvin – Resht – Astara construction is being developed. The line is very important for increasing transportation along the international “North – South” transport corridor.
In Sassnitz (Germany), JSC Russian Railways and Railion Deutschland AG signed basic documents regulating freight transportation between Russia and Germany on the railway-ferry line Baltiysk – Sassnitz – Mukran. Thus, the first stage of railway-ferry communication between Russian and German ports had been completed.
In June, JSC Russian Railways became a full member of the European Regional Assembly of the International Union of Railways (UIC). It was an important step on the way to increasing the company’s global competitiveness and to integrate Russian railways into the world transport system. In the framework of the Union, Russian Railways are responsible for two issues:
1. Development of international transport corridors;
2. The role of the UIC in creating quality and certification standards.
In 2007, the research of UIC projects and programmes was continued so that JSC Russian Railways could later participate in them. Considering the company’s strategic targets, the most reasonable is participation in projects and programmes envisaging development of high-speed transportation, railway stations, and intermodal transportation, especially container transportation.
One of the company’s key international activities is the launch of joint ventures. In 2007, two large joint ventures were established: ZAO EurasiaRailLogistics (co-founded by railways of Russia, Germany, Poland and Byelorussia) and Trans-Eurasia Logistics GmbH (co-founded by OAO RZD, OAO TransContainer, Stinnes JSC, Kombiverkehr Ltd. and Polzug Ltd.).
By Elena Ushkova
reference
In 2007, all the railway affiliates of JSC Russian Railways fulfilled the loading plan, and four of them increased loaded volume by more than 1 million tons. Loading of oil bulk, grain and metal scrap grew significantly and exceeded the figures envisaged in the plan. Loading volume of oil bulk, industrial raw materials and grain exceeded the figures of the previous year by 4.3 million tons, 4.2 million tons and 4 million tons respectively.
The structure of freight transportation was improved: the share of profitable cargoes in the 2nd and 3rd tariff classes grew by 0.5% and 0.2% in the total loading volume. Consequently, the share of cargoes in the 1st tariff class fell by 0.7%.
[~DETAIL_TEXT] => Development According to Strategy
– Mr. Yakunin, in September 2007 the RF Government approved the “Strategy of Railway Transport Development to 2030”. This document is important not only for the railway sector but for the Russian economy as well. What are the basic stages of the strategy’s realisation, what are the targets to be reached?
– The Strategy has already been supported by authorities and businessmen. All events and processes envisaged by the Strategy are aimed at increasing the competitiveness of the railway sector, to form a stable transport system, to improve the safety of the railway infrastructure and to realise the transit potential of Russia efficiently. We plan to reduce joint transport and economic expenses, to make transportation quality and safety meet the requirements of the country’s population, economy and highest world standards, to make railway transport more attractive and create favourable conditions for the business to participate in the sector’s development.
The strategic development of railway transport in the Russian Federation to 2030 will be carried out in two stages.
The first stage is modernisation of railway transport. In 2008–2015 the traffic capacities on the main routes are to increase to the necessary level, the existing infrastructure is to be modernised, the amount of rolling stock is to grow to carry the whole transportation volume required and there are to be no wagons or locomotives whose life-time has expired. Also, new technical requirements for equipment and technologies are to be developed, project and research works are to start, and new railway lines are to be built.
The second stage is the dynamic enlargement of the railway network (2016–2030). It envisages creation of infrastructure conditions to develop new “points” of economic growth in the country, reaching the level of world railway transport technical and technological development and to increase the global competitiveness of Russian railway transport.
The strategy is aimed at fulfilling the innovation scenario of the Russian Federation. It is characterised by concentration of efforts in advanced scientific and technological directions, which will allow us to use national developments and improve the position of Russia in the world market of high-tech production and services. A specific feature of the innovation scenario is changing the GDP structure by increasing the share of high-tech production.
The results of the strategy implementation are liquidation of the limitations on traffic capacities in RF public railway transport and creation of an infrastructure base comparable to the world level to develop new places of economic growth in the country, reaching a modern level of infrastructure development and provision of the proven territories with transport.
By 2030, over 20,000 km of new railway lines are to be put into operation and 7,500 km of tracks are to be electrified.
The rolling stock park is to be renewed by 2030. Over 23,000 locomotives, over 900,000 freight wagons and about 29,500 passenger rail cars are to be purchased.
High-speed railway lines will be constructed to provide proper railway communication, more attractive and comfortable conditions for passengers and improvements to safety. The length of lines, where passenger trains will run at the speed of up to 350 kph, will amount to 1,528 km by 2030. Last year, JSC Russian Railways concluded several contracts with foreign manufacturers for high-speed passenger train supply. I would like to highlight two contracts: with German company Siemens AG for eight high-speed “Velaro Rus” trains, including maintenance for 30 years; and with French company Alstom for supply of high-speed “Pendolino” electric trains to service the Saint Petersburg – Helsinki line.
According to the strategy, by 2030 the freight turnover is to increase to 3,300 tons per kilometre and the passenger turnover – to 231.3 billion passenger kilometres annually.
The volume of international transportation is to grow to 728 million tons per annum.
Due to modernisation of the infrastructure, the speed of passenger trains is to increase to 66 kph and to 72 kph on the main lines by 2030. The speed of containerised cargo transportation is to grow to 1,000 km per day and to 420 km per day for regular transportation.
In 2008–2030, more than 13 trillion roubles are to be invested into railway transport development. The Russian Federation and its subjects are to invest RUR 3.4 trillion, OAO RZD over RUR 5.8 trillion, and the planned share of private investors exceeds RUR 4.4 trillion.
– In 2007, realisation of the third and final stage of the railway transport structural reform continued. What was done and what are the results?
– The work of railways became more stable in 2007, better results in transportation sector were achieved and new opportunities for investment attraction and competition development were created. But first and foremost, it became possible, due to railway transport reform. In May 2007, the Governmental Commission for Industry, Technologies and Transport Development in the Russian Federation approved the target model of the railway transport services market at the third stage of its structural reform. In accordance with the model, by 2010 JSC Russian Railways will be the only long distance freight and passenger carrier by public railway transport. Simultaneously, the process of establishing local suburban carriers will continue. The opportunity and reasonability of separating transport services from infrastructure ones will be evaluated. The target model of the market cannot be reached without radical changes in the normative and legislative base. JSC Russian Railways takes an active part in developing amendments to obsolete acts.
An important element in creating the target market model is measures taken to develop competition in the freight wagon sector. In June 2007, the Board of Directors of JSC Russian Railways made the decision to launch The First Cargo Company. 200,000 wagons will be put into the authorised capital of the new company.
To develop competition in the repair and maintenance of rolling stock, arrangements were made to introduce into the market wagon-repair affiliates of the company, the list of which was approved by JSC Russian Railways Board of Directors.
In 2007, the Board of Directors of JSC Russian Railways made the decision to launch 15 daughter companies and joint ventures. The operation of the launched companies was a success, the joint assets consequently increased and revenue and profit grew.
To attract scaled investments to modernise rolling stock and reach infrastructure targets, JSC Russian Railways decided to sell shares of its daughter companies, first of all, JSC TransContainer and The First Cargo Company. A number of measures were taken to make the daughter companies more attractive for investors. A strategy of development was formed for every subsidiary, arrangements were made to improve the professional skills of the personnel, to strengthen the company’s competitive position, to enter new markets and to renew the production base.
The total volume of JSC Russian Railways revenue from selling the shares and introducing its subsidiaries in the market may amount to RUR 150 billion, which will be a significant contribution to growth in investment potential.
Now document packs for the launch of another 20 daughter companies, as well as logistic enterprises, are being formed. Last year, the dynamics of reaching reform targets was kept high, the quality of transport services increased, the competition segments of the market enlarged and market relations were formed in the railways’ operation supplement sector.
We managed to maintain the reliability of the railways, increase the flow of investment into railway development and stop cross-subsidising of passenger transportation at the expense of freight transportation. The efficiency of exploiting railway opportunities grew and the financial activity of railway transport became more transparent.
Investments: Special Attention to Infrastructure
– On what principles is the investment programme of JSC Russian Railways based? What are its main priorities?
– The company’s investment programme is built on the principles of thorough planning, i.e. as a portfolio of investment projects with approved budgets and terms of realisation.
In forming the investment programme for 2007, JSC Russian Railways took into consideration the need to reach the following priority targets:
• further development of railway network traffic capacity, including lines to border crossings and port approaches;
• launch of fast passenger transportation;
• improvement of the safety and quality of cargo and passenger transportation;
• provision of the necessary volumes of rolling stock purchase and modernisation to fulfill the planned transportation volume.
On the whole, in 2007 the investment programme of JSC Russian Railways, financed at the expense of all the resources, was fulfilled by RUR 259.1 billion, including RUR 257.1 billion of the company’s own means. It is worth noting that the volume of capital investments, fulfilled at the expense of the company’s own funds, grew by 36% year-on-year (in comparable prices).
At the expense of external resources, about RUR 2 billion was spent on the capital investments programme. The attracted and budget means were spent to finance reconstruction of passenger railway stations, prevention measures in the traffic safety programme and expenses incurred connecting industrial tracks to the public network.
There were three basic stages in the investment programme for 2007.
The first stage was “Dedicated Investment Projects” (investment volume RUR 120.1 billion). The stage included projects aimed at development and modernisation of infrastructure on the main routes, providing the growth of the company’s revenues.
The second stage was “Economy Projects” (investment volume RUR 79.9 billion). It included social development projects as well as renewal of the basic assets of JSC Russian Railways affiliates.
The third stage was renewal of rolling stock. The investment volume amounted to RUR 49.7 billion. And by means of using a leasing mechanism, the rolling stock was renewed for the sum of RUR 29 billion.
– What has been done to develop container transportation?
– Against the background of the summit between Russia and the EU, JSC TransContainer and VR Ltd (Finnish Railways) concluded a contract on a joint venture – ContainerTransScandinavia – launched on a parity basis. The authorised capital of the new company is EUR 150,000. The marketing policy of ContainerTransScandinavia is based on the increase of container volumes transported by railway from Finland to Russia during the past five years. It must be done by redirecting cargo flows from motor transport. The potential volume is 20,000 TEU annually.
Trilateral cooperation between JSC Russian Railways, Deutsche Bahn AG and the Chinese Ministry of Railways is continuing. At meetings held in 2007, the trilaterial working group presented an analysis of the current market for container transportation between Europe and China; the prospects of the market development were discussed; the comparative analysis of the cost of transportation and the freight delivery terms by rail and sea on the route China – Russia – Germany was made. Due to the active positioning of JSC Russian Railways, the interest of Japanese cargo owners in transportation along the Transsiberian railway has been rekindled. Since the start of 2007, the volume of containerised Japanese goods transportation via the Russian railway network grew by 50%. Testing transportation of car components produced by Toyota via the Transsib was also held.
– Railway transport is very popular in Russia for transportation inside the country. What innovations in the passenger servicing sector were put into operation last year?
– On July 1, gender differentiation of compartments was implemented in long-distance trains. The new service allows passengers to choose the gender of people travelling in the same compartment, which makes the travel more comfortable. But the implementation of the new service does not mean that there will be no mixed compartments – couples or families can still travel in one compartment.
The equipment in long-distance trains is being actively modernised. A number of high-comfort trains are equipped with modern Internet compartments – special compartments with board and computer games, and soft toys for children.
In all JSC Russian Railways ticket offices that are equipped with ASU Express terminals, a new service is provided: registration of a ticket paid by bank cards via JSC Russian Railways corporate website. It is planned to translate the interface of online order into English and organise ticket delivery, if a passenger asks for it as he pays for the order via the website. Over 114,000 tickets were bought with the use of the service in May to December.
Mutually Beneficial Cooperation: Partner from China Has Good Prospects
– Speaking about container transportation you mentioned projects carried out by the company in cooperation with transporters from other states. Thus, the activities of JSC Russian Railways prove that the company has strengthened its position on the international transport market. What other measures are being taken to integrate Russian railways into the systems of international cargo and passenger transportation?
– We think that the most important measures are firstly coordination of actions with administrations of the leading railways in the neighbouring states in the Eurasian transport market by creating working groups and joint ventures; secondly, interaction with foreign companies in the sector of technological and scientific and technical cooperation; thirdly, operating in foreign infrastructure markets.
In the Railway Transport Council of the CIS Member-States, JSC Russian Railways has done a lot to solve problems such as improvement of settlement payments, realisation of joint projects in the sectors of logistics and infrastructure modernisation.
In spring, JSC Russian Railways and SNCF (the French National Railway Service) signed a Memorandum of Cooperation to share their experience in reforming railway transport, launching fast and high-speed transportation, exchange of advanced technologies for passenger and cargo transportation, and the launch of a direct passenger service between Paris and Moscow.
At the same time, JSC Russian Railways and the Chinese Ministry of Railways concluded an agreement on strengthening cooperation in the crude oil transportation sector. Their share made 10% of the total foreign trade cargo transportation volume carried via Russian railway network between the RF and China.
An important aspect of the company’s strengthening of its international position is realisation of infrastructure projects.
Thus, JSC Russian Railways and Austrian Federal Railways signed a bilateral memorandum of mutual understanding for the project of a possible extension of a railway with a 1,520 mm-wide gauge from Kosice (Slovakia) to Bratislava and Vienna. The new project envisages that on the line Kosice – Bratislava – Vienna, where the acting railway is with the gauge of 1,435 mm width (European standard), a new railway with 1,520 mm-wide gauge will be constructed (a characteristic feature of the CIS member-states’ railways). The total length of the line to Vienna will amount to 575 km. Experts say that a railway with a gauge of the same standard will allow transit freight flow from Russia to Europe to increase by 60%.This will also help transport cargoes from the Asian and Pacific region to Europe by railway. The preliminary cost of the project is USD 1.2 billion.
The project of a new railway line Kazvin – Resht – Astara construction is being developed. The line is very important for increasing transportation along the international “North – South” transport corridor.
In Sassnitz (Germany), JSC Russian Railways and Railion Deutschland AG signed basic documents regulating freight transportation between Russia and Germany on the railway-ferry line Baltiysk – Sassnitz – Mukran. Thus, the first stage of railway-ferry communication between Russian and German ports had been completed.
In June, JSC Russian Railways became a full member of the European Regional Assembly of the International Union of Railways (UIC). It was an important step on the way to increasing the company’s global competitiveness and to integrate Russian railways into the world transport system. In the framework of the Union, Russian Railways are responsible for two issues:
1. Development of international transport corridors;
2. The role of the UIC in creating quality and certification standards.
In 2007, the research of UIC projects and programmes was continued so that JSC Russian Railways could later participate in them. Considering the company’s strategic targets, the most reasonable is participation in projects and programmes envisaging development of high-speed transportation, railway stations, and intermodal transportation, especially container transportation.
One of the company’s key international activities is the launch of joint ventures. In 2007, two large joint ventures were established: ZAO EurasiaRailLogistics (co-founded by railways of Russia, Germany, Poland and Byelorussia) and Trans-Eurasia Logistics GmbH (co-founded by OAO RZD, OAO TransContainer, Stinnes JSC, Kombiverkehr Ltd. and Polzug Ltd.).
By Elena Ushkova
reference
In 2007, all the railway affiliates of JSC Russian Railways fulfilled the loading plan, and four of them increased loaded volume by more than 1 million tons. Loading of oil bulk, grain and metal scrap grew significantly and exceeded the figures envisaged in the plan. Loading volume of oil bulk, industrial raw materials and grain exceeded the figures of the previous year by 4.3 million tons, 4.2 million tons and 4 million tons respectively.
The structure of freight transportation was improved: the share of profitable cargoes in the 2nd and 3rd tariff classes grew by 0.5% and 0.2% in the total loading volume. Consequently, the share of cargoes in the 1st tariff class fell by 0.7%.
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[PREVIEW_TEXT] => President of JSC Russian Railways Vladimir Yakunin told The RZD-Partner International about the company’s results in 2007 and its strategic development plans.
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