How a business can deliver goods to Russia – problems and solutions

Areas of effort that are important in the context of the issue relate to payment and delivery of goods; individual solutions that are offered by various companies both in the Russian Federation and abroad, difficulties with customs clearance in the Russian Federation and the choice of a reliable partner.

1) The main problems of payment and delivery.

Participants in foreign trade activities in the Russian Federation face various difficulties and obstacles when importing from neighboring countries. The main part of them is related to the implementation of sanctions policy against the Russian Federation. Most often it is the inability to buy and deliver goods due to:

– reluctance of foreign suppliers to work with the Russian Federation;

– inability to make payments due to the disconnection of the Russian Federation from SWIFT and the closure of international transactions;

– the supplier’s fear of falling under secondary sanctions from the state;

– complexity of supply chains and associated risks.

From practice: many suppliers are ready to continue working with the Russian Federation, but they are limited by their own states and imposed restrictions.

2) Individual solutions offered by various companies both in the Russian Federation and abroad.

1. The countries of the European Union are one of the most problematic, but also the most interesting areas for companies from the Russian Federation, since traditionally all advanced technologies and materials (not previously produced in the Russian Federation) were purchased there. Almost all production chains were tied in this direction also due to the presence of a large number of foreign holdings and companies that pulled accompanying small businesses with them. Their quality is trusted.

In order to solve all the problems I mentioned above, various solutions have been implemented.

– At the first stage, when the sanctions restrictions were not so extensive, it was enough to find a company in Armenia or Kazakhstan and, having concluded an agreement with it, pay the required amount in rubles with a small commission in order for it to perform intermediary procurement services. After that, the cargo went to these countries, but, passing the border of neighboring states without customs clearance or paying taxes in them, it was sent further to the Russian Federation. Subsequently, representatives of EU countries raised a reasonable question about the discrepancy between the quantity of purchased products and the number of production facilities that exist in these countries. And a significant increase in the volume of monetary transactions from these countries aroused suspicion.

Also, do not forget about the emergence of a large number of scammers and unscrupulous partners in this area. Many fly-by-night companies were created only in order to collect more purchase requests and subsequently went bankrupt immediately after receiving payments from customers from the Russian Federation. Some companies, hoping to really enter this market, overestimated their strengths and capabilities, which resulted in the impossibility of fulfilling their obligations and the same loss of money/products for Russian customers.

– The second stage in the market began to provide intermediary services to those companies that, for one reason or another, had their own business abroad. They purchased goods, prepared documents and sent them via various routes to the Russian Federation. After banks began to close monetary transactions that were in some way connected with the Russian Federation, many of these companies also left the market. Only those who had money turnover in the EU that had no relation to Russia remained, which allowed them to carry out transactions and then close them by netting them. Due to the large number of risks, the cost of intermediary services of such companies significantly exceeded the minimum that was previously laid down. At the same time, such companies provide more guarantees, since most of them have their own business in Russia and assets with which they can cover risks. They are more trusted.

– Logistics has become multimodal. Most often, goods restricted for sale are imported through third countries using various types of transport and using the services of customs warehouses to minimize risks and payments.

2. Türkiye. The state was one of the main markets both for the intermediary purchase of goods and for the purchase of certain types of goods produced in the country. In the early stages, Türkiye acted as a hub in international mediation deals. Subsequently, with the tightening of sanctions policies and policies within the state, the number of such transactions decreased noticeably, including due to the inability to directly transfer money from the Russian Federation and the reluctance of Turkish companies to sell goods not cleared by customs in Turkey. For the buyer, this becomes economically unprofitable, since he buys the goods with an additional markup, including tax payments and logistics costs (in the case of “non-Turkish” origin of the goods).

3. China has become the main market, which is gradually replacing all others and restructuring all production and logistics chains to itself. Including in terms of components and industrial equipment, and not just raw materials and consumer goods.

In recent months, there have also been certain difficulties in this area with the transfer/payment of funds and working with banks, even taking into account payment for goods through third countries. However, the prospect of work in this direction opens up more opportunities due to the greater loyalty of this state and the mentality of Chinese representatives.

If we consider logistics from China, it is easier to understand and does not have significant restrictions.

3) Difficulties with customs clearance in the Russian Federation.

They are related to the fact that, no matter how complex the deliveries are and how important they are for the state and the consumer, the customs authorities have their own instructions and do not intend to deviate from them. Some customs posts simply do not want to accept the method of delivering goods via parallel import, which is offered by one or another foreign trade participant. Even if he follows all the expected procedures. Everything new in this direction carries additional risk, which the structure does not want to take on. Let’s hope that over time we will begin to work in parallel with them at all stages, observing all procedures established by the state.

4. To successfully supply goods to Russia, you need a reliable partner who has his own vehicles, who is able to quickly solve problems when crossing the border and not expose the customer’s goods to risks (for example, when transiting through Georgia), have experience in foreign economic activity or be a professional participant in foreign economic activity , have a customs representative (broker) license, have warehouses and temporary storage warehouses (temporary storage warehouses), have their own wide network of legal entities and partners in different countries of the world.

In our company, we have learned to delve into the situation of each client in detail and offer a solution that will allow us to organize the purchase and delivery of goods on a turnkey basis to Russia without additional costs with optimal delivery times for goods.

As the market changes, the range of services provided changes, and each buyer has his own offer. The only question is whether he is ready to take risks and pay according to his requests.

Author: Ruslan Zhakhin, commercial director of the Ulyanovsk international trade and logistics operator VAVS LLC

Source: Information agency “RZD-Partner.RU”

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