Federal customs service (Russian Federation) Trader-targeted approach in risk management system

General purposes of risk management system application 1 Effective customs control by selection of entities for and forms and amounts of customs control based on risk assessment Establishment of conditions for faster and simpler movement of goods which do not fall under risk minimization measures across the customs border of the Customs union Optimal use of customs bodies resources assigned for customs control Purposes of customs control Interests of law-abiding foreign traders

Number of importers Number of shipments Import of goods to Russia in

Categorization of importers in risk management system Based on statements it includes importers involved in:  manufacturing,  Industrial assembly of vehicles,  Import of meat products;  Import of fish products;  Exporters of own products 350 entities included in low risk category Based on statements it includes importers involved in:  manufacturing,  Industrial assembly of vehicles,  Import of meat products;  Import of fish products;  Exporters of own products 350 entities included in low risk category «Industry-based» approach Analysis of databases in automated regime determines list of importers in low risk category. More than 2 th. entities included in low risk category Analysis of databases in automated regime determines list of importers in low risk category. More than 2 th. entities included in low risk category «Automated» approach Percentage of customs declarations 44% Percentage of customs payments 57% 3

Basic criteria to determine selectivity grade by application of risk minimization measures within industry-based approach - Basis type of activity - Amount of authorized capital - Period of involvement into foreign trade - Non-application of simplified taxation system - Absence of administrative offences which incur large amounts of penalties - Absence of unsatisfied judgments on administrative offences - Absence of tax and charges arrears etc. 4

Outcomes of sector approach application in

Development of trader-targeted approach in risk management system. General principles of automated categorization of foreign traders 6

Foreign trader’s activity analysis based on criteria for foreign traders Criteria for foreign traders - authorized capital amount; - period of activity in foreign trade; - absence of offshore contracts and indirect deliveries; - arrears in customs duties, interests and fees; - information from tax bodies; - AEO status etc. - comparative analysis of general risk indicators; - dynamics of customs value and customs payments indices; - effectiveness of risk management system application; - detected offences; - administrative judgments on goods classification; - call off or refusal in declaration issue. Criteria for foreign traders - authorized capital amount; - period of activity in foreign trade; - absence of offshore contracts and indirect deliveries; - arrears in customs duties, interests and fees; - information from tax bodies; - AEO status etc. - comparative analysis of general risk indicators; - dynamics of customs value and customs payments indices; - effectiveness of risk management system application; - detected offences; - administrative judgments on goods classification; - call off or refusal in declaration issue. Criteria of customs control General indicators (criteria) for foreign traders 7

Distribution of importers with low risk level by automated categorization 8

Import of goods to Russia in 2015:importers with low risk rate 9 Largest importers with low risk rate, which import goods originating from the Netherlands : Nestle Russia, Indesit international, Mars, Kazanorgsintez, Mondelis Rus, Magnitogorsk Iron and Steel Works, Tarkett, Kinef, Kuibyshevazot, PepsiCo Holdings, etc. Largest importers with low risk rate, which import goods originating from the Netherlands : Nestle Russia, Indesit international, Mars, Kazanorgsintez, Mondelis Rus, Magnitogorsk Iron and Steel Works, Tarkett, Kinef, Kuibyshevazot, PepsiCo Holdings, etc.

Number of customs inspections Import of goods to Russia in 2015: forms of customs control 10 Number of customs expert examinations Number of additionally requested documents

Inspected by customs Outcomes of trader-targeted approach application within risk management system in 2015 Expertized by customs Share of shipments (by import) Additional documents and data requested Any importers Importers of goods from the Netherlands with low risk level 4,1%0,8% 0,5%0,1% 21,7%5,5% Importers with low risk level 2 hours 47 min Average time of goods release (by import) in the 4 th quarter

Federal customs service (Russian Federation) Trader-targeted approach in risk management system