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Russia has till July to fix US$2.2 billion customs trucking dispute

THE International Road Transport Union (IRU)'s board has until July 1 to withdraw "TIR" coverage from Russia if Moscow does not stop enforcing illegal customs charges and inspections on cross-border cargo trucks that add US$2.2 billion to annual costs.

IRU secretary general Umberto de Pretto told Reuters that he remained hopeful of a solution, saying it was inconceivable that Russia would drop out of the TIR system of customs guarantees that has ensured speedy border crossings for trucks across Europe since 1954.

"Nobody can imagine a world without Russia in the TIR system, and nobody can imagine how you can trade with Russia without TIR," he said after the IRU meeting in Geneva.

With a TIR guarantee, a driver can take a sealed cargo across multiple borders without having to undergo customs checks each time, saving time and money.

Russia effectively pulled out of the TIR system last July, with Russian Customs citing a RUB20 billion (US$567 million) debt owed by its national TIR association. The IRU said the claim was groundless, defamatory and "a complete fabrication."

The Moscow Arbitration Court subsequently found Russian Customs had defamed the association and found the head of Customs, Andrei Belyaninov, personally liable for not respecting the court decision.

Despite the ruling, and despite Russia's Economy, Finance and Transport Ministries favouring the TIR system, Russian Customs is still demanding trucks get paperwork from its subsidiary Rostek, which Mr de Pretto says breaks the TIR rules.

"It's just a very expensive system," he said. "And worse than that, the guarantee that they've put in place is in fact not really a guarantee. There's no guarantee that the liabilities of transport operators will be covered. They're still liable 100 per cent and as such it doesn't really act as an efficient or secure system, as does TIR."

A conservative figure for the immediate cost of the Russian action was $2.2 billion per year, Mr de Pretto said. But "you could have a multiplier effect of 10 times on missed business opportunities, on small and medium-sized enterprises that will not be able to get their goods to market because of these additional costs".