Guest Column: Russia Trade Environment

Navigating the complex relationship of government and the federal customs service


There are a few best practices that importers and exporters should follow to mitigate the effects of a system incapable of providing dependable, functional procedures and standards of behavior. Businesses should:

  • Be transparent about their trade activities. In other words, don't give Customs a reason to detain goods and products.
  • Partner with a local vendor with interests in growing globally. A partner open to succeeding on a global scale will be more flexible in "getting things done."
  • Research the current and former business activities of all partners. Problems can arise when partnering with agents or brokers whose activities have caught the eye of Federal Customs or of the Federal Tax Service.
  • Secure guidance from a multinational law firm with local connections. This firm should provide a legal framework for your business activities that conforms to actual practice.
  • Hire a reputable accountancy firm whose practices conform to best practice standards both in Russia and the firm's foreign legal jurisdiction.
  • Be selective in hiring practices and consider the advantages of having a Western professional at the top of your management team in Russia.
  • Become educated about the Russian culture and mindset. There is a particular psychology drawn from the cultural history which, if understood and acted upon, will help achieve your long term commercial objectives. Participate in the activities of Western-managed trade development organizations in Russia such as the American Chamber of Commerce (Russia). Through forums and commercial services activities, these organizations provide arenas for discussion and a "united front" for addressing specific industry sector concerns with Customs and other federal authorities.
  • Educate executive teams about the challenges of doing business with Russia. The more senior management understands the environment, the more willing they will be to look for solutions instead of "steamrolling" over suppliers.

About the Author: Paul J. Reiff is a Trade Management consultant at JPMorgan Chase with 28 years experience in Logistics, Supply Chain Management and International Trade issues with the majority of these years focused on market development in Russia and the countries of the former Soviet Union. As the lead for the Global Trade Services products in Russia, Reiff is responsible for delivering client engagements in Russia. Reiff has worked to establish platforms and procedures to improve the transparency and efficiency of Russian Customs. His affiliations have included the Senior Diplomatic & Business Association of the Russian Federation, the Customs & Transportation Committee of the American Chamber of Commerce (Moscow) and the US-Russia Business Council, which organizations focus on promoting trade development, compliance and further integration of Russia into the world economy. www.jpmchase.com

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