Russia needs to change the principle of export supervision

16 june 2017

The Analytical Center hosted a discussion about the current approach to export supervision of international business involving dual-use items as well as the main problems that companies conducting international business run into when trying to get export licenses and permits.

The high level description of the export supervision processes stipulates several stages, Analytical Center expert Alexander Zuyev noted speaking at the round table on the peculiarities of export supervision of dual-use items, potential barriers for exporters and ways to overcome them. "The first stage is the identification of supervised products and technologies. Here there are problems with the definition of what constitutes dual use items and problems can also be encountered with getting a permit if the products or technologies in question are subject to national security regulations," the specialist said. The second and third stages involve getting a permit to conduct international business and getting customs clearance and here there are difficulties too. For example, when getting a license a company often has to provide documents that are within the purview of other state agencies. The situation is further exacerbated by the long wait times for the required documentation which further increase the total amount of time that it takes to carry off an export project.

According to the customs administration project manager at AO Russian Export Center Irina Kashirina, a lot of the problems industry is facing are already well known and some progress in tackling them has already been made. "One big issue that exporters face is that they need to get a license for each export delivery they make," the specialist said. "Now for a number of destinations they can get a permit for an entire contract rather than for each delivery. And there's now the option to get all the required documents once when you enter into a long term contract." This best practice needs to be disseminated, Ms. Kashirina believes.

"Export supervision is not about banning exports, it's about keeping track of the movements of dual use items. For example, we may have to make sure that it's component parts rather than weapons systems that are being exported. And the idea is not to ban exports but keep track of them en route," Pillar of Russia Vice President Marina Bludyan believes. Our foreign colleagues don't have such problems: an exporter declares what components they want to export and the authorities then keep track of them using digital technologies. "In Russia, by contrast, the very principle of export supervision is flawed because in Russia it's not about monitoring and supervision but about issuing permits and that is one of the reasons we can't compete with other countries," the expert believes.