Notification-based supervision is possible for some dual-use items

26 july 2017

The main barriers to exports of dual-use items include length of approval procedures, drawbacks of electronic regulation, and low qualifications of experts. That's the conclusion drawn by the participants of the "Supervision of Exports of Dual-Use Items: Potential Barriers to Exports and Ways to Overcome them" round-table that was hosted at the Analytical Center.

Russian exports met with representatives of state agencies to discuss industry problems in order to find ways to deal with them. "The government instructed the Analytical Center and the Russian exports center to help identify and reduce internal barriers in order to boost non-raw materials exports," First Deputy Head of the Analytical Center Vladislav Onishchenko said as he opened the round-table. "One sector of the economy where non-raw materials exports could be increased is the dual-use items. Barriers to their exports should either be easy to go through or easy-to-understand and their number must be reduced."

The Head of the Department for Sectors of the Economy of the Analytical Center Grigoriy Mikryukov noted, "The system of export supervision of dual-use items is used by all developed nations and by most developing countries, specifically in such countries as the US, Canada, the EU, Singapore, India and China and there are international agreements that regulate exports of dual use goods." The expert analyzed the algorithms used by the system in Russia and abroad and concluded that Russia has the longest period for issuing licenses at 45 work days. In Australia, for example, this process takes up to 15 days and in Singapore, it only takes 5 days. The expert is of the opinion that such long licensing periods jeopardize many deals.

Mr. Mikryukov put forward a number of proposals for improvement of these procedures, specifically: the time it takes to get a license to export dual-use goods could be reduced to 15 days, all export supervision could be carried out in digital form, the validity of permits could be increased, licenses could be issued for specific types of goods rather than for specific contracts. The expert also proposed a revolutionary idea that supervision can be carried out through notification: "For some dual-use goods supervision is performed by customers at the international level through exchange of information about deliveries of dual-use goods between customs and law enforcement authorities."

The next speaker was the acting head of the Department for Export Supervision of the Federal Service for Technical and Export Supervision Konstantin Tolstykh. The expert commented on his colleague's claim about the time it takes to get an export license: "Our process takes several times less time than in most countries. Even though the maximum time is 45 days, the average is 15. In Q2, 2017 84 % of all issued licenses were issued within 15 days." In addition, the expert noted that electronic licensing got discussed practically every year, however, developing interdepartmental regulations  cost huge amounts of money. "We can't expect to see major breakthroughs in the software in the near future," Mr. Tolstykh summed up.

Irina Kashirina, an expert on customs administration with the Russian exports center, suggested introducing personal accounts: "Exports have been begging us to introduce personal accounts on the website of the Federal Service for Technical and Export Supervision or other agencies, where they could track the progress of their documents through the system until they get a license." The expert believes this measure will delivery maximum usefulness for the customs service and exporters alike at minimal cost.

AO Alfa Laval Potok technical documentation expert Tatiana Domoratskaya  emphasized the problem of exports to countries that Russia does not have any special restrictions or sanctions for, such as Sweden or Uzbekistan. "The Customs say they don't know that our conclusions in the case of these countries have the same power as the conclusions of an expert organization," Ms. Domoratskaya noted.

Konstantin Tolstykh talked about insufficient qualifications of specialists. "This year we for the first time held examinations for export supervision specialists and less than 10 % of them passed it," the expert shared.

All the remarks and proposals will be analyzed by Analytical Center experts, who will then draft a document to help implement a priority project to develop systemic measures aimed at increasing non-raw materials exports that the Ministry for Economic Development is working on.