Special economic zone ‚Crimea‘– a multi-sided challenge

Powers may come and go, but trade never stops. This is especially the case with Crimea, an area of special status which is not only in focus of the media, but also of the customs administrations of the Ukraine and Russia, respectively.

From a Ukrainian angle, Crimea is not part of the customs territory of the Ukraine due to the free trade zone that has been created in August 2014. Hence, shipments are conducted under the export-import regime. It was not certain though which Ukrainian customs offices would be entitled to clear shipments into the zone. By November, it crystallized that customs clearance of goods to/from the free zone should be carried out at specified entry and exit checkpoints between Crimea and the Kherson region of the Ukraine. However, a number of open points including the procedure for returnable packaging material handling, contracting and currency control issues as well as conducting veterinary and phytosanitary control still remain, making it for businesses specially challenging to continue trade with the region.

On the Russian side, the legislative was also active. By early December, the President approved the relevant pieces of legislation and as such, the special economic zone of Crimea will be in effect and operational from 1 January 2015. The special economic zone is envisaged for 25 years with the possibility to expand. Apart from the income and property tax benefits Russian special economic zones are associated with, customs procedures will also play an important role.

The Russian Federal customs service has devoted a special section of information on its website for economic operators from the Crimea regions. The legislation in force, guidelines of the customs authority, pieces of news as well as questions and answers have been published, aiming at aiding economic operators to comply with requirements. Several questions arose, ranging from the (re)accreditation and training of customs brokers and agents in the region over the taxation of goods being imported into/exported from the region to the transit procedure for goods from short-sea harbors of the RuBeKa[1] customs union to the Crimean Republic. The newly created free zone will most likely trigger other interpretative measures on the Russian side, as well.

Whatever the outcome, the journey towards a new customs regime is always a challenge. As the saying goes: Азбука — к мудрости ступенька (Alphabet is the step to wisdom).

[1] Russia – Belorus – Kazakhstan have entered into an Eurasian Customs Union with the effect of 1 January 2010.

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