Re-export is a tool to minimize the damage from sanctions
Sanctions are forcing the exporters to find different ways to avoid EU. One of them is reexportation, when imported products are being transported to third countries from the host country for trade.
Re-export is a routine process and is widely used in practice in the following situations:
Re-export is a routine process and is widely used in practice in the following situations:
1. Products cannot be delivered to the country directly
For example: you need to deliver goods to Russia from Italy, but Italian companies do not carry out transportation in this direction. Then you send the goods from Italy to China, and China is already moving it to Russia. Thus, the goods sent from Italy get to Russia, as it were, by a roundabout way.
2. Defective products need to be returned back
If a Russian buyer recognizes a product imported from abroad as unsuitable for use, they can return it to the supplier. This will be called re-export as opposed to export.
3. The manufacturer has a "free warehouse" zone
At some auto assembly factories, for example, there is a “free warehouse” regime. This means that factories can store foreign components in their warehouses and use them without paying customs duties and taxes. The assembled cars can then be placed under the re-export procedure, which means they’re being sent back to component suppliers. These cars will be used in the customs territory of the EAEU without paying customs duties and VAT.
4. The Russian ruble depreciates, and the company does not have enough money to pay customs duties
Since the beginning of the military operation in Ukraine, most of our customers, who had paid for the goods in advance, nevertheless had to refuse to import. Companies were afraid that due to the sharp increase in custom duties, caused by the growth of the national currency, the cost of goods in the Russian Federation would simply become uncompetitive. Partially this problem can be solved by filing a preliminary customs declaration (PTD). In this case, before the cargo crosses the EAC border, the importer fixes the “comfortable” exchange rate of the Central Bank of the Russian Federation, at which customs payments will be calculated. If the goods have already arrived at the temporary storage warehouse (TSW), and there is no money for customs payments, you can send the goods back as part of the re-export procedure.
5. The importer does not have permits
Let's say a foreign cargo has arrived in the country. However, before submitting the customs declaration, it turns out that permits are issued with errors or are missing altogether. If it is very expensive to keep the cargo in a temporary storage warehouse, then it is easier to take it back.
6. The supplier made mistakes in the accompanying documents
The supplier does not have enough skills in international trade. They made some mistakes in the documents, such as product’s name, its price or even put wrong names of legal entities. Then the customs will not issue the goods. If the importer has not tracked down these errors prior to shipment or has not coordinated the documents with his customs representative, perhaps the only way out is to re-export the cargo.
Types of re-export
Re-export can be direct or indirect, depending on the direction of movement of goods:
Direct re-export — the goods are being imported to the territory of the resident country, and then, for various reasons, are being exported back to the country of origin or a third country. For example, a company imports goods from Italy to Russia, and then for some reason returns it to Italy.
Indirect re-export — goods are not being imported to the resident country, but being resold to a third party in another country. The company buys goods without moving them to Russia and proceeds to resell them to another country, such as, for example, China.
Indirect re-export has a number of advantages:
The main restrictive measures that the EU has introduced against Russia are described in EU Council Regulation 328 of February 25, 2022. In particular, it lists a number of companies from Russia with which Europeans are prohibited from conducting international trade. It also lists a number of goods that, under certain conditions (as a rule, depending on the scope of their intended use) are prohibited for export. In this case, the sender can obtain a special permit (license) for the supply of goods from this list to the Russian Federation. These permits are issued by special authorities at the place of registration of the sender - departments of the Chamber of Commerce and Industry, the Ministries of Economy, etc. Their list is defined by Appendix I to the Regulations. The timing of the issuance of such permits may vary. For now, such process takes about two weeks since the day of the application.
If sender receives such license, they can then send goods to a direct contract with an importer in the Russian Federation. As a result, this will be a delivery with normal imports, just like it used to be before.
For example: you need to deliver goods to Russia from Italy, but Italian companies do not carry out transportation in this direction. Then you send the goods from Italy to China, and China is already moving it to Russia. Thus, the goods sent from Italy get to Russia, as it were, by a roundabout way.
2. Defective products need to be returned back
If a Russian buyer recognizes a product imported from abroad as unsuitable for use, they can return it to the supplier. This will be called re-export as opposed to export.
3. The manufacturer has a "free warehouse" zone
At some auto assembly factories, for example, there is a “free warehouse” regime. This means that factories can store foreign components in their warehouses and use them without paying customs duties and taxes. The assembled cars can then be placed under the re-export procedure, which means they’re being sent back to component suppliers. These cars will be used in the customs territory of the EAEU without paying customs duties and VAT.
4. The Russian ruble depreciates, and the company does not have enough money to pay customs duties
Since the beginning of the military operation in Ukraine, most of our customers, who had paid for the goods in advance, nevertheless had to refuse to import. Companies were afraid that due to the sharp increase in custom duties, caused by the growth of the national currency, the cost of goods in the Russian Federation would simply become uncompetitive. Partially this problem can be solved by filing a preliminary customs declaration (PTD). In this case, before the cargo crosses the EAC border, the importer fixes the “comfortable” exchange rate of the Central Bank of the Russian Federation, at which customs payments will be calculated. If the goods have already arrived at the temporary storage warehouse (TSW), and there is no money for customs payments, you can send the goods back as part of the re-export procedure.
5. The importer does not have permits
Let's say a foreign cargo has arrived in the country. However, before submitting the customs declaration, it turns out that permits are issued with errors or are missing altogether. If it is very expensive to keep the cargo in a temporary storage warehouse, then it is easier to take it back.
6. The supplier made mistakes in the accompanying documents
The supplier does not have enough skills in international trade. They made some mistakes in the documents, such as product’s name, its price or even put wrong names of legal entities. Then the customs will not issue the goods. If the importer has not tracked down these errors prior to shipment or has not coordinated the documents with his customs representative, perhaps the only way out is to re-export the cargo.
Types of re-export
Re-export can be direct or indirect, depending on the direction of movement of goods:
Direct re-export — the goods are being imported to the territory of the resident country, and then, for various reasons, are being exported back to the country of origin or a third country. For example, a company imports goods from Italy to Russia, and then for some reason returns it to Italy.
Indirect re-export — goods are not being imported to the resident country, but being resold to a third party in another country. The company buys goods without moving them to Russia and proceeds to resell them to another country, such as, for example, China.
Indirect re-export has a number of advantages:
- In some situations, it leads to a significant reduction in logistics costs, since the goods are delivered directly to the final buyer.
- Goods sold under the regime of indirect re-export (without import into the resident country) are not subject to value added tax.
- The procedure, in fact, has nothing to do with customs clearance, since the goods do not cross the customs border of the buyer's country. In this regard, currency control is reduced to checking non-cash payments between the participants in the transaction. Payments to non-residents are being confirmed on the basis of the contract, invoice or transport document.
- Within the same contract, both direct and indirect re-exports can be applied.
The main restrictive measures that the EU has introduced against Russia are described in EU Council Regulation 328 of February 25, 2022. In particular, it lists a number of companies from Russia with which Europeans are prohibited from conducting international trade. It also lists a number of goods that, under certain conditions (as a rule, depending on the scope of their intended use) are prohibited for export. In this case, the sender can obtain a special permit (license) for the supply of goods from this list to the Russian Federation. These permits are issued by special authorities at the place of registration of the sender - departments of the Chamber of Commerce and Industry, the Ministries of Economy, etc. Their list is defined by Appendix I to the Regulations. The timing of the issuance of such permits may vary. For now, such process takes about two weeks since the day of the application.
If sender receives such license, they can then send goods to a direct contract with an importer in the Russian Federation. As a result, this will be a delivery with normal imports, just like it used to be before.
Re-export is a tool to minimize the damage from sanctions
Sanctions are forcing the exporters to find different ways to avoid EU. One of them is reexportation, when imported products are being transported to third countries from the host country for trade.
Re-export is a routine process and is widely used in practice in the following situations:
Re-export is a routine process and is widely used in practice in the following situations:
1. Products cannot be delivered to the country directly
For example: you need to deliver goods to Russia from Italy, but Italian companies do not carry out transportation in this direction. Then you send the goods from Italy to China, and China is already moving it to Russia. Thus, the goods sent from Italy get to Russia, as it were, by a roundabout way.
2. Defective products need to be returned back
If a Russian buyer recognizes a product imported from abroad as unsuitable for use, they can return it to the supplier. This will be called re-export as opposed to export.
3. The manufacturer has a "free warehouse" zone
At some auto assembly factories, for example, there is a “free warehouse” regime. This means that factories can store foreign components in their warehouses and use them without paying customs duties and taxes. The assembled cars can then be placed under the re-export procedure, which means they’re being sent back to component suppliers. These cars will be used in the customs territory of the EAEU without paying customs duties and VAT.
4. The Russian ruble depreciates, and the company does not have enough money to pay customs duties
Since the beginning of the military operation in Ukraine, most of our customers, who had paid for the goods in advance, nevertheless had to refuse to import. Companies were afraid that due to the sharp increase in custom duties, caused by the growth of the national currency, the cost of goods in the Russian Federation would simply become uncompetitive. Partially this problem can be solved by filing a preliminary customs declaration (PTD). In this case, before the cargo crosses the EAC border, the importer fixes the “comfortable” exchange rate of the Central Bank of the Russian Federation, at which customs payments will be calculated. If the goods have already arrived at the temporary storage warehouse (TSW), and there is no money for customs payments, you can send the goods back as part of the re-export procedure.
5. The importer does not have permits
Let's say a foreign cargo has arrived in the country. However, before submitting the customs declaration, it turns out that permits are issued with errors or are missing altogether. If it is very expensive to keep the cargo in a temporary storage warehouse, then it is easier to take it back.
6. The supplier made mistakes in the accompanying documents
The supplier does not have enough skills in international trade. They made some mistakes in the documents, such as product’s name, its price or even put wrong names of legal entities. Then the customs will not issue the goods. If the importer has not tracked down these errors prior to shipment or has not coordinated the documents with his customs representative, perhaps the only way out is to re-export the cargo.
Types of re-export
Re-export can be direct or indirect, depending on the direction of movement of goods:
Direct re-export — the goods are being imported to the territory of the resident country, and then, for various reasons, are being exported back to the country of origin or a third country. For example, a company imports goods from Italy to Russia, and then for some reason returns it to Italy.
Indirect re-export — goods are not being imported to the resident country, but being resold to a third party in another country. The company buys goods without moving them to Russia and proceeds to resell them to another country, such as, for example, China.
Indirect re-export has a number of advantages:
The main restrictive measures that the EU has introduced against Russia are described in EU Council Regulation 328 of February 25, 2022. In particular, it lists a number of companies from Russia with which Europeans are prohibited from conducting international trade. It also lists a number of goods that, under certain conditions (as a rule, depending on the scope of their intended use) are prohibited for export. In this case, the sender can obtain a special permit (license) for the supply of goods from this list to the Russian Federation. These permits are issued by special authorities at the place of registration of the sender - departments of the Chamber of Commerce and Industry, the Ministries of Economy, etc. Their list is defined by Appendix I to the Regulations. The timing of the issuance of such permits may vary. For now, such process takes about two weeks since the day of the application.
If sender receives such license, they can then send goods to a direct contract with an importer in the Russian Federation. As a result, this will be a delivery with normal imports, just like it used to be before.
For example: you need to deliver goods to Russia from Italy, but Italian companies do not carry out transportation in this direction. Then you send the goods from Italy to China, and China is already moving it to Russia. Thus, the goods sent from Italy get to Russia, as it were, by a roundabout way.
2. Defective products need to be returned back
If a Russian buyer recognizes a product imported from abroad as unsuitable for use, they can return it to the supplier. This will be called re-export as opposed to export.
3. The manufacturer has a "free warehouse" zone
At some auto assembly factories, for example, there is a “free warehouse” regime. This means that factories can store foreign components in their warehouses and use them without paying customs duties and taxes. The assembled cars can then be placed under the re-export procedure, which means they’re being sent back to component suppliers. These cars will be used in the customs territory of the EAEU without paying customs duties and VAT.
4. The Russian ruble depreciates, and the company does not have enough money to pay customs duties
Since the beginning of the military operation in Ukraine, most of our customers, who had paid for the goods in advance, nevertheless had to refuse to import. Companies were afraid that due to the sharp increase in custom duties, caused by the growth of the national currency, the cost of goods in the Russian Federation would simply become uncompetitive. Partially this problem can be solved by filing a preliminary customs declaration (PTD). In this case, before the cargo crosses the EAC border, the importer fixes the “comfortable” exchange rate of the Central Bank of the Russian Federation, at which customs payments will be calculated. If the goods have already arrived at the temporary storage warehouse (TSW), and there is no money for customs payments, you can send the goods back as part of the re-export procedure.
5. The importer does not have permits
Let's say a foreign cargo has arrived in the country. However, before submitting the customs declaration, it turns out that permits are issued with errors or are missing altogether. If it is very expensive to keep the cargo in a temporary storage warehouse, then it is easier to take it back.
6. The supplier made mistakes in the accompanying documents
The supplier does not have enough skills in international trade. They made some mistakes in the documents, such as product’s name, its price or even put wrong names of legal entities. Then the customs will not issue the goods. If the importer has not tracked down these errors prior to shipment or has not coordinated the documents with his customs representative, perhaps the only way out is to re-export the cargo.
Types of re-export
Re-export can be direct or indirect, depending on the direction of movement of goods:
Direct re-export — the goods are being imported to the territory of the resident country, and then, for various reasons, are being exported back to the country of origin or a third country. For example, a company imports goods from Italy to Russia, and then for some reason returns it to Italy.
Indirect re-export — goods are not being imported to the resident country, but being resold to a third party in another country. The company buys goods without moving them to Russia and proceeds to resell them to another country, such as, for example, China.
Indirect re-export has a number of advantages:
- In some situations, it leads to a significant reduction in logistics costs, since the goods are delivered directly to the final buyer.
- Goods sold under the regime of indirect re-export (without import into the resident country) are not subject to value added tax.
- The procedure, in fact, has nothing to do with customs clearance, since the goods do not cross the customs border of the buyer's country. In this regard, currency control is reduced to checking non-cash payments between the participants in the transaction. Payments to non-residents are being confirmed on the basis of the contract, invoice or transport document.
- Within the same contract, both direct and indirect re-exports can be applied.
The main restrictive measures that the EU has introduced against Russia are described in EU Council Regulation 328 of February 25, 2022. In particular, it lists a number of companies from Russia with which Europeans are prohibited from conducting international trade. It also lists a number of goods that, under certain conditions (as a rule, depending on the scope of their intended use) are prohibited for export. In this case, the sender can obtain a special permit (license) for the supply of goods from this list to the Russian Federation. These permits are issued by special authorities at the place of registration of the sender - departments of the Chamber of Commerce and Industry, the Ministries of Economy, etc. Their list is defined by Appendix I to the Regulations. The timing of the issuance of such permits may vary. For now, such process takes about two weeks since the day of the application.
If sender receives such license, they can then send goods to a direct contract with an importer in the Russian Federation. As a result, this will be a delivery with normal imports, just like it used to be before.