— Ruslan Valentinovich, Western countries have limited the supply of a large number of goods to the Russian market with their sanctions and at the same time banned the purchase of a number of our products. How are logistics routes being restructured at the moment?
"It seems to me that today the difficulties of those who imposed illegal sanctions against the Russian Federation are obvious. There is a fait accompli – the reversal of Russian foreign trade and logistics to the East and to the South, and the loss by Westerners of the very attractive, I would say, premium market of Russia and the Eurasian Economic Union, where a total of at least 200 million people live. This is a market with a high level of consumption, accustomed to Western goods, but for some reason the West decided to lose it for itself.
If before all the crisis phenomena, before 2014, the share of the European Union in trade between the Russian Federation and the EAEU was about 54%, now it is only 16%. Naturally, the EU has been replaced by other trading partners – friendly countries that are happy to work with Russia, and whose goods are no worse in quality.
- Ruslan Davydov on the redirection of trade flows from the West to the East and South
— What does the list of our main trading partners look like now?
— In the first place, of course, is China. The country is also among the leaders in terms of trade turnover growth with Russia this year. India has rapidly moved up to third place in the list of our trading partners, and since it is the absolute leader in terms of trade growth, it has every chance to soon reach the second place, which is now occupied by Turkey. In other words, we see that Russia's global pivot to the East and South has taken place.
In the alignment of transport and logistics corridors, we have lost up to 35% of cargo traffic in the north-western direction, which has always been our trade gateway to Europe. The Europeans are now trying to close the window that Peter the Great opened and sabotage cooperation with us in every possible way. Nevertheless, trade in the Far East and the South is increasing by about the same amount.
— How has Russia's foreign trade volume changed since the beginning of 2023?
— If we talk about weight parameters, in general, foreign trade added 3% to the level of last year. In terms of value, of course, there is a certain decrease – about 15-16% so far, which is due to the fall in the cost of energy. Let me remind you that for most of 2022, on the contrary, we had exorbitant prices for oil, petroleum products and natural gas.
Meanwhile, imports in value terms increased by 18% compared to last year. Therefore, the movement of goods is proceeding, there are no problems. Our new partners, friendly countries, are increasing trade with Russia, and we are also helping our Motherland to overcome illegal Western sanctions.
— What level of trade turnover can we reach by the end of 2023?
— I think in value terms it will be about $650 billion. Forecasts, of course, are a thankless job, but we should see approximately this value.
— Since last year, parallel imports have been launched in Russia. Is there an increase in the import of counterfeit products in this regard?
— You know, in recent years, we have had a fairly stable situation with counterfeit goods. Every year we detect about 7-8 million units of such products, although this year it will probably be less. Despite all the changes related to parallel imports, the customs service has fought and continues to fight against the import of counterfeit goods and will continue to do so in the future.
This is where labeling comes in handy. Ten years ago, we advocated the introduction of physical labeling of goods, because its presence or absence is the first, so to speak, degree of "cleaning." The second is to verify the authenticity of the marking. Today, this is done quite simply: you can use your smartphone to determine whether a brand is registered in the Honest Mark system.
In other words, we attribute the current whitewashing of the market to the fact that labeling of goods is being used more and more widely, and it has become easier for regulatory authorities, including customs, to verify the authenticity of products.
— How much money has the Federal Customs Service of Russia transferred to the budget since the beginning of this year?
I must say that we had a tough first four months. At that time, we were, as they say, in the "red zone", that is, we were lagging behind the forecast target. First of all, this is due to the fact that our former partners blew up the pipelines of the Nord Stream system. As a result, Russia did not receive revenues from gas exports, which were still very expensive last year, and we and the budget did not receive customs payments from the export of this raw material.
However, since May, we have managed to return to the "green zone", we have reached the implementation of the plan and hope that it will be fully implemented for the year. We have already collected more than 5.2 trillion roubles in customs payments. Of these, about 4 trillion are import payments, about 1 trillion are exports, and the rest is a recycling fee. By the end of 2023, we will have to reach 6.464 trillion rubles. The plan is hard, intense, but doable.
I would like to note that we have already fulfilled the annual target for import payments. The thing is that now 75% of federal budget revenues administered by the customs service are import payments, although in previous years the picture was the opposite, and usually up to 70% of revenues to the treasury through the Federal Customs Service accounted for export payments.
By the way, not so long ago, some of our colleagues expressed concerns that the introduction of new export duties could increase the burden on exporters. However, I would like to emphasise that all exporters have paid only 1 trillion roubles in duties since the beginning of the year.
— If we talk in a little more detail about the export duties introduced since the beginning of this month with reference to the ruble exchange rate, how much money has already been collected over the past time? In general, how can the government's initiatives to strengthen the national currency affect the dynamics of foreign trade?
— As you have already said, the duty rate is tied to the ruble exchange rate. We have seen that after the introduction of the duty and the establishment of stricter rules on currency control, the ruble exchange rate went up, respectively, the dollar is declining. Various estimates were made by highly respected experts and leaders that a comfortable exchange rate for the economy is in the range of 85-90 rubles per dollar. We also believe that this is approximately the range for foreign trade that will allow us both to maintain the dynamics of trade (both in terms of imports and exports) and to ensure the receipt of customs payments.
- Ruslan Davydov on the ruble's comfortable exchange rate for the economy
To date, only about 1 billion rubles have been collected from all the duties that were introduced on October 30. I say "only" because it is equivalent to how much customs payments we usually collect in one working day – 26-27 billion rubles. Therefore, in our opinion, the burden on exporters from this innovation is quite moderate.
— What work is the agency doing as part of the digital transformation of the service?
"We have been engaged in digital transformation for many years. Back in 2008, we issued the first electronic declaration, in 2012 we introduced preliminary information in electronic form for road transport, in 2014 for rail transport, in 2017 for air transport, and in 2018 for sea transport. Also, since 2014, all declarations, with rare exceptions, have been submitted or issued electronically.
Automation is at the heart of all of these initiatives. That is, we are engaged in digital transformation in order to increase our productivity – to be able to issue more declarations faster and more per unit of time with a smaller number of officials and, accordingly, to ensure the accuracy of selective control through the processing of big data.
This year, we have about 3.2 million declarations for goods. Of these, 85% were registered and 27% were issued fully automatically, without the participation of customs officials.
— With which countries is Russia currently creating simplified customs corridors?
"There are 25 friendly countries at the forum. Eight agreements on simplification and acceleration of procedures will be signed. Agreements on mutual recognition of authorized economic operators have already been concluded: last year with China, this year with Iran and Uzbekistan.
We have simplified customs corridors with China, Turkey, Azerbaijan and Uzbekistan. And the rest of the friendly countries that are ready to trade with us are on the way. These are the states of the Global South and the Southeast. We are talking, for example, about Vietnam, about the Arab countries, about Egypt and Algeria.
- Ruslan Davydov on simplified customs corridors
By the way, we have had such projects with European countries, in particular with Italy and Finland. However, today they themselves announced the freezing of customs cooperation with Russia and, in fact, the deliberate slowdown of work at the borders, moreover, with goods that are not subject to sanctions. These are medicines, food, and clothing. Unfortunately, our former partners are making special efforts to slow down trade.
Do you think we will ever be able to return to the previous level of trade with the EU, which was before 2022?
— The World Customs Organization has a slogan: "Borders are separated, and customs are united." As customs officers, we are ready to facilitate the development of trade with all partners who want to work with us and the development of relations with which is useful for Russia.
Nevertheless, if we talk about the return of the previous volumes of work with the West, then I do not see such prospects in the foreseeable future. Take, for example, the car market. Today, China accounts for up to 92% of Russia's total car imports, because our former Western partners have left the market, freeing up a platform for concerns from China.
Overall, the Chinese auto industry has made a giant leap forward over the past two years. The country has reached a stable level of production, which allows us to accumulate profits for subsequent investments in new technologies, and we see how the quality of Chinese cars is improving literally before our eyes. At the same time, our consumers get used to it and are no longer afraid to buy Chinese.
In this context, history can be recalled. Even after the Second World War, Japanese products were not quoted at all, and then gradually, somehow imperceptibly, the country's automotive industry became a world leader. Later, Korean cars made a similar path: the same Genesis can now compete with Mercedes, BMW and Audi. Therefore, it will be a very short time and we will see the Chinese auto industry overtake the European one, because Europe has made a strategic mistake by cutting itself off from our market and allowing China to develop at a gigantic pace.
The automotive industry, like the aircraft industry, requires a large number of subcontractors and suppliers. Therefore, cutting itself off from the big market on its own will not pass without a trace for Europe, and the Chinese, as we can see, know how to use the window of opportunity.