UPDATE 1-Trucking body warns Russia over 'illegal' customs charges

Wed Feb 19, 2014 8:35am EST

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By Tom Miles

GENEVA Feb 19 (Reuters) - Global road trucking body IRU said on Wednesday it warned Russia to drop "illegal" frontier inspections and charges or face possible exclusion from an international customs system that facilitates cross-border trade.

Russia stepped up inspections, causing long queues at its borders, last July after the country's Customs Service began to enforce a new national system, levying charges dozens of times higher than previously under the U.N.-backed system of "TIR" guarantees.

The IRU, the International Road Transport Union, wrote to President Vladimir Putin, warning that if the inspections were not halted, it would recommend its members vote to suspend Russia from TIR.

That would mean Russian exporters facing similar problems on European borders.

"There could be a huge impact on trade flows," IRU spokeswoman in Geneva Juliette Ebele told Reuters. "It's going to be a complete mess for transport operators and trade, and the Russian economy, and for imports like food and medicine."

Under TIR, started in 1959 and now operating in 60 countries around the world, goods-carrying road vehicles are inspected by local customs officials at departure and closed with a recognised seal.

The value of the goods is transmitted to customs in the country of destination, which is supposed to allow TIR trucks through borders rapidly to their point of destination, where the cargo can be inspected again.

The new Russian system, ruled illegal by the Supreme Arbitration Court in Moscow and affecting imports worth $110 billion in 2013, has multiplied the cost of transport operations - including transit shipments - involving Russia by up to 83 times, the IRU says.

It says that 40 percent of Russia's overall imports, mainly consumer goods, are affected, pushing up their cost. Trade analysts in Geneva, home to the World Trade Organization, say this inevitably favours Russian producers.

If Russia were to be pushed out of the TIR system, the competitiveness of its own exports to Europe and beyond could be sharply reduced, producing what IRU Secretary-General Umberto de Pretto said would be "a lose-lose scenario." (Reporting by Tom Miles, writing by Robert Evans; Editing by John Stonestreet)

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