Export control

Export control covers goods, technologies, software and information that could be used to make weapons or for military purposes. In Russia, its framework is set by Federal Law No. 183-FZ “On Export Control”, and the regulator is FSTEC of Russia. The lists of controlled items are approved by separate legal acts.

How it differs from customs control

Customs checks goods at the border: code, value, duties. Export control answers a different question: whether these goods may be exported at all, to this recipient and for this purpose. If the goods are on a list, a license or permit is required, and sometimes export is prohibited. The end user and how it will use the goods are also checked.

Where it comes up in payments

For a Russian exporter, the main thing is to obtain the permit before shipment if the goods are on a list. Without it, the deal is unlawful, and no payment will fix that.

For an importer, the rules of the supplier’s country matter. Many countries restrict supplies of certain goods to Russia. The supplier may ask for an end-user certificate, and its bank and the intermediary banks check the payment purpose, the product code and the recipient. If the goods fall under restrictions, the payment will be returned or blocked.

What to watch for

• Determine the exact TN VED code and description of the goods before signing the contract.
• Check the restrictions in the supplier’s country and in transit countries.
• Describe the goods the same way in the contract, the invoice and the payment purpose.
• Keep the end-use documents.

A broker works only with lawful deals. If the goods are under restrictions, we find this out before the payment order, not after the roubles are debited. On other prohibitions and restrictions in foreign trade: non-tariff regulation.