|                                                                                                                                                             |  | TIR CARNET: EASING CARGO SHIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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|**BISNISHome PageSearchBISNISEmbassyReportsCountryReportsIndustryReportsPublicationsSourcesof FinanceLeadsand EventsExchangeRatesState ExportsOtherSources** |  | November 1997by Kevin Silva & David HandyGiven the often serious congestion at Russian ports and border crossings, many exporters prefer
to clear customs at the final destination when shipping goods to Russia.  When shipping by road,
especially from Finland or Western or Central Europe, exporters should consider using a trucking
firm authorized to use "TIR Carnet" documentation, which both expedites shipping and improves
the security of goods in transit.What is "TIR Carnet"?
TIR Carnet is a road transit document which allows containerized, and in some cases bulk, cargo
to move from outside Russia to an ultimate destination in Russia.  The document simplifies
processing at borders of European countries which signed an agreement at the Customs
Convention on the International Transport of Goods on November 14, 1975.  The Russian
Federation signed the agreement after 1991.The TIR Carnet protocol signed at the convention contains four basic requirements:Goods should travel in secure vehicles or containers;Duties and taxes "at risk" during the journey should be covered by an internationally valid
guarantee;Goods should be accompanied by an internationally accepted carnet taken into use in the
country of departure serving as a control document in the countries of departure, transit, and
destination; andCustoms control measures taken in the country of departure should be accepted by the
countries of transit and destination.TIR Carnets are issued by the International Road Transport Union (IRU) of Geneva to
national trucking associations in participating countries.  Each association issues TIR Carnet to
national carriers provided they meet the conditions and standards set forth by the IRU.  The
national associations also notify the IRU with the names of approved TIR carriers and provide the
"TIR plate" which is placed on each authorized vehicle.Cargo moving under TIR Carnet is allowed to move directly to Russian Customs at the
destination, rather than at the point of entry.  Without a TIR Carnet, the consignee who receives
goods must produce a "Letter of Guarantee" including information such as container number(s),
contents, unloading site, and the pledge to pay customs duty and taxes. This guarantee must
accompany the goods until they clear customs. Under a TIR Carnet, the motor carrier assumes
financial responsibility for any problems -- including duties, penalties, and interest -- that may
arise with Russian Customs.  Because the TIR Carnet provides Customs with a means to collect
charges not paid by the consignee, TIR Carnet cargo is subject to fewer delays and enjoys more
expeditious delivery.Costs, Requirements
It is more expensive to ship goods using the TIR Carnet system. The additional cost for cargo
moving under TIR Carnet can be as much as $400 per container depending on the distances
traveled from the European origination point to the final destination and the tariff of the trucker
engaged to provide the service.  These fees are usually charged to the consignee. The IRU sets
the maximum insured limits of the TIR Carnet, which is currently $50,000 per TIR Carnet for
general cargo and $200,000 for "special" high-value cargo such as alcohol and tobacco.The use of TIR Carnet does not negate any basic documentation requirements for shipping goods
to Russia.  Above all, a correct commercial invoice is still required to accompany every shipment
entering Russia.  Multiple-container shipments must have a separate commercial invoice for each
container.Advantages
What advantages are there in using TIR Carnet in exchange for the higher cost?  When shipping
to Russia and the NIS, any time the shipper and/or consignee can minimize transit or customs
delays by moving directly to the destination city for customs clearance, the result is an advantage
in time and cost for all concerned.  Currently, 70 percent of all cargo entering Russia enters
through one of three customs houses in St. Petersburg.  The deluge of cargo via sea, air, and rail
through St. Petersburg makes entry via TIR Carnet more attractive.Using TIR Carnet also allows the consignee to monitor the customs process firsthand since
clearance is performed locally rather than far away, enabling them to respond quickly to questions
or problems rather than waiting to hear of the disposition of goods at the port of entry. 
Meanwhile, with the TIR Carnet in use since 1975, any established trucker has to have the "TIR"
designation to maintain its competitive edge. Most reputable truckers providing service to Russia
and other NIS destinations are already TIR Carnet certified.In addition to minimizing delays and problems with customs formalities, TIR Carnet cargo
movements provide for greater security as well.  Merchandise shipped under TIR Carnet must
remain with the designated truck and may not be transshipped unless there is an accident and the
originating truck is disabled.  In this case, transshipment must be made by another truck that is
TIR Carnet approved if at all possible.  This requirement enables the cargo in question to remain
under direct control of the originating carrier from origin to destination, thus maximizing the
integrity of the shipment.Although in late 1996 and early 1997 Russian Customs attempted to limit its number of
TIR-approved truckers, particularly in the Finnish-Russian corridor, these efforts were met with
stiff
resistance. Since there is no absolute oversight and Russian customs can be inefficient, the TIR
system is not immune to operational difficulties at times. All things considered, however, the TIR
Carnet is the most efficient system for moving cargo by truck directly to the consignee in Russia
today. For more information on shipping to the NIS, visit BISNIS Online, at
http://www.mac.doc.gov/bisnis/isa/isa.htm#itisa.Kevin Silva and David Handy represent Freight Solutions International, a Foster City,
California-based international freight forwarder specializing in air and ocean freight
forwarding and project cargo logistics to the NIS.This report is provided courtesy of the Business Information Service for the Newly
Independent States (BISNIS)