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16 March 2010 New import and export rules for electronics and similar goods with an encryption function

Legal Update No. 130

Goltsblat BLP advises that the Federal Customs Service has distributed letter of 15 February 2010 No. 01-11/6832 “On the specifics of importing encryption equipment” (the Letter).

The Letter explains the conditions, applicable from 1 January 2010, of section 2.19 “Encryption (cryptographic) means with restrictions on import on to the customs territory of the Customs Union and export therefrom” of the Unified List of Goods on which import or export prohibitions or restrictions are imposed by the members of the Customs Union within the scope of the Eurasian Economic Community in trade with third countries (with the Regulations on application of restrictions), approved by Resolution of the Inter-governmental Council of EurAsEC of 27 November 2009 No. 19 and Resolution of the Commission of the Customs Union of 27 November 2009 No. 132.

The given section 2.19 lists exhaustively the goods to which the relevant restrictions apply. These are printers, copy and fax machines, cash registers, computers, means and equipment for communications, radio-broadcasting and television broadcasting, software, other such electrical machines and equipment with encryption functions or including means of encryption. In addition, clause 3 of the Regulations to section 2.19 provides a complete list of means of encryption.
For the purpose of customs clearance of goods included in section 2.19, a licence from the Ministry for Industry and Trade of the Russian Federation must be presented or details provided of a registered notification. Appendix 1 to section 2.19 gives an exhaustive list of goods (products) subject to notification. These are personal smart-cards, mobile civil radio-electronic devices, encryption equipment for banking and financial operations, and so on. In Russia, notification is registered by the Federal Security Service (FSB) of Russia (Centre for licensing, certification and protection of official secrets of the FSB of Russia). For customs clearance of such goods, the notification registration number is entered in field 44 of the freight customs declaration.

It is thus clearly determined in which cases a licence is required for customs clearance and in which details of notification are needed. Moreover, previously no notification of goods was performed in Russia at all, including of those indicated. To import such goods, permission was required from the FSB of Russia or a licence from the Ministry for Economic Development of the Russian Federation, there having been no clear criteria for determining which goods were subject to licensing.

Notification is submitted by the manufacturer or its authorised representative once for each type of encryption means on the basis of its own proof and, after registration, allows any person to import/export the means of encryption in any quantities without reapplying to the FSB of Russia.

If the goods (including those mentioned in section 2.19) have no encryption functions, they are declared in consideration of the specifics envisaged by order of the Federal Customs Service of Russia dated 4 September 2007 No. 1057, namely, fields 33 and 31 of the freight customs declaration are used. If confirmation is required of the absence of the given functions in the goods, the Letter recommends using the accompanying technical documentation, other documents and information indicative of this, as well as still valid conclusions by the above-mentioned Centre of the FSB of Russia of the goods not being classified as encryption equipment, issued before 1 January 2010. The Federal Customs Service of Russia has agreed with the FSB of Russia that such conclusions may be used.

For additional information, please contact:

Vladimir Tchikine, Partner,
Customs and Foreign Exchange
Goltsblat BLP;

Elena Belozerova, Head of Group,
Customs and Foreign Exchange
Goltsblat BLP;

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