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2019 November 6

Sergey Senko: “We do not stay stagnant but improve permanently”

Attractiveness of ports depends to a great extent on customs. Interviewed by IAA PortNews at the International Customs Forum in Moscow, Chief of the Baltic Customs Sergey Senko, tells about inspection of vessels, customs value, e-declarations, CIC availability, round-the-clock operation and interaction with businesses.

- Mr. Senko, the shipping community has long been discussing inspection of vessels without involving onboard commissions. How far have you proceeded with that? What is the share of such inspections within the Baltic Customs?

- We have been addressing this issue for quite a long time already. With the current trend towards providing preliminary information, involving of onboard commissions is minimal today: in 80% of cases vessel clearance is done without onboard commissions (out of 5,968 calls between January 1 and September 30, 2019, 1,185 ships were cleared through involving onboard commissions, 4,783 ships – without them).

However, risk management system provides for involving onboard commissions including representatives of state regulators if necessary.

Everything depends on specific situation and availability of preliminary information. From 1 July 2019, when providing preliminary information became obligatory, the Baltic Customs has not registered a single case of noncompliance with that requirement. However, when cynologists are to be involved our officials go onboard as part of the commission.

With the opportunities provided by today’s digital technologies onboard commissions are not reasonable in most cases since all information about cargo is available in advance.

We started working with Customs Vessel Entrance and Clearance file in electronic format in 2017 as part of experiment supported by the Federal Customs Service (FCS) and we continue this development.

- You have mentioned preliminary information. Could you please elaborate what foreign trade operators should focus on?

- There is obligatory and extended preliminary information. The obligatory one, first of all, includes information about a ship and general information about goods.

The extended one has nothing to do with our decision on involving of an onboard commission but is aimed are facilitating the declaration procedure. The more preliminary information about goods we have the easier it is to assess possible risks. Consequently, having seen no risks before the arrival of a ship we considerably reduce the time goods stay in a port, hence the reduction of costs.

Our key purpose is to obtain reliable information for a high-quality and full-scale customs control.

- Sometimes, customs clearance involves customs inspection complexes (CIC). Are there problems at Big Port St. Petersburg with their availability?

- We have a permanent CIC at the FCT terminal and there are four mobile CICs operating in all districts of the port. Of course, the different situations as any equipment can wear out or be out of order and mobile complexes let us respond promptly by moving CIC from less loaded districts so that to prevent accumulation of cargo and rush.

- How successful is the Baltic Customs’ E-Declaration Center, in your opinion. What are the plans on its development?

- The E-Declaration Center of the Baltic Customs has been operating from summer 2016. Initially it was located at the customs point of Bronka and a small staff. Under the programme for modernization and development, the Center was moved to the federally owned facilities on the Dvinskaya Street. The staff has been expanded and a number of activities on equipment and refurbishment have been conducted to create comfortable conditions for our personnel. As of today, the Center accounts for 70% of declarations with the growth demonstrated throughout the year.

From November 1, the share of declarations processed by the Center is to reach almost 100% with other customs points to fulfill the function of control. As part of experiment, the Center currently performs operations dealing with declaration of goods in seaports covered by Arkhangelsk, Murmansk and Vyborg customs. The area covered by Kingisepp customs (Ust-Luga) is to join in the nearest future.

In general, I see no serious problems there: the Center employs professionals of high level with extensive experience.

- Is there a problem of customs value difference between sea and inland customs? Is it among reasons to opt for ports of neighboring countries as stated by some market players?

- I would not say that is the problem. I have recently taken part in an industry-focused conference focused on attraction of cargo from the Baltic states. The issue of customs value was not under discussion there. Actually, the problem is in logistics, in infrastructure and in quality of services, not only customs services but primarily logistic and stevedoring services. The ports of the Baltic states are probably opted for due to their rate policy and logistic chains depending on cargo flows. I believe, and we discussed that with the market players, it has nothing to do with the customs value. There is a unified method to determine the customs value according to the regulatory documents. Customs value index is just an indicator. The difference of customs value only depends on the type of transport, contract terms, type of goods, destination … So I think the problem is far-fetched.

- What is your opinion about efficiency of software system offered by Sea Customs Portal? What can be improved? Why hasn’t it been enough to do away with hard-copy paperwork?

- It has been in operation from 2016 as well. As it has been mentioned, preliminary information is obligatory from 1 July 2019 and it is provided via the Sea Customs Portal. Today, there is a problem related to interaction with other state regulators since in some cases paper documents are required with a special mark. That is a requirement for goods subject to veterinary and phytosanitary control. Although we get an electronic Customs Vessel Entrance and Clearance file from that portal, we have to put a mark on paper BL as long as certain amendments are not introduced into the legislation. That is an acknowledged problem frequently discussed at the meetings of the FCS Board and the amendments will hopefully be introduced in the regulations soon allowing for interaction with other state authorities within the portal exclusively in electronic form.

The portal has proved its viability. A consistent work was conducted to improve its operation basing on the Baltic Customs through interaction with large line such as Maersk, MSC, Containerships, CMA CGM, etc. accounting for about 80% of the container flow within the Baltic Customs area. There are some issues related to the format of data submission.  The one foreseen by the portal is an international format. The discussion is underway but there are no grave problems.

There are single instances of technical failures. We hope that the next phase of the portal development will improve the instrument for preliminary providing of non-obligatory information. Exporters/importers are interested in that. It is more of an organizational challenge: establish normal cooperation between goods receivers, carriers and customs. The portal provides for that.

- Is the Baltic Customs able to operate round-the-clock to meet the demands of foreign trade operators?

- In fact, some of customs procedures are being conducted round-the-clock - those related to arrivals and departures. Even if a decision is made to involve and onboard commission it is possible 24 hours a day with our night shifts available in all districts.

As for declarations, I do not consider transition to round-the-clock operation to be efficient and timely today as there is no such a demand from the business for that. Operation of the E-Declaration Center is synchronized with the work of the port districts, functional divisions of the customs and other state regulatory bodies. The Center is open every day from 9 a.m. till 9 p.m.

- What novelties can be expected in the Baltic Customs area in 2020?

- The only novelty is improvement of the E-Declaration Center’s activities. We will hone the links of the Center with the control points through practicing the cooperation, adjustment of software for further reduction of procedure duration, development of interaction on preliminary information. So, we do not stay stagnant but improve permanently.

- What are the formats of your communication with foreign trade operators to ensure feedback?

- There is a variety of formats. If necessary, we hold open meetings. For example, prior to introduction of the requirement on obligatory preliminary information we held a number of roundtable meetings with shipping companies to discuss technical and technological issues thereof. That is, we are always involved in a dialogue with the business. We meet at the forums, we associate with the working group on creation of a single-window system, consider the world’s best practices in this area and study the experience of the largest European ports such as Hamburg, Rotterdam, etc. We will certainly not be able to manage on our own, we should be aware of the businesses’ problems to ensure a correct and prompt response to our common pressing issues.

- What about cooperation with foreign counterparts?

- As part of the work undertaken by the FCS we take part in meetings with foreign delegations. For example, last year we took part in a meeting with representatives of Vietnam and the Netherlands customs.

It should be noted that the Federal Customs Service cooperates with all the stakeholders to study good practices including those of foreign countries and to detect the bottlenecks of the existing technologies, processes and models for their further optimization.

In February 2019, Baltic Customs and the North-Western Customs Department were familiarized to the basic principles of work at the port of Hamburg including the Dakosy system being applied for a long time.

The principle of single-window system was studied on the example of different European states (Dakosy - Germany, Port Base – the Netherlands, PortNet - Finland).

- What conclusions did you make having studied international experience?

- When comparing the key conditions of information exchange in Russian and foreign ports, one cannot but see evident difference of information structure and content. Among the brightest indicators showing the absence of an efficient information exchange system today is such a significant factor as absence of port integration while business communities currently functioning in ports accumulate rather narrow segments of foreign trade activities that hinders comprehensive approach to current problems; absence of interest among many foreign trade operators in full-scale information exchange including that within the Sea Customs Portal.

However, we cannot but see the the interest of some foreign trade operators in creation of a comprehensive information environment for all market players and its implementation following the example of Hamburg.

I believe that a future-focused model of information cooperation between seaports should certainly be based on advanced information and communication technologies integrated into a single information system of a seaport.

When forecasting the outcomes from introduction of promising customs technologies in seaports it should be noted that each company conducting its activities in seaports will see a specific effect.

Interviewed by Vitaly Chernov

Photo by A. Shmidt

Full interview in Russian will be published in the new edition of the Port Service magazine available from the Editorial Office of IAA PortNews >>>>