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President Vladimir Putin has stepped into the row between the Russian Federal Customs Service (FCS) and the International Road Haulage Union (IRU), which issues and controls the TIR carnet system.

President Putin has issued instructions to ensure that the FCS accepts TIR carnets.

The document, translated by the IRU, states: “The Government of the Russian Federation is instructed: to ensure the uninterrupted functioning of the Customs Convention … under cover of TIR Carnets … until the national guaranteeing association is determined and an appropriate agreement is concluded with it; to ensure the co-ordination with the Eurasian Economic Commission, with Belorussian, Kazakh and Armenian sides, in order to reach an agreement on the establishment of a single transit system of the Customs Union and the unified guarantee mechanisms applied for the transit of goods.”

The row began in 2013, when the FCS decided to stop accepting haulier TIR carnets, the UN-recognised scheme for road haulage across international borders and customs regimes which registers each shipment. Despite increasing numbers of countries signing up to the scheme, which has spread from western Europe to the Middle East, Asia and Latin America, Russia was the first major market to unilaterally withdraw, in a decision which reportedly cost Russian shippers some $2.2bn in additional costs.

A Moscow arbitration court ruled the decision “inconsistent with reality”, but the FCS insisted that the carnet was being abused and that the IRU’s Russian branch, the ASMAP, owed it some $580m in unpaid tax – a claim the court said was “derogatory”. The decision led to congestion at borders, including the significant Finnish border.

One source close to the issue said President Putin’s move last month was a good one.“Not many people will choose to ignore an instruction from Putin,” he said.

The IRU was more cautious. Secretary General, Umberto de Pretto, said: “This is of course a very positive development, and additional proof of the increasing importance of the TIR Convention for facilitating and securing trade in Russia, as well as across the entire Eurasian region and beyond. We of course welcome the very clear and decisive instructions given by the Russian president.

“However, considering the lack of further details at this stage, vigilance remains in order as we cannot exclude that practical problems could still occur at border-crossing points in Russia until these instructions are fully implemented.”

The TIR system has been further set back by sanctions imposed by Russia on the transport of fresh food stuffs from the EU into Russia.

Lithuania issued 47% fewer carnets in February, year-on-year, although it saw a slight 7% rise over January 2015. The decrease is in part related to the embargo on foods, reported The Baltic Course, and in part owing to an increase in thorough inspections of Lithuanian lorries since November that has led to customers choosing non Lithuania-registered hauliers.

The TIR also faced a price hike after the Swiss currency surged in January, as the carnet is issued to all associations in Swiss francs.

Speaking to the Focus News Agency, Marek Retelski, head of IRU’s TIR department, said the IRU was looking at finding a mechanism to alleviate the currency problems.

Meanwhile, China is expected to become a full member of the TIR scheme by the end of this year, while countries including Qatar, Brazil, Argentina and Saudi Arabia have all expressed interest in the scheme.

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