How to export from Russia
Step 1. Decide on the country you are going to work with
Learn which country is more profitable to deliver the goods to. Explore products on local websites and major marketplaces. This is an easy way to get to know your competitors and understand the pricing policy for your product group. Pay attention to the form in which the product is presented: materials, packaging, configuration, and other parameters. Study the tastes of your future customersand the peculiarities of the country’s mentality, so you will understand whether you will have to adapt the product.
Step 2. Study the legislation of both countries
Processing documents in order to comply with the laws of both the Russian Federation and the country of a partner is an additional cost and time, and it must be taken into account.
For a successful transaction, you must:
- formalise and draw up a contract and other documents properly;
- mark the cargo;
- perform customs clearance of the export and deliver the goods to the buyer.
The list of required documents depends on the country.
But here are the necessary documents:
- international contract confirming the existence of obligations for the supply of goods and cargo with the available annexes and specifications to the export contract;
- passport of the transaction if the transaction amount exceeds $ 50,000;
- CMR in 6–12 copies. The specific type of transport documentation is determined according to the criteria of the recipient country and the transport category;
- packing list, which contains information about packing of goods clearance, weight, net and gross, loading areas, depending on the size, 6–12 copies;
- licensing documentation on exports: certificates, licenses, etc.;
- document confirming payment of customs fees, duties, and taxes, including VAT. It is, generally, a payment order;- documentation on goods' origin and belonging to the shipper;
- invoice in 6–12 copies. This is a payment invoice that specifies:
- data of the seller and the buyer;
- the cost of a unit of goods and the entire batch;
- number of products;
- bank details;
Customs Declaration. This document contains complete and accurate information about the cargo, the customs regime, and the type of transport on which the goods are transported.
It must contain:
- country of origin;
- information about the transport on which the goods are transported;
- name of the customs procedure;
- type of
cargo-goods;- weight of cargo;
- purpose of import or export;
- information about a foreign trade transaction;
- data of the declarant and the customs representative;
- details on supporting documents.
Remember that when exporting, the VAT rate is zero, but you still need to confirm this with documents by sending them to the tax service. You will need a contract with the buyer and a delivery document. Its type depends on the destination country. If you deliver to the EEU countries, you need an application for the import of goods and payment of indirect taxes: the buyer in his country fills them out. Your partner receives a tax mark and sends it to you. If you deliver your goods outside the EEU, you need a customs declaration.
Step 3. Think through the logistics
Estimate the time and cost of delivery to the country. You can provide the logistics organization to the buyer: then the seller only ships the goods from a warehouse in Russia, and the buyer delivers it on their own or through a logistics company. Transport documents are necessary for the carriage of the goods and confirm that they were accepted for transportation from the seller. The type of document depends on the delivery method.
If the delivery is carried out:
- car, then you need an International consignment note, CMR.
- sea, then a Bill of Lading is required.
- rail, then an international Railway Waybill is required.
Step 4. Find a buyer
You need to find a buyer abroad. However, it is not the most challenging stage in the entire export chain.
Step 5. Conclusion of contracts and selecting the payment form
The more detailed you describe the terms of the transaction in the contract, the fewer difficulties will arise when exporting. Even the most insignificant details should be discussed and fixed in advance.
The parties are the seller of the goods and the buyer. In some cases, there is an intermediary in this chain. For example, you do not sell goods directly but to a cargo terminal or logistics company.
You should mention the subject of the transaction in the contract. This is what you sell. The contract must specify and describe the product and its characteristics:
- product name;
- product type;
- material of manufacture and characteristics;
- the purpose of the product.
It would be better to describe the product in as much detail as possible. This will allow you to assign it the correct code in the consignment note of foreign economic activity and save from problems with a potential buyer and customs.
The contract must specify the quantity of the product, its weight or volume, and packaging.
The information specified in the contract must correspond to the actual size of the delivery. An extra unit of goods in the batch can turn into a problem with customs
Specify the cost of one unit of the product and the entire batch as a whole. It is essential to specify the details of the transaction payment in the contract:
- the currency in which the product will be paid for;
The contract must specify the following payment terms:
- procedure for making payments;
- availability of prepayment or payment’s delay;
- the procedure for returning advance payments in case of failure of the transaction;
- show the payment is made.
It is necessary to agree on the terms of delivery even before drawing up the contract. International commerce terms (Incoterms) are eleven generally accepted terms, abbreviated by the first three letters, that regulate the international supply of goods. Application of these rules:
- establishes the rights and obligations of the seller and the buyer in foreign trade;- defines responsibilities of the parties;
- defines the risks associated with the delivery of the cargo.
Group «E»- the EXW delivery condition, according to which the seller only makes the goods available to the buyer at its premises; then group «F» — the FCA, FAS, and FOB delivery conditions, according to which the seller is obliged to transfer the goods to the carrier specified by the buyer; then group «C» — the CFR, CIF, CPT, and CIP delivery conditions, according to which the seller is obliged to conclude a contract of carriage, but without assuming the risk of loss or damage to the goods or additional costs due to events that occurred after shipment and dispatch;and finally, group «D» — the terms of delivery of DAP, DPU and DDP, under which the seller must bear all the costs and risks necessary to deliver the goods to their destination.
Indicate the time of shipment and the time of delivery of the goods to the buyer. It is best to link the delivery time to the time of receipt of the prepayment. This is the safest option for the exporter. The duration of the contract is usually one year, but it is always necessary to make a note «until the parties fully fulfill their obligations.
If you work without prepayment, then terms of acceptance of the goods should be prescribed separately. For example, specify the percentage of possible defective goods in the shipment and other possible situations. So the buyer will not be able to avoid paying for the goods.
Be sure to specify the ways to resolve disputes in the contract.
Describe the details and contacts of the parties:
- country and city;
- company name, position, full name;
- phone number, an email address.
- the name of the bank with its contacts.
All business correspondence should be saved because this can help in resolving possible disputes.
If you export the product to Europe, then it must have a special marking. The rules of the EU countries establish that the following information must be indicated on imported products:
- information about the manufacturer;
- information about the seller in the EU;
- expiration date;
- composition or material;
- method of application;
- safety precautions.
This information must be provided in the language of the importing country. Sometimes it also needs to be duplicated in another language.
It is also worth clarifying what specific requirements for labelling are established in each country.
Some products that are sold in Russia must be marked with special Data Matrix codes. This applies even to the products that will be exported.
- alcoholic beverages;
- tobacco products;
- photo equipment;
- car tyres;<
- home textiles;
Information about mandatory labelling is also included in the export declaration. This is necessary for the Russian customs to allow the export of goods.
Step 6. Currency control
Currency control is a set of measures that the state takes to ensure compliance with currency legislation and the legitimacy of foreign exchange transactions. Currency control in Russia is provided by the Russian Federation’s Government and the Central Bank of the Russian Federation. Other authorized Russian banks also act as currency control agents.
Passing the currency control is mandatory for all foreign trade participants. It is regulated by the Federal Law «On Currency Regulation and Currency Control».
To carry out foreign economic activity, it is necessary to open a settlement account in the contract currency. The current legislation provides for the need to register an export contract for the purposes of currency control.
The need for transaction’s registration depends on the amount of the payment:
- the amount is less than 200 thousand rubles, the provision of documents confirming the transaction is not required;
- the amount is from 200 thousand to 6 million rubles, the control is carried out in a simplified manner;
- the amount exceeds 6 million rubles, there is a mandatory registration and complete currency control procedure.