Thursday, October 21, 2010

Fly-By-Night Companies Dominate Russian Foreign Trade

The Russian Customs Service estimates that 70% of Russian foreign trade is conducted by "fly-by-night" companies that disappear after a single transaction or within a year after being created. Such companies typically submit false customs declarations for purposes such as grey-market imports or illegal capital export (for example, by declaring non-existent imports or by inflating the value of the imports). The Customs Service believes that grey-market imports increased from 8.6% in 2008 to 12.7% in 2009 because of the financial crisis. Customs lawyer Elena Belozerova contends that fly-by-nights account for only 30% of Russian foreign trade and that simplifying customs regulations will make it more difficult for fly-by-nights to thrive.

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