For the first time in the modern history of Russia, the Prosecutor General’s Office have publicly reproached its own department for wrongfully pushing the largest unit in the Russia’s Federal Customs Service, or FCS, its Northwest Directorate. A prosecutor responsible for supervising shipment of goods and traffic in the North West of Russia wanted to shove aside the head of the customs authority that run the Baltic Customs. Earlier prosecutors prevented customs officials from prosecuting a business owner for smuggling.


Please, stop checking the customs

A few weeks ago deputy prosecutor general of Russia Aleksandr Buksman sent a memorandum to northwest transport prosecutor Aleksandr Chubykin, which had a title It Is Inadmissible For Public Prosecutors To Interfere In The Work Of The Customs Without Good Reason. In the memorandum Buksman, the second person after Russia's prosecutor general, explains to his high-level subordinate what the latter has to know like the back of his hand.

Aleksandr Buksman reminded his subordinate of the obvious. The FCS Northwest Directorate is entitled by law to run the Baltic Customs in St Petersburg and supervise the customs proceedings.           

The reason why the deputy prosecutor general sent the memorandum was the alert that came from a unit within the FCS Northwest Directorate, claiming that local prosecutors tried to forbid members of the working group to supervise the customs formalities at the Baltic Customs.

After the FSC control commission recently found multiple violations of customs proceedings at the Baltic Customs, Russia’s central customs authority ordered its northwestern branch to form the working group to prevent further violations. The move was successful, and the collected customs duties increased.

It has emerged that the northwest transport prosecutors were dissatisfied with the results working group of the FCS Northwest Directorate showed. Why? Dissatisfied, and that was it. In July 2011 the prosecutors, supervising transport and shipment of goods, demanded the working group stop controlling the customs proceedings. Despite not having facts of breaching the law by the members of the working group, the prosecutors decided to put an end to its activities.

To make a long story short, the prosecutors wanted the group stop doing the work it had been installed for.

The prosecutors might find it difficult to understand why the superiors exercise control over subordinates, but if we use common sense it becomes obvious that it is the way the things work. 

No surprise that the memorandum of the deputy prosecutor general ended with the following words, “I emphasize that it is not allowed to make such demands and advise you to strengthen control of your own subordinates”.

Let us found out, what made the transport prosecutors of the northwest of Russia demand such unconventional things from the customs officials?


Favourite Metalinvest

These events happened a year ago. In December 2010 the northwest transport prosecutors began sending multiple warnings notes to the Baltic Customs. The customs were snowed under the documents, warning the customs officers against “possible violation of law” or asking them to “eliminate transgressions”.

There were a lot of warning notes, but all of them referred to the same company, Metalinvest LLC, which is a part of Khors Group. Prosecutors concerned themselves with the legality of implementation of the customs law towards this company.  

Metalinvest bought German equipment for blending dry semi-processed materials. Two containers with the shipment of the company arrived by sea freight. Passing the goods through the customs, Metalinvest stated that the price of the goods was 120,000 euros. However, investigative department of the Baltic Customs found out that the true price of the cargo was 800,000 euros.

The customs officers opened a criminal case under Article 188 of the RF Criminal Code that is smuggling. The containers were arrested and placed in a temporary storage. For prosecutors it would have been more logical to hail the actions of the customs officers. Smuggling prevention is an integral part of state economic security strategy.

But the northwest transport prosecutors had another point of view. Multiple warnings, which they sent to the Baltic customs, said that the customs officials had no right to take measures against Metalinvest. The actions of the customs officials, the prosecutors claimed, were illegitimate.

Reading these documents, one stumbles upon prosecutors’ unexpected concern for Metalinvest. One of the warnings said, “each day of keeping the goods in the storage… brings additional expenses to the company in the sum of 3,000 roubles… Metalinvest will be charged over 90,000 roubles [$3,000] for keeping two containers”.

It is the first case ever when the prosecutors take care of the “expenses” of a small private company.

The prosecutors’ letters went to the Baltic Customs, Northwest Customs and event to a private company, operating the storage, where the containers of Metalinvest had been placed. Top prosecutors, including northwest transport prosecutor Chubykin, deputy transport prosecutors of Saint Petersburg Titov and Zatochkin, showed righteous indignation at the customs officials.

The concern of three local prosecutors for the cargo, belonging to a private company, surprised the prosecutor general, who ordered his deputy Buksman sent a memorandum to Saint Petersburg. However, Buksman’s memorandum, quoted at the beginning of this article, had a peculiar effect on the transport prosecutors.


'Take the case materials and study'!

Having received the memo, Aleksandr Chubykin, northwest transport prosecutor, signed a decree, saying, “in order to improve and better organize the control over law implementation… customs control department is authorized to reclaim and study the criminal cases… for elimination of violations of customs rules”.

Chubykin authorized Igor Zaitsev, first deputy northwest transport prosecutor, to supervise the execution of the decree. Zaitsev is rumoured to lobby for the interests of Metalinvest.

It is difficult to say why the northwest transport prosecutors were unable to “study” the files of criminal cases, which was their duty, but they indeed did not study them before Chubykin’s order. What happened next? We assume that prosecutors should have taken materials of criminal cases and scrutinized it in order to secure rights and interests of all participants of international business.

Not at all!

The customs control department, engaged for the task by Chubykin’s order, intimidated the customs officials by opening cases against them.

Prosecutor Galushka, which serves in the office of the northwest transport prosecutor, opened a new probe into the Baltic Customs, half a year after the probe, opened by head of the FCS Andrei Belyaninov that had revealed a few violations of the customs regulations. Transport prosecutors of Saint Petersburg were authorized to conduct the probe. They initiated 5 criminal cases under the Article 293 RF Criminal Code that is “negligence”.

The prosecutors invented new type of offence as if they were lawmakers.

An officer of the Baltic Customs cleared a shipment a year ago. The declared price of imported goods was much lower than its true price. The FCS probe found out that the price was underestimated and that the state did not receive its duty. After the probe a businessman, who owned the goods, repaid the rest of the duty.

However the officer, who cleared the shipment, committed an offence. That is why the criminal cases against them were opened, the prosecutors claim.

From legal point of view, it is absolute nonsense. In Russian legal system, “negligence” implies damages infringed on the state. However, the state collected all the arrears.

The prosecutors stepped over Russian law and have already opened 5 cases. The suspect in one case is Ms Bogdanova, a customs officer and daughter of the head of personnel department of the Baltic Customs Aleksei Bogdanov.

Memorandum of deputy prosecutor general Aleksandr Buksman has been ignored by transport prosecutors in Saint Petersburg, who continue solving the problems of Metalinvest.