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President of Russia Vladimir Putin: Mr Pikalyov, good afternoon.

I would like to note at the beginning of our meeting that the Federal Customs Service is fulfilling its task. In the first half of this year, tax collections and payments amounted to almost 500 billion rubles more than during the same period last year. The effectiveness of customs control is growing, automation and throughput are increasing, including through the introduction of digital technologies.

Mr Pikalyov, how do you assess the prospects for the next six months?

Head of the Federal Customs Service Valery Pikalyov: Mr President,

In reviewing the outcomes of the first half of this year, we are pleased to report that the Federal Customs Service has successfully achieved all objectives outlined by you and the Russian Government.

These efforts were primarily focused on creating conditions for increased foreign trade turnover through the digitalisation of customs processes and the implementation of advanced technical solutions across all customs clearance stages. Additionally, improvements were made to increase the efficiency of fiscal and law enforcement functions, along with providing comprehensive support to the Ministry of Defence and the military-industrial complex in their assigned tasks.

Regarding the administration of customs payments, I can provide the following update. In the first half of the year, revenues amounted to three trillion 361 billion rubles. During this period, the effectiveness of customs control has improved significantly, resulting in the recovery of 11 billion rubles through the risk management system. Post-clearance control of goods contributed nearly 25 billion rubles in revenue.

I want to note the efforts of our mobile customs teams, which have become increasingly pivotal and effective in our operations. They have identified nearly 4,000 vehicles and approximately 49,000 tonnes of goods transported with violations.

Our law enforcement unit has been active as well. As of now, approximately 1,200 criminal cases and 83,000 cases of administrative offenses have been initiated.

Mr President, the service continues full-scale digitalisation in order to create conditions for an increase in foreign trade. Building intelligent customs is our strategic vector. Our main task is to create a comfortable environment for conducting fair business.

Digital technologies are being introduced both when passing control at checkpoints along the border, and at customs authorities within the country. Of course, when organising the work of checkpoints, we aim to fulfil the task you set us, i.e. to reduce the standard inspection time for cargo transport at the border to 10 minutes.

While renovating the checkpoints, we have taken organisational measures to promptly unload the border territory. The points for arrival and departure of goods have also been established, and the work schedule of several customs posts has been changed: some have been transferred to round-the-clock operation, while others to an increased operating schedule. The capacity of checkpoints has been increased due to the opening of additional traffic lanes and other measures.

Until the overall renovation is completed, we plan to create an smart assistant in our information system for foreign trade participants and ordinary citizens to receive feedback with a single entry point; to expand online interaction within the system of interdepartmental electronic interaction with Rostransnadzor, Rosselkhoznadzor, and Rospotrebnadzor starting this August; and to carry out the pilot implementation of an integrated system of checkpoints at the Tagirkent-Kazmalyar MAC [multilateral automobile checkpoint] together with the Ministry of Transport and Rosgranstroi in October. That is, we plan to combine weight control, inspection systems, and video surveillance into a single system in order to reduce the time of customs operations.

We are taking an active part in the introduction of an electronic queuing system. Today, it is already active at the Zabaikalsk, Chernyshevskoye, and Bugristoye international checkpoints. We propose further extending this practice to Tagirkent-Kazmalyar and Pogranichny.

We are developing the use of inspection systems [IS]. Today, this is the most advanced and effective technical means of control. We have only 73 ISs in our inventory, 57 of them are mobile. We have been allocated additional funds for the purchase of new mobile ISs to execute your decision, and the customs authorities will have 12 new vehicles by the end of the year.

We consider mobile ISs a promising means of control. Their use will allow for fairly quick, non-stop scanning of vehicles, which will also reduce the time required to complete customs procedures.

The service continues to upgrade automatic customs technologies in the main customs clearance areas. Certainly, we cater to foreign economic operators, while conducting this work. We have already digitalised a considerable part of in- house customs clearance processes, most declarations are submitted online, and we actively use automatic registration and automatic issue technologies with regard to them. On the whole, one can say that about 90 percent of all declarations are issued over a period of four hours.

Mr President, assistance to the Armed Forces of the Russian Federation ranks among the service’s main priorities. We have started providing urgent customs clearance for enterprises of the defence industry and the Defence Ministry.

This month, I visited the Donetsk and Lugansk customs facilities. We spoke with service personnel and their families about problems now worrying them. Certainly, we have noted all these issues, and we will resolve them in the near future.

The Russian Federal Customs Service has started offering career guidance and employment services to participants in the special military operation. Quite soon, we will modify our in-house order and lower health qualification requirements for a certain category of those involved in the special military operation, so that they would have more opportunities for joining the Federal Customs Service of the Russian Federation. We will issue this order in the near future.

Mr President, at the end of my report, I would like to say that we will always accomplish your objectives on time.

Vladimir Putin: Mr Pikalyov, I instructed the Government to build housing for customs officers, primarily in the Far East. What is happening in this respect? As far as I understand, there are certain delays with the allocation of funding. What is the situation like today?

Valery Pikalyov: Yes, Mr President. I have visited the Far East, including Kraskino and Pogranichny. I realise the great significance of this aspect and the need to build housing for customs officers as soon as possible, so that we could employ professional staff members and accomplish our tasks.

The budget currently stipulates 3.6 billion rubles, but it is so far unclear who will disburse budgetary funding. I hope that we will reach consensus in the near future, and that this issue will be resolved.

Vladimir Putin: All right. We will now discuss this matter in greater detail.

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