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President of Russia Vladimir Putin: Mr Pikalev, my best wishes to you and all Customs Service employees on the occasion of your professional holiday.

Head of the Federal Customs Service Valery Pikalev: Thank you very much.

Vladimir Putin: How are you celebrating?

Valery Pikalev: We are celebrating exclusively by carrying out our mission.

Mr President,

Thank you very much for your congratulations; it really means a lot to us. Today marks the 33^rd anniversary of the Federal Customs Service in modern history, even though customs service in Russia dates back over 370 years. On this day in 1653, Tsar Alexei Mikhailovich signed a decree that laid the groundwork for a single customs system in Russia.

Throughout history, the customs service has focused on fulfilling the country’s leadership directives and did so unwaveringly. Speaking of cargo turnover at checkpoints located in international transport and logistics corridors, the eastern direction and the North-South corridor show a steady growth in cargo volumes.

Regarding foreign trade, I would like to note that trade with the friendly countries is expanding which reflects stronger business ties and more stable economy regardless of the sanctions imposed on our country.

In the first nine months, the Russian Federal Customs Service transferred 5.84 trillion rubles to the budget, up 11.5 percent compared to the year before.

Vladimir Putin: What about the plan?

Valery Pikalev: We have a drawdown if we look at the plan. We have seen returns on gas, petroleum, and petroleum products, as well as currency fluctuations. So, we are slightly below target. I think the final numbers will be around 96–97 percent.

In terms of other revenue sources, such as disposal fees, customs fees, and fines, we have seen significant growth, and we have transferred 516 billion rubles to the budget so far.

The risk mitigation system made it possible for us to levy extra customs duties in the amount of over 20 billion rubles, and post-clearance customs audits brought us more than 36 billion rubles.

Our law enforcement units have become more effective with as many as 16.5 tonnes of narcotic and potent controlled substances removed from trafficking operations.

Our goal is to establish an environment where customs activities are objective and transparent, hassle-free for compliant businesses, and eliminate any possibility of unlawful practices.

Mr President, your instruction to reduce the inspection time for freight vehicles at border checkpoints to 10 minutes serves as a performance benchmark for us. In my opinion, we maintain a constructive collaboration with the Ministry of Transport. We have already conducted visits to virtually all checkpoints in the Far East, including Zabaikalsk, Kraskino, Kani-Kurgan, and Pogranichny; in the North Caucasus – Tagirkent-Kazmalyar and Yarag-Kazmalyar; as well as nearly all checkpoints in the north-west and south of our country.

It is evident that the large-scale reconstruction of checkpoints necessitates both significant financial resources and time. However, we are already exploring internal reserves to expedite our customs control operations and are developing measures to reduce processing time in the near future, thereby achieving tangible results.

One such measure involves optimising control at checkpoints through the utilisation of modern technical means. Mr President, I previously reported to you our intention to launch a pilot project for an integrated information system at border checkpoints in October. We have successfully implemented this project at the Tagirkent-Kazmalyar MAC [multilateral automobile checkpoint] on the Russian-Azerbaijani border.

We have established two primary objectives. The first is to integrate data from all technical means and systems at the checkpoint into a unified information network. Secondly, we aim to provide dispatching, analytics, visualisation, and control over the movement of passengers, goods, and vehicles at border checkpoints.

Vladimir Putin: Have you launch operational testing of the advanced equipment?

Valery Pikalev: Yes, we are conducting operational testing at two checkpoints: Zabaikalsk and Tagirkent-Kazmalyar. I will now provide you with an update.

Vladimir Putin: All right.

Valery Pikalev: I would like to highlight that at the Tagirkent-Kazmalyar checkpoint, a high-capacity portal detection system is currently operating in a test mode. We view this as a promising development and are placing significant emphasis on this equipment. We envision such systems as the future foundation for achieving both high-speed control and enhanced security at the border.

Just two weeks ago, we met with the management of the enterprise, the designers of the inspection and screening system.

Vladimir Putin: It’s our domestic equipment, right?

Valery Pikalev: Yes, sir. We have agreed on all interaction issues and on the prospects ahead of us. Based on the results of these few months of operational testing, we had certain comments, we told our colleagues about them, and they responded promptly, in my opinion. As soon as we come to mass production, these issues will be already remedied.

Mr President, your assignment on the supply of mobile inspection and testing systems is being fulfilled. We will receive 10 vehicles by the end of this year, and 24 more in 2025–26, the money has been budgeted, and the manufacturers have confirmed by letters of guarantee that their capacity allows them to produce the vehicles of proper quality within the specified timeframe.

Vladimir Putin: Where do you plan to place and use them?

Valery Pikalev: Mr President, we use them not at check points only. The demand for them is high enough. We receive requests from law enforcement authorities and other agencies, and we help all of them. Just recently, the latest example is the BRICS Summit. Our MISC [mobile inspection and screening ccomplexes] and our teams worked there as well.

We are working to fulfill another of your instructions, namely to provide housing for our customs officers at remote checkpoints in the Far East. I would like to take this opportunity to thank the Russian Ministry of Construction for promptly taking the necessary organisational measures. We have already identified the main managers of budgetary funds, state contractors, and from 2025, next year we will start building this housing. At the end of the program, it [will be] 2027–28, I am sure that our customs officers will be provided with comfortable housing.

Vladimir Putin: It is very important. We must constantly keep this in focus. Many checkpoints are located very far from major centers. Of course, it is necessary for people to have modern civilised living conditions.

Valery Pikalev: Exactly so.

There is one more initiative that I would like you to know about. We managed to complete it this year, in October, in fact. Big thanks go to Finance Minister Anton Siluanov for supporting us.

We replaced 1,353 civil service positions at border checkpoints with an equal number of employees. Now, all our…

Vladimir Putin: You raised their salaries a bit, did you not?

Valery Pikalev: Correct, salaries, guarantees, and everything else. Now, every employee at the border checkpoints is wearing a uniform.

Vladimir Putin: Good.

Valery Pikalev: Mr President, we keep working on digitalising customs operations. Of course, much has been accomplished, but a lot remains to be done.

Today, nearly 100 percent of customs declarations are submitted electronically. Of the total volume, 82 percent are registered automatically, and every fourth declaration is processed automatically.

We have developed a list of key digitalisation projects for the near term, and the list was approved by the Government and the Finance Ministry. We will use these projects to attain the necessary level of customs technology, information security, and import substitution.

Following your directive, in order to increase our information system’s capacity and resilience, we have built the Main Data Processing Centre, which will become fully operational next year.

Vladimir Putin: It is in Tver, correct?

Valery Pikalev: Yes, it is.

As per your instruction, we met with Chairman of Sberbank’s Management Board German Gref and came to an agreement that his team would audit our information system and help us understand what it can do for us in the future considering its architecture, unique features, and the variety of software tools. This area also looks promising for us.

Counteracting cyberattacks and protecting our databases remain our top priorities. Acting on your directive, we have discontinued sharing sensitive information with almost all agencies and have just three of them left. This is a highly sensitive area, and I would like to discuss it in more detail after I finish my report, if I may.

Despite the unlawful Western sanctions, we have managed to establish a constructive dialogue with customs administrations in neighbouring and other countries, and to agree on areas of collaboration and initiatives to simplify customs procedures.

Some landmark events include the Joint Board of EAEU Customs Services, the CIS Council of the Heads of Customs Services, and a meeting of customs heads from BRICS countries.

Vladimir Putin: You met in September?

Valery Pikalev: That is correct.

Vladimir Putin: Were the participants engaged?

Valery Pikalev: Yes, they were.

Mr President, one of our primary objectives is to facilitate the attainment of the goals of the special military operation. We have established a robust collaboration with the Ministry of Defence and the National People's Front to ensure the unimpeded importation of goods necessary for the special military operation. Additionally, we oversee the transfer of forfeited property and voluntary donations

Currently, 130 military operation participants are serving within the customs agencies, and 66 customs officers and 500 of heir immediate family members are positioned at the frontline. We are committed to assisting combat veterans in securing employment and providing them with social, medical, and other forms of support. Recently, 38 veterans of the special military operation, who were not previously affiliated with our service, have joined the customs service.

In my previous report, I indicated that the Ministry of Justice was in the process of approving an order regarding health requirements for individuals seeking employment with the customs service. I am pleased to report that the order has been issued, enabling those who have sustained significant injuries during the special military operation to enter the service. The absence of a limb is no longer an impediment to their work or service in customs. We have already employed one such individual in the customs department in Smolensk.

Vladimir Putin: It is essential to also consider enhancing their qualifications, naturally.

Valery Pikalev: Indeed.

Vladimir Putin: We must train them so that they feel valued as specialists. By all means.

Valery Pikalev: Confirmed, Mr President.

Targeted assistance is being extended to customs officers and their families in the Donetsk and Lugansk republics, as well as in the Kherson and Zaporozhye regions.

Your instruction to staff the Donetsk customs office has been executed. The customs officials who participated in the special military operations since 2022 have been released from military service. A few individuals remain, who are currently being removed from the roll status, and they shall all return to the customs service to commence fulfilling their duties.

Furthermore, in accordance with your decision, which has now been implemented – customs officers in the newly integrated territories have been awarded a salary increment.

Vladimir Putin: 65 percent.

Valery Pikalev: That is correct, the 65 percent increment.

Vladimir Putin: You have been there numerous times, you have actually worked there, so you are aware of the situation. Naturally, we must support the people.

Valery Pikalev: Thank you very much for these instructions.

Mr President, on August 6, the Kursk Region was subjected to an enemy aggression. This tragedy took its toll on our officials as well. Our employees and their families, including 219 children, were evacuated from border areas. Of course, we responded immediately and our entire tight-knit big customs family put together a batch of essential supplies. I will not bore you with the details; all I can say is that every child was provided with everything they needed to pursue their studies, to engage in creative activities, and so on.

Supporting the participants in the special operation and the people residing in the new Russian territories and the border areas of the Kursk and Belgorod regions has remained and will remain high on our list of priorities.

Mr President, we have many plans seeking to improve the customs service operations. Our objective is to make it a powerful and effective public tool, and to change the way the customs service and customs employees are see by the public. We want customs officers to be regarded as honest and highly professional civil servants, and to form a new image of our service on the basis of a full-scale implementation of digital solutions and advanced technologies. I can assure you that every goal set by you will be fulfilled.

If I may, I would like to conclude my report in a slightly informal manner…

Vladimir Putin: Please go ahead.

Valery Pikalev: I reported earlier that, in addition to the new territories, I have been to Kursk Region on several occasions as well, and visited with our employees there. It goes without saying that the Kursk customs officers and their families are true patriots and highly professional employees. During one of my visits there, I went to see the Vorobyov family. The father, Viktor Vorobyov, serves as deputy chief of the Sudzha IACP. His wife and he are raising three wonderful daughters. They are a close-knit family. Despite living under stress, they are holding up well and keep working. Their daughters go to school and do well, too. The eldest daughter, Masha, mentioned in passing that, in the bustle of evacuation, she forgot to take along her guitar. She learns to play it and likes it a lot. We have found and bought exactly the same guitar: same colour, same manufacturer, same everything. I will take it to them at my earliest convenience. Mr President, I have prepared this postcard. Taking this opportunity, may I ask you to write a few words for them, some wishes to the Vorobyov family, and, through them, to all families of our customs officers.

Vladimir Putin: Absolutely. I will definitely do that.

Once again, happy holiday and my best wishes to you and all customs service employees. There is no need to mention how important it is. You perform the fiscal function and the representative function. Your work comprises many complex, but extremely important areas. The country’s economy and, more broadly, the country itself count on the effective operation of the customs service, and I am sure it will like that.

How long have you been in charge of this service?

Valery Pikalev: Five months, Mr President.

Vladimir Putin: I wish you success.

Valery Pikalev: Thank you very much.

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