Russian Customs Law Imperfection Leads to Serious Financial Damage

The Russian budget has lost 500 million rubles due to flawed legal regulations

Because of the imperfection of the Russian customs law, the state lost 500 million rubles as a result of gas deliveries to Georgia. Press service of the Russian Audit Chamber claimed it had come to this conclusion after examining gas deliveries to the former Soviet republic. 

According to the information from the Audit Chamber, in 2002 and in the first quarter of 2003, the company Itera International sold natural gas to several CIS states, including Georgia. The volume of the sold gas made up 37.61 billion cubic meters, more than 90 percent of the gas was extracted in Turkmenistan. The gas transportation system of the Russian giant Gazprom was used for the transit on the Russian territory. During the customs registration of the transit, the company declared the same volumes of gas that had been taken in and out of the Russian customs territory. The declaration totally corresponded to the Customs Code, the press service said.

"However, technical losses often occur when delivering gas through the pipeline systems, which results in a natural loss of the product. In addition, Gazprom used its own gas for technical needs to transit gas by means gas pipelines. As a result of the customs law imperfection and the absence of measures to specify the customs cost of the natural gas delivered on the gas pipeline, the financial losses made up more than 500 million rubles," the press service of the Audit Chamber said.