Moscow police raid Chinese market (people.com.cn) Updated: 2004-02-17 08:46
In the raids that started on
Feb. 9 and culminated on Feb. 12, Russian Interior Ministry agents carted away
large amount of goodsfrom more than 300 stalls rented by Chinese merchants in
the Emila wholesale market in south Moscow.
Russian major ordered Chinese cargo to be hauled
away in a truck
The two-way eight-lane fly-over crossing ring road of Moscow has a span of
100 kilometers and is commonly referred to as the "Big Ring". As Russian economy
is recovering the "Big Ring" is gradually becoming a "gold ring" for
accumulating wealth in recent years. French Auchan, Sweden Ikea and "Turkish
Kangaroo" all have supermarkets lined on both sides of the "Big Ring". Russian
local stores of construction material, furniture, garment and electric appliance
also swarmed in.
Regions near Domodevo (Chinese call it "kitchen god" airport) attract the
attention of investors thank to their convenient communications. Not long ago an
Israeli businessman, who is said to have close relations with the Moscow
municipal government, opened a large market called "Emila" specialized in
storage and whole sales. More than 300 booths were rented to Chinese
businessmen. For this reason many people also refer to "Emila" as the "Chinese
market".
On Feb. 12 a large group of armed Russian policemen appeared at "Emila"
market. The leading one, who appeared to be an officer, presented his ID and
identified himself as a major of Russian Interior Ministry. He said he had come
to investigate a case under the order of Key Case Investigation Committee of The
Interior Ministry. Then with a piece of document he requested booth owners to
show their import goods customs manifests.
As the booth owners couldn't produce the customs manifests, the major
declared on the spot that the Chinese businessmen violated Russian customs law
and decided to confiscate immediately the commodities in the market in pursuant
of law. This was actually a designed action. Lots of big trucks loaded with
containers and many loaders had been waiting outside the market for a long time.
On hearing the order the loaders threw the merchandise of the Chinese
businessmen onto the trucks without listening to their protests.
Chinese businessmen lost $30 million: Chinese
Embassy requests an explanation
The confiscation action carried out by Russian Interior Ministry on "Emila"
market brought serious economic damages to Chinese businessmen. According to
preliminary statistics the value of the confiscated goods is estimated at about
US$30 million.
All the Chinese businessmen in "Emila" market are farmers from Zhejiang and
Fujian provinces and the commodities they were selling were products of local
township enterprises. It is no overstatement to say that once their commodities
were confiscated it is not only them who would lose means of livelihood their
hometown economy would be affected as well. Being in a foreign country and faced
with armed police these minor businessmen were suddenly at a loss of what to do.
Like most Chinese citizens they turned to the Chinese Embassy in Russia.
On receiving a pleading call from these businessmen, Guo Min, councilor of
Chinese Embassy in Russian, together with some consuls went to "Emila" market in
a car to negotiate with the police. Chinese officials required that the police
act in accordance with the law and the confiscated commodities not to be
arbitrarily sold, auctioned or lost. They also advised the Chinese businessmen
to make lists of their commodities and go through necessary procedures.
On Feb.13, Liu Guchang, Chinese Ambassador to Russia, held an emergent
meeting discussing ways of protecting the interests of Chinese businessmen. The
Embassy presented notes to the Russian Foreign Ministry and the Ministry of the
Interior during the night requesting that Russia, in the interest of the
friendship between China and Russia, would urge its concerned departments to
protect the interests of Chinese businessmen in Russian with practical and
effective measures, that it stop taking away and return all the commodities of
Chinese citizens confiscated by the police. The Embassy is still negotiating
with Russia and doing its best to safeguard the interests of Chinese citizens.
Without giving customs clearance tax police picks
on Chinese businessmen
The fact that Chinese businessmen at "Emila" market couldn't produce import
goods customs clearance doesn't mean that these businessmen had engaged in
smuggling or evaded Russian customs tariff. The origin of the event must be
traced back to the so-called "gray customs clearance" practice.
Following the unraveling of USSR at the beginning of the 1990s Russian
economy plunged into serious crisis. Markets of everywhere including the capital
Moscow were short of supply. To meet the everyday life demand of a people who
lacked money the Russian government had to import many commodities.
Consumer goods from China, though not of high-grade, were of good quality and
cheaper. The Russian people were willing to use and also could afford them.
Therefore a great deal of Chinese goods flew into Russian market. Many Russians
and foreign speculators carried on their back import goods from China to Russian
as travelers. Some businessmen who were engaged in big transactions also failed
to register a company in Russia. According to the law these businessmen were not
qualified to engage in importing. However, to encourage importing and simplify
the customs procedures the Customs Committee of Russia allowed so-called
"customs clearance" company to carry out importing transactions for commodities
owners and provide the "one stop" service which combined transportation and
customs clearance.
Customs clearance company usually have close relations with the Russian
Customs and strong backing from powerful figures. They get many favorable
policies from the Russian Customs, among which fixed amount of duty for per
cargo is the most important. In other words the Customs exempted clearance
companies from the practice in which regular customs clearance require that duty
be computed according to the value of each commodity. Instead an overall duty is
estimated according to the weight or volume of the commodities contained in an
airplane, a train or a container. The amount of duty thus calculated is, of
course, much lower than the duty if paid in regular customs declaration.
Normally clearance companies would not supply customs clearance manifests and
are only responsible for withdrawing commodities from the Customs-supervised
warehouse and sending them to the owners' storage. After this clearance
companies are no longer responsible for the follow-up even if the tax police
pick on the owners. People commonly refer to these businesses as "gray customs
clearance".
Due to various reasons Russian has failed to ban this irregular trade
practice. Apart from the trade with China this practice is widely used by Russia
in its trade with countries like Turk, South Korea, Spain, Italy and Germany.
Chinese Embassy in Russia cautioned concerned Chinese companies that the
practice of fixed duty transportation such as "fixed amount of duty for per
cargo" was formed in the course of history. It is an irregular trade practice
between China and Russia, the risk of which is very high. In the past few years,
the aggressive departments of Russia made several raids on Chinese commodities
and confiscated them, which brought about great damages to Chinese businessmen.
