The matter in brief
How it went
The situation. A Russian company needed to buy and import production equipment from China. The client had no experience of currency control or of customs clearance for deliveries of this kind.
What we did. We agreed the contract terms with the Chinese supplier, supported the transaction through the currency control requirements, arranged customs clearance and coordination with logistics, and saw the project through to installation of the equipment at the client’s site.
The result. The equipment was imported and installed without breaches of currency or customs law, and the whole delivery cycle took 5 months from signing the contract to start-up.
A similar situation? Let us discuss the details at a consultation.
What governs the import of equipment from China
The supplier contract. The basis of the transaction is the supply contract, to which, by default, not only Russian law applies but also the 1980 UN Convention on Contracts for the International Sale of Goods (CISG); Russia and China are both parties to it. The Incoterms, the payment currency and the moment title passes determine who bears the risks at each stage of delivery.
Currency control. Settlements under a foreign trade contract fall under Federal Law No. 173-FZ on Currency Regulation and Currency Control. The bank through which the payment passes acts as a currency control agent and may request the contract, the documents on the import of the goods and explanations of the particular transaction.
Customs clearance. Import is processed under the EAEU Customs Code and Federal Law No. 289-FZ on Customs Regulation in the Russian Federation. This means classifying the goods under the TN VED nomenclature, calculating and paying duty and VAT and, where necessary, placing the goods under a customs procedure other than release for domestic consumption.
The technical regulation. A significant share of industrial equipment falls under Customs Union Technical Regulation TR CU 010/2011 on the Safety of Machinery and Equipment and requires a declaration or certificate of conformity before or during import. Without it, customs may refuse to release the goods.
What governs the transaction:
How a delivery usually runs, from contract to installation
Below is the typical logic of a project, not a rigid timetable: the exact timing and set of steps depend on the type of equipment and the supplier’s requirements.
Agreeing the contract
We fix the Incoterms, the payment currency, the acceptance procedure and the parties’ liability. The wording of this section determines whether the payment passes currency control without unnecessary questions from the bank. Usually 1-3 weeks.
Currency control at the bank
We register the contract with the authorised bank where the amount of obligations exceeds the set threshold, and clarify in advance the list of documents the bank will require for each payment and for the import itself.
Customs declaration
We determine the TN VED code, calculate the duty and VAT, and check whether a declaration or certificate of conformity is required under the technical regulation for the particular type of equipment.
Logistics and release of the goods
We coordinate the customs broker and the carrier and monitor the cargo’s temporary storage period at the warehouse, so as to avoid extra costs from delayed clearance.
Installation and acceptance
We support the final stage: installation of the equipment at the client’s site and signing of the acceptance certificates, including the warranty service terms agreed in the contract.
Time limits and thresholds to know in advance
General benchmarks under the current regulation. We clarify the exact terms for a particular transaction at a consultation.
Common mistakes when importing equipment from China
Paying under the contract without registering it at the bank. Companies often assume it is enough to pay the supplier’s invoice and do not register the contract with the authorised bank, although the obligation arises once the amount of obligations exceeds the threshold. As a result, the bank blocks the payment, or grounds for a fine arise after the money has already gone.
Wrong classification of the equipment under the TN VED. The duty rate and the need for certification depend directly on the commodity code, and complex production equipment can often be classified in several ways. An error in the code results in additional duty and VAT being assessed after the goods have been released.
No declaration or certificate of conformity. A significant share of industrial equipment falls under the technical regulation on the safety of machinery and equipment and requires declaration or certification before import. Without it, the goods will not be released by customs, or the supervisory authorities will raise claims later.
A contract without clear warranty and acceptance terms. A contract with a Chinese supplier on a standard template often fails to set out the procedure for warranty repairs, the supply of spare parts and acceptance at the site. If the equipment breaks down, it is much harder to recover anything from the supplier in that case.
How we usually support equipment deliveries from abroad
We run the transaction as one process, not separate stages. The lawyer working on the contract keeps the currency control and customs clearance requirements in view from the very start of negotiations with the supplier, rather than joining the matter only when problems arise with the bank or customs.
Before the contract is signed, we check the Incoterms, the payment currency and the settlement procedure against the requirements of currency legislation, so that the agreed payment scheme does not give the bank grounds to refuse the payment.
We coordinate the customs broker and the client’s logistics company, because a significant share of problems in importing equipment arise not in the text of the contract but at the junction between declaration, certification and the actual delivery of the cargo to the installation site.
What our support includes:
Frequently asked questions
Does the import of equipment from abroad need to be declared to the tax authority?+
Yes, this is a separate procedure of customs declaration and currency control, and we support it in full as part of the transaction.
How do I choose between international arbitration and a state court for a dispute with a foreign partner?+
Arbitration is usually preferable for cross-border disputes: an award is easier to recognise and enforce abroad, unless the contract originally provided for a different jurisdiction clause.
Is this a real case or a generalised example?+
It is a real matter from the firm’s practice. We publish it without company names or the names of the participants, as every client agreement includes a non-disclosure clause.