22 January 2024

International Supply Documents & Foreign Trade in Russia

Anna Ivanova, Attorney at BRACE Law Firm ©

January 22, 2024

As many lawyers note, working with foreign counterparties is a daily reality for Russian business. Imported goods, machinery, and equipment enter Russia from abroad under foreign trade contracts. Subsequently, domestic companies must settle their obligations and "legalize" the goods within the territory of Russia. However, if the documentary support for the transaction is flawed, the firm will face numerous problems regarding both payment and customs clearance [1].

One must also note the vast number of diverse permit documents required to support a foreign economic transaction and successfully pass customs control. The frequent duplication of information contained therein primarily hinders customs control over goods subject to technical regulation, as well as veterinary, phytosanitary, and sanitary control [2].

Currently, within the framework of Russian and EAEU legislation, several legal acts have been adopted aimed at unifying the requirements for documentation accompanying transactions. Furthermore, attention should be paid to several documents accompanying foreign economic transactions that are recognized worldwide.

In this article, we will endeavor to determine which documents are necessary to support foreign trade transactions (primarily using the examples of supply contracts).

Foreign Trade Contract

The primary document confirming the existence of a legal relationship between the parties is the foreign trade contract. This specific document is essentially designed to "link" the entire document flow between the parties to the transaction.

It is extremely important that the transport, payment, permit, and other documents drafted to accompany an international supply do not contradict the requirements of the contract. This includes requirements regarding the basis of delivery (Incoterms), the procedure for verifying the quantity, completeness, and quality of the supplied goods, and the procedure for allocating the risk of accidental loss and other risks between the buyer, supplier, and carrier.

In addition to these requirements, it is vital to determine the law applicable to the foreign trade contract, as well as the procedure for dispute resolution and their jurisdiction. When determining the jurisdiction for disputes, it is also recommended to review the practical implementation of enforcing court decisions in a particular state.

Primary Accounting Documents and International Supply Transactions

According to Art. 9 of Federal Law No. 402-FZ dated December 6, 2011, On Accounting, every fact of economic life must be documented by a primary accounting document. A primary accounting document must be drafted at the time the fact of economic life occurs, or if this is not possible, immediately after its completion. The person responsible for documenting the fact of economic life ensures the timely transfer of primary accounting documents for the registration of the data contained therein in the accounting registers, as well as the accuracy of such data.

In practice, primary accounting documents are used within the framework of accounting. For private organizations, their forms are free-form and are approved by the head of the company. For budgetary organizations, the forms are established in accordance with budgetary legislation.

At the same time, organizations of any form of ownership must draft primary accounting documents with the following mandatory details:

document title;
date the document was drafted;
name of the economic entity that drafted the document;
content of the fact of economic life;
value of the physical and (or) monetary measurement of the fact of economic life, indicating the units of measurement;
title of the position of the person(s) who performed the transaction or operation and who is responsible for its documentation, or the title of the position of the person(s) responsible for documenting the event that occurred;
signatures of the persons provided for by Clause 6 of this part, indicating their last names and initials or other details necessary to identify these persons.

It is prohibited to accept documents for accounting that record facts of economic life that did not occur, including those underlying sham or simulated transactions.

For instance, in judicial practice, the identification of facts where documents were submitted for accounting without the actual execution of transactions may serve as a basis for the tax authority to assess unpaid or underpaid taxes.

In one case, a court established that, considering the results of tax control measures, documents drafted between a taxpayer and its supplier (a first-tier counterparty) were formal and not accompanied by real economic operations with the goods. The supplier did not conduct activities resulting in the generation of non-ferrous metal scrap, and the accounting of its own suppliers (second and subsequent-tier counterparties) did not reflect any operations with non-ferrous metal scrap. Furthermore, the taxpayer's supplier lacked its own resources to execute the transaction, as it did not have sufficient staff, storage areas, or specialized equipment and inventory. The reality of economic operations for the acquisition of scrap from this supplier was also not confirmed by the testimony of witnesses (the taxpayer's employees) interviewed by the inspectorate. In this situation, the courts recognized the tax authority's conclusions regarding the taxpayer's underpayment of VAT and corporate income tax as justified [3].

The Russian Treasury also indicates that in 2021–2022, a regional operator and recipients of regional budget funds allowed the expenditure of funds by accepting for accounting and paying primary documents (KS-2 certificates of acceptance of work performed) containing volumes of work that were not actually performed [4].

Despite the fact that primary accounting documents may be drafted in a free form subject to the requirements for mandatory details (except for budgetary organizations), the majority of economic entities use budgetary reporting forms for state institutions and authorities, accounting reporting forms for budgetary and autonomous institutions, and forms of primary accounting documents and accounting registers for institutions. Their forms are listed in the All-Russian Classifier of Management Documentation (OKUD), which is an integral part of the Unified System of Classification and Coding of Technical, Economic, and Social Information and covers unified documentation systems and document forms authorized for use in the national economy. Examples include the certificate of acceptance and transfer of non-financial assets (OKUD 0504101), the invoice for internal movement of non-financial assets (OKUD 0504102), the invoice for the release of materials (material assets) to a third party (OKUD 0504205), the payroll sheet (OKUD 0504402), the cash receipt voucher (Unified Form No. KO-1) (OKUD 0310001), the cash disbursement voucher (Unified Form No. KO-2) (OKUD 0310002), and others.

Within the framework of supplies, the following forms of primary accounting documents are used:

certificate of acceptance of goods (Unified Form No. TORG-1);
certificate of established discrepancy in quantity and quality upon acceptance of imported goods (Unified Form No. TORG-3);
specification (Unified Form No. TORG-10);
consignment note (Unified Form No. TORG-12);
universal transfer document.

In international supplies, these documents are also important for documentation purposes in tax and accounting records. Often, questions arise as to which documents are sufficient for documentation. For example, in which cases is it sufficient to draft a TORG-12 consignment note, and in which cases is a CMR international consignment note required?

According to the explanations of the FAS Russia regarding supplies between Russia and the Republic of Belarus: In accordance with the Instructions for filling out the CMR international consignment note, approved by Resolution of the Ministry of Transport and Communications of the Republic of Belarus No. 23 dated June 24, 2004 (the "Resolution No. 23"), the CMR international consignment note (the "CMR note" or "CMR") is used by all legal entities regardless of their form of ownership and individual entrepreneurs of the Republic of Belarus when performing international road carriage of goods starting from the territory of the Republic of Belarus. When shipping goods from the territory of other states, the CMR note approved by Resolution No. 23 or the CMR note of the sender's country may be used. When goods are removed by the buyer's own transport due to the absence of a contract for the carriage of goods, other documents, specifically the TORG-12 consignment note, are used to ensure accounting and warehouse records of the movement of goods [5].

Thus, if the Russian buyer's goods are not brought into the territory of Russia by the buyer's transport vehicle, it is necessary to draft both a CMR and a TORG-12. This is because the CMR is effectively a transport document, while the TORG-12 confirms the transfer of the goods.

Effectively, TORG-12 is a primary document and is necessary for writing off property from the balance sheet. A primary document is drafted at the time the fact of economic life occurs or immediately thereafter. In TORG-12, the fields "goods released by" and "goods accepted by" are filled in. Therefore, if property is transferred to a carrier or forwarder, it is logical that the TORG-12 and CMR should be dated the same [6].

In the opinion of the Ministry of Finance, the date of shipment (transfer) of goods (works, services) or property rights for VAT purposes is the date of the first primary document drafted for their buyer (customer) or the carrier for delivery of the goods to the buyer [7].

In addition to disputes regarding the necessity of drafting a particular document, organizations may question whether primary accounting documents can be drafted in a foreign currency if settlements with buyers (customers) are made in rubles. According to tax authorities, when supplying goods (performing work, rendering services) the value of which is expressed in a foreign currency or conventional units but is subject to payment in rubles, one should consider the opinion of the regulatory authorities, according to which drafting primary documents in currency or conventional units is improper. If settlements under a contract are made in the territory of the RF in rubles, the goods (works, services) must be accepted for accounting by buyers (customers) on the basis of primary documents in which the value is indicated in rubles [8].

Consequently, in addition to several documents related to international supply which will be considered further, special attention for accounting and tax purposes should be given to primary accounting documents, as drafting various transport documentation in most cases does not exclude the necessity of drafting primary accounting documents.

Accompanying an international supply effectively requires the preparation of transport documents, documentation confirming the transfer of goods, documents confirming the origin of goods, and the foreign trade contract itself. Next, we will examine these documents in detail depending on their types.

Transport Documents for International Supply

As a general rule under Part 2 of Art. 785 of the Civil Code, the conclusion of a contract for the carriage of goods is confirmed by the drafting and issuance of a consignment note (a bill of lading or another document for the cargo provided for by the relevant transport charter or code) to the sender of the cargo.

Cargo is transported by road, water, air, and rail. We will consider the main documents that accompany the carriage of goods.

CMR Note

This document is otherwise known as the "international consignment note." According to Federal Law No. 127-FZ dated July 24, 1998, On State Control Over International Road Transport and Liability for Violation of the Procedure for Their Performance, an international consignment note is a document provided for by the Convention on the Contract for the International Carriage of Goods by Road 1956 or another international treaty of the Russian Federation, containing, among other things, information about the cargo being transported, its sender and recipient, the carrier and the transport vehicle performing the carriage, as well as the locations of its loading and unloading.

In accordance with Article 6 of the Convention on the Contract for the International Carriage of Goods by Road (CMR) (the "Convention"), the consignment note must contain the following information:

place and date of its drafting;
name and address of the sender;
name and address of the transport agent;
place and date of taking over the goods and the place designated for delivery;
name and address of the recipient;
commonly used description of the nature of the goods and the method of packing, and, in the case of dangerous goods, their generally recognized description;
number of packages, their special marks, and numbers;
gross weight of the goods or their quantity otherwise expressed;
charges relating to the carriage (carriage charges, supplementary charges, customs duties, and other charges incurred from the conclusion of the contract to the time of delivery);
instructions necessary for customs and other formalities;
a statement that the carriage is subject, notwithstanding any clause to the contrary, to the provisions of this Convention.

If necessary, the consignment note must also contain the following indications:

prohibition of transshipment;
charges which the sender undertakes to pay;
amount of "cash on delivery" charges;
declaration of the value of the goods and the amount representing special interest in delivery;
sender's instructions to the carrier regarding insurance of the goods;
agreed time limit within which the carriage is to be carried out;
a list of documents handed to the carrier.

The contracting parties may enter into the consignment note any other particulars they may deem useful.

The sender is required to attach to the consignment note or place at the disposal of the carrier the necessary documents and provide all required information for customs and other formalities before the delivery of the goods (Art. 11 of the Convention).

Upon arrival of the goods at the place designated for delivery, the recipient has the right to require the carrier to hand over to him the second copy of the consignment note and the goods (the recipient issues a corresponding receipt for the goods) (Art. 13 of the Convention).

According to the explanations of the FAS Russia, the consignment note for the carriage of goods by road is a document of strict accountability and is intended for recording the movement of inventory items, as well as for settlements for their carriage and recording of the transport work performed. It serves as a document for writing off inventory items from the sender and recording them at the recipient, as well as for warehouse, operational, and accounting records.

It is drafted in three copies, of which:

the first copy remains with the sender and serves as the basis for recording the volumes of carriage performed;
the second and third copies are handed over to the motor transport enterprise or organization. The second copy serves as the basis for settlements between the motor transport enterprise and the sender and is attached to the invoice, while the third copy is attached to the waybill and serves as the basis for recording transport work [9].

Thus, the consignment note must be held by both parties to the contract in original copies. However, in the course of economic activity, original copies are not always exchanged in a timely manner. This raises the question of whether an importer bringing in goods from EAEU countries can accept a deduction for "import" VAT without having the original international consignment note (CMR). As explained by the Ministry of Finance, the absence of original transport documents confirming the movement of the goods across the RF border, including original CMR notes, cannot be considered grounds for refusing a deduction of the relevant tax amounts [10].

Before signing the CMR, the carrier must check the accuracy of the number of packages, the marks and numbers, and the apparent condition of the goods and their packaging (Art. 8, Para. 1 of the Convention). When transporting goods over long distances, carriage may be entrusted to several successive carriers. The second carrier and each of the subsequent carriers become parties to the contract of carriage by reason of their acceptance of the goods and the consignment note. The carrier accepting the goods must record his name and address on the second copy of the consignment note. If he is not satisfied with its condition, he must enter appropriate reservations in the consignment note. If the consignment note contains no specific reservations by the carrier, it is presumed that the goods and their packaging were in apparent good condition at the time of taking over by the carrier, and that the number of packages, marks, and numbers corresponded to the statements in the consignment note [11].

Consignment Note Form No. 1-T and Transport Note

By Resolution of the State Statistics Committee of the RF No. 78 dated November 28, 1997, the form of the consignment note No. 1-T was approved.

According to the Letter of the FAS Russia No. ShS-22-3/660@ dated August 21, 2009, On Sending Systematized Materials on the Documentation of Operations During the Transportation of Goods, if cargo is delivered to a CIS member country (or imported into Russia from one of these countries), the carriage may be documented by a standard consignment note (Form No. 1-T) or a CMR note.

Furthermore, the carriage of goods may be accompanied by a transport note, the form of which is established by the Rules for the Carriage of Goods by Road, approved by Decree of the Government of the RF No. 2200 dated December 21, 2020.

This legal act establishes that such a note is drafted on paper in three copies (originals) for the sender, the recipient, and the carrier, respectively, or formed as an electronic transport note. If there are no indicators in the rows of the paper form of the transport note, a dash may be entered.

The transport note is signed by the sender (the person loading the cargo into the transport vehicle), the recipient (the person authorized by him), and the carrier (the driver). The driver is not allowed to act on behalf of two parties to the contract of carriage.

In the event the transport note is used as a primary accounting document, a fourth copy (original) of the transport note is drafted on paper for the sender.

As explained by the Ministry of Transport of the RF, the transport note approved by the Government of Russia and the consignment note Form 1-T are used for the carriage of goods within the territory of Russia.

At the same time, the use of a transport note does not exclude the necessity of drafting shipping documents intended for accounting and warehouse records of the movement of goods (Form No. 1-T, Form No. TORG-12, etc.), and the transport note does not replace these documents since it is not intended for recording the movement of goods. When goods are brought in or removed by own transport due to the absence of a contract for the carriage of goods, a transport note is not drafted; instead, the above-mentioned shipping documents are used to ensure accounting and warehouse records of the movement of goods [12].

FAS Russia explains that the Tax Code of the RF does not establish a specific list of documents confirming the expenses incurred in accordance with the requirements of Paragraph 1 of Article 252 of the Tax Code of the RF, and therefore does not limit the taxpayer in the matter of confirming the legality of the relevant expenses. The non-compliance of a transport note with the established form cannot be sufficient grounds for recognizing expenses as unconfirmed. For income tax purposes, expenses are confirmed by the totality of the submitted documents — contracts, consignment notes, invoices, payment, and other documents.

When moving goods within the Eurasian Economic Union using road transport for the purpose of confirming the 0% VAT rate, economic entities of the Russian Federation may submit an international consignment note (CMR). Instead of a CMR note, a consignment note Form No. 1-T may be submitted to the tax authority, since the indicators contained in the CMR are generally similar to the indicators contained in the specified form.

At the same time, considering that the types of documents submitted as a transport (shipping) document are not established by the norms of the Protocol on the procedure for collecting indirect taxes and the mechanism for controlling their payment during the export and import of goods, performing work, and rendering services (Annex No. 18 to the Treaty on the EAEU dated May 29, 2014), another transport (shipping) document confirming the movement of goods from the territory of one EAEU member state to the territory of another EAEU member state may be submitted to the tax authority [13].

Thus, these documents are used for road transport and are used instead of CMR within the territory of the Customs Union.

Bill of Lading in International Carriage of Goods

According to Article 15 of the United Nations Convention on the Carriage of Goods by Sea, when the carrier or the actual carrier takes the goods into his charge, the carrier must, on demand of the shipper, issue to the shipper a bill of lading. However, Russia is not a party to this convention.

At the same time, similar provisions are contained in the Merchant Shipping Code of the RF, according to which, after receiving the goods for carriage, the carrier must, at the request of the shipper, issue a bill of lading to the shipper.

The shipper is entitled to demand that the carrier issue a sea waybill or another document confirming the receipt of the goods for carriage instead of a bill of lading. The rules applicable to the content of a bill of lading apply to such documents.

Specifically, the following data must be included in a bill of lading:

name of the carrier and his location;
name of the port of loading according to the contract for the carriage of goods by sea and the date the goods were received by the carrier at the port of loading;
name of the shipper and his location;
name of the port of discharge according to the contract for the carriage of goods by sea;
name of the recipient, if indicated by the shipper;
description of the goods, the leading marks necessary for identification of the goods, an indication, where appropriate, of the dangerous nature or special properties of the goods, the number of packages or pieces, and the weight of the goods or their quantity otherwise expressed. All data is indicated as provided by the shipper;
apparent condition of the goods and their packaging;
freight in the amount payable by the recipient, or another indication that freight is to be paid by him;
time and place of issuance of the bill of lading;
number of originals of the bill of lading, if more than one;
signature of the carrier or a person acting on his behalf.

By agreement of the parties, other data and reservations may be included in the bill of lading. A bill of lading signed by the master of the vessel is deemed to be signed on behalf of the carrier.

After the goods are loaded on board the vessel, the carrier, at the request of the shipper, issues him a "shipped" bill of lading, which must additionally indicate that the goods are on board a specific vessel or vessels, as well as the date or dates of loading the goods.

If the carrier issued a bill of lading or another document of title for the goods received for carriage to the shipper before the goods were loaded on board the vessel, the shipper must, at the request of the carrier, return such document in exchange for a "shipped" bill of lading.

The carrier may satisfy the shipper's requirements for a "shipped" bill of lading by supplementing any previously issued document, provided that the document so supplemented includes all the data required to be contained in a "shipped" bill of lading.

Thus, the Incoterms term "FCA" (Free Carrier) has for a long time caused problems for sellers related to receiving payment in the case of shipping goods by sea. Since delivery under FCA conditions is completed before the goods are loaded on board the vessel, obtaining a "shipped" bill of lading (which is required by the rules of international settlements by letters of credit) was complicated by the fact that the carrier, firstly, could issue a "shipped" bill of lading only after full loading of the goods on board the vessel, and, secondly, the seller is not a party to the contract of carriage and, as a consequence, the carrier has no obligation to provide him with the bill of lading. This state of affairs clearly did not correspond to the requirements of civil commerce; therefore, in order to account for this situation, additional options for the parties to an FCA contract appeared in Incoterms 2020. In particular, they may agree that the buyer will instruct the carrier to issue a "shipped" bill of lading to the seller after the goods are loaded on board the vessel, and the seller, in turn, undertakes to hand over the bill of lading to the buyer (usually after receiving payment under a letter of credit at a bank) [14].

In practice, questions often arise regarding the application of VAT rates and the submission of relevant documents to the tax authority. In particular, whether it is mandatory to provide a bill of lading with a customs service mark.

For example, an organization had a question regarding the legitimacy of submitting documents to the tax authorities (a loading order downloaded from the customs authority's electronic document system complex "Marine Port Portal" and printed without visualization of the "Loading Permitted" mark and the signature of the representative of the freight forwarding organization existing in the XML document).

FAS Russia provided the following explanations: "Based on the provisions of Paragraph 9 of Article 92 of the Customs Code of the EAEU, the departure of goods from the customs territory of the EAEU, except for goods for personal use, is permitted with the permission of the customs authority, which is documented using the customs authority's information system and by entering corresponding marks of the customs authority on the customs declaration, or on its copy, or on another document permitting the export of goods from the customs territory of the EAEU, and on the transport (shipping) documents.

According to the provisions of Subparagraph 3 of Paragraphs 3.1 and 3.5 of Article 165 of the Tax Code of the RF, when rendering services for international carriage of goods by a sea or river vessel, or a mixed (river-sea) navigation vessel, as well as freight forwarding services rendered during the organization of such international carriage, to confirm the validity of applying a 0% VAT rate, taxpayers submit to the tax authorities, among other things, copies of transport, shipping, and (or) other documents confirming the export of goods outside the Russian territory (import of goods into the territory of Russia), with the corresponding mark of the Russian customs authority.

At the same time, the current version of the Tax Code of the RF does not regulate the confirmation of the validity of applying a 0% tax rate when rendering specified services in the event of performing customs operations in electronic form.

At the same time, it should be noted that primary accounting documents created in electronic form not in accordance with the formats established by the FAS Russia, if they are requested as part of tax audits, are submitted to the tax authority on paper in the form of copies certified by the taxpayer with a mark indicating the document was signed with an electronic signature.

With this in mind, in the opinion of the FAS Russia, when submitting a loading order or bill of lading simultaneously with a VAT tax declaration or when requested by the tax authority, when performing work (rendering services) for export when removing goods by sea or river vessel, or mixed (river-sea) navigation vessel through sea ports of the Russian Federation, in the event such a document is created in electronic form not in accordance with the format of the FAS Russia, this document is submitted to the tax authority on paper with the corresponding mark of the customs authority, certified by the handwritten signature of the taxpayer" [15].

Thus, the bill of lading as a legal document:

establishes the moment of transfer of the risks of cargo safety from the shipper to the carrier;
confirms the very fact of the existence of a contract for the carriage of goods and the content of its material terms — what is being transported, how much the cargo weighs, etc.;
is a document serving as the basis for the transfer of the right of disposal, including the right to alienate the cargo;
is a shipping document (Art. 224, Para. 3 of the Civil Code) [16].

SMGS Consignment Note

In order to organize the carriage of goods in direct international rail traffic, Russia and several other countries concluded the Agreement on International Goods Transport by Rail (SMGS) dated November 1, 1951. This legal act provides the form of the consignment note in its Annex No. 6.

The consignment note must contain the following information:

name of the sender and his postal address;
name of the recipient and his postal address;
name of the contractual carrier;
name of the railway and the station of departure;
name of the railway and the station of destination;
names of border crossing stations;
description of the cargo and its code;
shipment number;
type of packaging;
number of packages;
mass of the cargo;
number of the wagon (container), and who provided the wagon for the carriage of the cargo (the sender or the carrier);
list of shipping documents attached by the sender to the consignment note;
information on the payment of carriage charges;
number and marks of seals;
method of determining the mass of the cargo;
date of conclusion of the contract of carriage.

The consignment note may be documented in the form of a paper (paper consignment note) or an electronic (electronic consignment note) document.

Recall that in accordance with a contract of carriage, the carrier undertakes, for a fee, to transport the cargo entrusted to him by the sender to the station of destination via the route agreed upon by the sender and the contractual carrier, and to hand it over to the recipient. The conclusion of a contract of carriage is confirmed by the consignment note. The wagon for the carriage of cargo is provided by the carrier or the sender. The realization of rights and obligations by the participants in the carriage is possible using paper or electronic documents.

When questions arise regarding the provision of accurate information to customs authorities, the courts recommend being guided by the Agreement on International Goods Transport by Rail. Thus, according to Paragraph 29 of Resolution of the Plenum of the Supreme Court of the RF No. 18 dated October 24, 2006, On Certain Issues Arising for Courts When Applying the Special Part of the Code of the Russian Federation on Administrative Offenses, the court notes: "Evaluating the guilt of the carrier in committing an administrative offense provided for by Part 3 of Article 16.1 of the CAO RF, which was expressed in providing the customs authority with inaccurate information about the quantity of goods, it should be ascertained to what extent the provisions of existing international treaties in the field of carriage (the CMR Convention of 1956, the Agreement on International Goods Transport by Rail (SMGS) of 1951, and others) provided the carrier with the opportunity to comply with the rules and norms, for the violation of which liability is established by Part 3 of Article 16.1 of the CAO RF, as well as what measures were taken by the carrier to comply with them."

Another document specifying the procedure for applying the norms of the specified agreement that approved the form of the SMGS consignment note is the Instructions on the actions of customs officials performing customs operations during international carriage of goods by rail, approved by Order of the Federal Customs Service No. 1157 dated June 1, 2011, according to which, if the customs authority establishes during customs operations that all conditions for placing goods under a customs procedure have been met, the authorized official carries out the release of the goods and establishes the period of customs transit, taking into account the provisions of the Agreement on International Goods Transport by Rail (when establishing the period of customs transit, possible delays of the transport vehicle en route due to the breaking up of trains at classification stations, technical repair of transport vehicles, and operations carried out by regulatory authorities are taken into account).

Also in practice, questions arise regarding the application of SMGS consignment notes in the case of carriage by rail across territories of states that are not parties to the relevant agreement (SMGS). Thus, several European countries apply the Convention concerning International Carriage by Rail (COTIF). Annex "B" to this convention provides the Uniform Rules concerning the Contract for International Carriage of Goods by Rail (CIM).

The norms of the CIM and SMGS agreements contain alternative procedures for re-documenting carriage:

with re-documentation of consignment notes;
with documentation by a single consignment note for the entire route.

If the carriage of cargo is documented by a CIM/SMGS consignment note, the period of liability of the railways is in effect throughout the entire period of carriage through the territories of the SMGS and CIM-COTIF member countries [17].

The re-documentation of SMGS consignment notes to consignment notes of other transport law and vice versa is carried out by a railway that simultaneously participates both in SMGS (or applies SMGS provisions) and in other transport law. In such cases, the SMGS consignment note is filled out by the sender with the following features in mind.

For example, the carriage of goods from countries applying only SMGS to Hungary and Slovakia and vice versa is documented by SMGS consignment notes for the entire route. Romanian railways apply SMGS only on the section from the Romanian-Moldovan or Romanian-Ukrainian border to the Romanian re-documenting station. The carriage of goods from a country in which only SMGS is applied to a country in which CIM is applied, in transit through Polish, Slovak, or Romanian railways, is documented by an SMGS consignment note up to the corresponding entry border station of the Polish, Slovak, or Romanian railways at which the re-documentation of the shipment to the country of final destination must be performed.

Based on the information contained in the SMGS consignment note, the entry re-documenting station of the transit railway exactly transfers all data from the original consignment note to the newly drafted CIM consignment note and sends the cargo to the station of final destination.

In the CIM consignment note, the sender indicates the corresponding exit border station as the station of destination and the master of this station as the recipient. Furthermore, the sender is required to indicate in the consignment note the final station and railway of destination of the final recipient of the cargo and his postal address.

The carriage of goods to Finland from a country applying SMGS and not having agreements with Finland on direct rail traffic, as well as to Finland from the Kaliningrad region of the Russian Federation in transit through the railways of the Republic of Belarus, the Republic of Lithuania, the Republic of Latvia, and the Republic of Estonia, is documented by an SMGS consignment note up to the exit border station of the Russian railways at which the re-documentation of the SMGS consignment note to the Soviet-Finnish traffic consignment note is performed.

Carriage in the reverse direction is documented by a Soviet-Finnish traffic consignment note up to the entry border station of the Russian railways at which the re-documentation of the original consignment note to the SMGS consignment note is performed [18].

Thus, rail transport during international supply requires not only interaction between counterparties but also adherence to the requirements and legal acts of the rail carrier.

Air Waybill (AWB)

The transport document when moving goods by air is the Air Waybill (AWB), the form of which was approved by the Warsaw Convention dated October 12, 1929, as amended in The Hague on September 28, 1955.

According to Recommendation of the EEC Board No. 5 dated April 12, 2016, when filling out the waybill, the three-digit IATA airline prefix code is indicated. According to the standards of the International Air Transport Association (IATA) for filling out air waybills, these standards establish that an air waybill is a document that can be defined either as a carrier's air waybill with pre-printed identification of the issuing carrier, or as a neutral air waybill without identification in any form, and used by carriers other than air carriers. The issuing carrier or agent must ensure that all necessary entries are made when issuing the air waybill. The IATA standards contain a detailed description of the procedure for filling out the waybill.

Packing List

The mandatory details of a packing list are:

list of packed items;
their quantity;
type (model);
gross and net weight;
contract number;
box (container) number;
type, name, and number of the transport vehicle;
number of the transport document.

This document confirms factual data on the types and quantities of goods in cargo containers or other packages. It is drafted for each package (container, etc.) at the time of shipment. It accompanies the cargo along the transport route. The data in the packing list serve as the basis for filing claims against the carrier in the event of a discrepancy between the actual presence of the cargo upon arrival and the data in the packing list.

Payment Documents

In addition to documents accompanying the transportation of goods within the framework of an international supply, the documents accompanying the payment for the goods are necessary documents.

In internal trade, the basis for rendering services or supplying goods is the contract, payment is made according to the invoice issued, and the supporting documents are the certificate of acceptance, invoice, universal transfer document, or consignment note — depending on whether services are rendered or goods are supplied.

The primary document when working with a foreign company, confirming the supply of goods or rendering of services, is the invoice, which also serves as the basis for making payment. A commercial invoice is a combination of documents. If one literally translates the word "invoice", dictionaries suggest the following options:

account (score, bill);
texture (account, bill of parcels);
waybill (consignment, delivery note, bill of lading);
receipt (ticket, claim check).

However, a definition of the term "invoice" is absent in Russian legislation. In practice, documents such as commercial invoices and proforma invoices are used in commerce.

As explained by the Chamber of Commerce and Industry, a commercial invoice is an invoice issued by the seller and handed over to the buyer simultaneously with the goods. This document describes the main characteristics regarding the quality and quantity of the goods and other formal features. A proforma invoice and the invoice itself are practically identical documents. The only difference between them is that in the proforma invoice, the data on the supply of goods are interim, while in the invoice, they are final [19].

According to the explanations of the FAS Russia, a proforma invoice must contain:

details of the seller and buyer;
description of the goods;
unit price of the goods and the total amount of the invoice (payment) in dollars;
basis conditions for the supply of goods [20].

In order to confirm the expenses incurred to the Russian tax authority, a translation of the invoice drafted in a foreign language is required [21].

Customs authorities often draw attention to the incorrect completion of these documents. In this case, to defend its position, the organization is entitled to apply to the court.

For example, in the opinion of the customs authority, the declarant submitted contradictory documents and explanations regarding the payment for goods as part of customs control. The fact of the payment made under the invoices did not align with the contract, as payment was made on the conditions reflected in the invoices rather than in the proforma invoices. The amounts for part of the canceled proforma invoices specified by the declarant in the supplementary agreement did not correspond to the scanned copies of these documents submitted to the companies under various declarations. Customs also noted the lack of agreement between the parties to the foreign trade supply contract, as the invoice bore the signature and seal of only the foreign company (Hong Kong). Furthermore, other proforma invoices and invoices issued toward the obligations under the contract did not contain original signatures and seals but only a facsimile of the seller. The court did not agree with the arguments of the customs authority, as the value of the goods specified in the declaration coincided with the price reflected in the commercial documents, payment was confirmed, and the law does not provide for the buyer's obligation to certify the invoice with handwritten signatures and a seal [22].

In addition to invoices, payments under international supply contracts are confirmed by such payment documents as a payment order with a bank mark or a statement from the personal account.

Confirmation of Product Origin

According to Art. 29 of the Customs Code of the EAEU, the origin of goods is confirmed in all cases when the application of customs and tariff regulation measures, prohibitions and restrictions, and measures to protect the internal market depends on the origin of the goods, except for the following cases:

goods imported into the customs territory of the EAEU are placed under the customs transit procedure;
goods for personal use are moved across the customs border of the EAEU;
other cases provided for by the rules for determining the origin of imported goods or the rules for determining the origin of exported goods.

Furthermore, regardless of the cases listed above, the origin of goods is confirmed if the customs authority discovers signs that the goods originate from a country (group of countries, customs union of countries, region, or part of a country), goods originating from which are prohibited:

from being imported into the customs territory of the Union or into the territory of a member state according to prohibitions and restrictions established in accordance with the Treaty on the Union;
from being exported from the customs territory of the EAEU or from the territory of a member state according to prohibitions and restrictions established in accordance with the Treaty on the Union;
from being imported into the territory of an EAEU member state in accordance with the legislation of that member state;
from being transited through the territory of an EAEU member state in accordance with the international treaties of that member state with a third party.

The document of origin of the goods is a declaration of origin or a certificate of origin. The origin of the goods is confirmed by a declaration of origin or a certificate of origin in accordance with the rules for determining the origin of goods imported into the customs territory of the Eurasian Economic Union (non-preferential rules for determining the origin of goods), approved by Decision of the EEC Council No. 49 dated July 13, 2018 (the "Rules").

According to Paragraph 20.1 of the Rules, for the purposes of confirming the origin of goods, the original document of origin on paper, a copy of the document of origin (on paper or as a graphic electronic copy), or a certificate issued by the authorized body in electronic form without drafting the original certificate on paper (on paper or as a graphic electronic copy) may be used.

The origin of goods imported into the customs territory of the EAEU is confirmed by a declaration of origin or, at the request of the declarant, by a certificate. At the same time, there are exceptions to this case.

Thus, upon discovering signs that the information stated in the declaration of origin is inaccurate, the customs authority is entitled to request a certificate. Such a request must be justified and must contain information indicating which data in the declaration of origin may be inaccurate.

Upon discovering signs that the information contained in the copy of the certificate submitted for the purpose of confirming the origin of the goods (on paper or as a graphic electronic copy) does not correspond to the information contained in the original certificate, the customs authority is entitled to request the original certificate on paper.

In the event of the application of measures to protect the internal market provided for by the Treaty on the Eurasian Economic Union dated May 29, 2014, conditioned by the origin of the goods, the origin of similar goods imported into the customs territory of the EAEU to one recipient from one sender under one transport (shipping) document, the total customs value of which exceeds an amount equivalent to 200 euros, is confirmed by a certificate.

If certificates are invalid, the customs authority may assess additional customs payments. For example, the customs authority refused to grant tariff preferences and assessed customs payments, pointing to the invalidity of the certificates of origin of the imported goods and the information contained therein. However, the court disagreed with the customs and established that during customs declaration, the plaintiff submitted a certificate of origin, Box 11 of which, as well as the details of the seal of the body authorized to confirm the accuracy of the certificate and the stamp of the body authorized in accordance with the law to certify the origin of the goods, contain information that collectively allows for the conclusion that Box 11 of the certificate contains data on the place of certification of the certificate of origin. Furthermore, the case materials contain no evidence clearly indicating the illegality, inaccuracy, or falsification of the disputed certificate, or indicating significant defects in the drafting of the disputed certificates that would exclude them from the evidence serving as grounds for the refund of excessively paid customs payments.

Under such circumstances, the judicial instances considered the customs' decision on the country of origin of the goods and (or) the granting of tariff preferences to be unlawful as it did not comply with customs legislation [23].

Also, questions about the origin of goods may be raised after the international supply is carried out if the Russian buyer plans to participate in state procurement. Paragraph 2 of Decree of the Government of Russia No. 102 dated February 5, 2015, On Restrictions and Conditions of Admission of Certain Types of Medical Devices Originating from Foreign States for the Purpose of Procurements for State and Municipal Needs, established that for the purpose of procurement of certain types of medical devices included in List No. 1 (the list of certain types of medical devices originating from foreign states in respect of which restrictions on admission are established for the purpose of procurement for state and municipal needs) or List No. 2 (the list of single-use medical devices made of polyvinyl chloride plastics and other plastics, polymers, and materials originating from foreign states in respect of which restrictions on admission are established for the purpose of procurement for state and municipal needs), the Customer rejects all bids containing proposals for the supply of certain types of specified medical devices originating from foreign states (except for EAEU member states), provided that at least two bids meeting the requirements established in the notice of procurement or procurement documentation have been submitted for participation in the selection of the supplier.

Thus, the confirmation of the country of origin of medical devices included in List No. 1 and List No. 2 is the certificate of origin issued by the authorized body (organization) of the EAEU member states, in the form established by the Rules [24].

In addition to the certificate of origin, permit documents may be required during an international supply.

Permit Documents in International Trade

In respect of several goods, a product safety certificate and/or a certificate of conformity may be required to confirm their quality.

According to Paragraphs 4 and 5 of the Treaty on the Eurasian Economic Union dated May 29, 2014, for the purpose of meeting the requirements of an EAEU technical regulation, the Commission approves a list of international and regional (interstate) standards, and in their absence — national (state) standards, the application of which on a voluntary basis ensures compliance with the requirements of the EAEU technical regulation.

For the purpose of conducting research (testing) and measurements when assessing the compliance of technical regulation objects with the requirements of an EAEU technical regulation, the Commission approves a list of international and regional (interstate) standards, and in their absence — national (state) standards containing rules and methods for research (testing) and measurements.

Until relevant interstate standards are developed, the list of international and regional (interstate) standards, and in their absence — national (state) standards containing rules and methods for research (testing) and measurements, including sampling rules necessary for the application and performance of the requirements of an EAEU technical regulation and the assessment of compliance of technical regulation objects, may include research (testing) and measurement methodologies that have been certified (validated) and approved in accordance with the legislation of a member state. The list of these research (testing) and measurement methodologies is provided by the authorized bodies of the member states to the Commission.

Mandatory confirmation of compliance is carried out in the forms of declaration of conformity and certification. Mandatory confirmation of compliance is conducted only in cases established by the relevant EAEU technical regulation and exclusively for compliance with the requirements of the EAEU technical regulation.

When assessing compliance, the applicant may be a legal entity or a physical person as an individual entrepreneur registered in the territory of a member state in accordance with its legislation, who is the manufacturer or seller or a person authorized by the manufacturer.

Specifically, a Certificate of Conformity for products to EAEU Technical Regulations is a document confirming the quality and safety of products according to established requirements. This certificate is mandatory for most types of products and permits the import and sale of goods in the territory of the countries belonging to the EAEU.

The unified form of the certificate of conformity and declaration of conformity with the requirements of technical regulations of the Eurasian Economic Union and the rules for their drafting were approved by Decision of the EEC Board No. 293 dated December 25, 2012.

Additionally, licenses, import or export permits, and declarations of conformity may be required for a supply. For example, a veterinary certificate for animals, livestock, and poultry; a sanitary certificate for food products; a phytosanitary certificate for plants, fruits, and vegetables, etc.

The documentary support for international supplies has many subtleties and nuances that are not limited to those listed above. This article provides only basic information on the documentation accompanying an international supply established by law.

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