SOME ISSUES CONCERNING THE REGULATION

OF MANUFACTURING AND TRADING SMALL

SIZE VESSELS IN THE RUSSIAN FEDERATION

SMALL SIZE VESSEL -DEFINITION

LENGTH (LOA) – NO MORE THAN 24 M.

According to the Commercial Navigation Code of

the Russian Federation

According to the EC Regulations

Length (LOA) – no more than 20 m.

Maximum number of onboard people – 12.

SMALL SIZE VESSELS (INTENDED USE)

COMMERCIAL NON-COMMERCIAL

Not defined in current

legislation.

According to unofficial rules,

commercial usage is

understood as exploiting a boat

for an activity with a for profit

objective.

Both, legal and private persons

can be owners.

Not defined in current legislation.

According to unofficial rules, non-

commercial usage is understood as

exploiting a boat for an activity with a

non-for profit objective.

The activity of government

institutions is considered non-for

profit.

A legal person may be an owner of a

boat with a non-for profit objective if it

is not exploited for profit.

Defined on the basis of an application by the owner

COMMENTS:

Examples of commercial use: passenger vessels or cargo; renting; transporting of pilots to and

from vessels; marine surveys; etc.

Examples of non-commercial use: use for professional purposes by employees of public

authorities (the police, Ministry of Civil Defence and Emergency Response, customs and other

non-commercial public authorities and agencies).

According to the Commercial Navigation Code, any vessel with the weight above 200 kg and

engine power at least 8 kW are subject to state registration.

Small size vessels, used for commercial purposes are registered in the National Register of

Vessels. In order to be registered, the vessel has to be certified by the Russian River Register

(RRR), and the Russian Maritime Register of Shipping (RMRS).

Small size vessels, used for non-commercial purposes are registered in the Small Crafts

Register. Registration and certification is carried out by the State Inspectorate for Small Size

Vessels (SISV).

In order for RRR and RMRS to certify a vessel and declare the vessel seaworthy, the vessel

has to be compliant with the rules established by these organisations. Requirements, set forth

in said rules are excessive in case of recreational vessels, and most of series production

vessels do not satisfy these requirements. Certification is a fee-charging service.

Registration and certification of seaworthiness by SISV is carried out free of charge. In order to

be declared seaworthy, a vessel has to comply with the Technical Regulations on the safety of

small size vessels, which will be discussed below.

CUSTOMS CODE OF THE CUSTOMS UNION

COMMERCIAL NON-COMMERCIAL

Tax 5-10 %

VAT – 18%

Tax 11 - 15 %

VAT- 18%

Only either a legal person registered in the Russian Federation or a

citizen of the Russian Federation may be an importer to release a

boat in free circulation.

Private persons for their own needs

- under 200 kg and 650 000 RUR. (€ 8900) – 30%

- Over 200 kg and 650 000 RUR. – SCP (Tax + VAT)

COMMENTS:

Considering that only legal entities registered in the Russian Federation have the right to act

as importers, it is obvious that any foreign manufacturer has to have a dealer or own a

company in Russia.

Customs charges consist of the customs duty and the VAT.

The rate of VAT is 18%.

The customs duty applicable to small recreational vessels range from 11 to 15%, depending

on the type of the vessels (jet-ski, motor-boat with outboard motor, speedboat with inboard

motor, yacht), and size (the dividing line lies at 7.5 m – the duty charged for speedboats and

boats with the length below 7.5 m is lower than the duty charged for vessels with the length

above 7.5 m).

The rate applicable to vessels intended for other purposes (including commercial use) ranges

from 5% to 10%. An attempt to save costs by trying to pass a recreational vessel off as a

vessel intended for other purposes is unlikely to succeed, because customs authorities will

require proof that the vessel in question is not a recreational vessel.

Small size vessels may also be imported to the Russian Federation by natural persons. When

a natural person imports a vessel for their own use, provided that the vessel weighs less than

200 kg and costs less than ₽ 650 000 (€ 8900), a natural person is charged 30% of the value

of the vessel. If the weight or the value of the vessel exceeds the above limits, the natural

person shall pay an aggregate customs charge (ACC), which equals the sum of the duty and

the VAT, that would have been charged to a legal entity importing the same item.

Legal entities may handle customs clearing both at the state border as well as at internal

customs offices (other than a border customs office), where goods are delivered by accredited

carriers.

TECHNICAL REGULATION ACT

Establishes the mandatory requirements to products and

the procedure to assess the conformity to the

requirements.

The technical regulations of the Customs Union (Russia, Kazakhstan,

Belarus, Armenia, Kyrgyzstan)

Requirements applicable to concrete types of products are set forth

by technical regulations. Technical regulations may be passed by

the Government of the Russian Federation, and apply on the

territory of the RF (Technical Regulations of the Russian

Federation), or by the Eurasian Economic Commission (Technical

Regulations of the Customs Union).

If certain products are governed by any Technical Regulations of the

Customs Union, such regulations shall take precedence over the

Technical Regulations of the Russian Federation.

TECHNICAL REGULATIONS

COMMERCIAL NON-COMMERCIAL

Technical Regulations of the

Russian Federation

“On the safety of maritime

transport facilities”

“On the safety of inland

water transport facilities”

Technical Regulations of the

Customs Union

“On the safety of small

size vessels (TR CU

026/2012)”

Classification

Conformity Assessment Method

Certification

Classification

TECHNICAL REGULATIONS TR CU 026/2012

“ON THE SAFETY OF SMALL SIZE VESSELS”

Vessels up to 6 meters long (LOA)

Certification

- Issued by an authorized certification body of any of the

CU countries (there are two such organizations in Russia,

one in Belarus)

- Applies to a series of a product or a batch.

- Valid for 5 years throughout the territory of the Customs

Union.

An Applicant may only be either a legal person registered under the law of

any country that is a member of CU or a citizen of such a country. For foreign

manufacturers - a person performing under a Contract the liabilities of a

manufacturer concerning the product conformity to the requirements

established in Technical Regulations.

TECHNICAL REGULATIONS TR CU 026/2012

“ON THE SAFETY OF SMALL SIZE VESSELS”

Vessels up to 6 meters long (LOA)

Certification (procedure).

- Analysis of technical documentation (translation of technical SI file, the user manual).

- Evaluation of production conditions (expert‘s visit on site).

- Testing (metacentric stability, unsinkability, damage metacentric stability).

! Requirements for emergency metacentric stability are more strict than SI. The

assessment by calculations is not provided. Testing can be carried out both in the

Russian Federation, and on the territory of the country-manufacturer.

- The annual inspection of production (can be carried out in the form of the production

control or product testing).

- Price € 2000 - € 4000 for a model + expert’s travel costs. Inspection shall be paid

separately.

COMMENTS:

The current version of the Technical Regulations contains the requirements and procedures,

which are inappropriate for small size vessels, and which are contrary to the effective

legislation, BUT! - these Regulations are currently effective, and we are forced to work with

them.

TR CU 026/2012 lays down two separate procedures for certification of conformity.

Vessels of up to 6 metres in length are subject to certification, while vessels with the length

over 6 metres are subject to classification.

Certification.

At present there are two certification authorities in the Russian Federation (both in Saint

Petersburg), while one authorised authority is operating in the Republic of Belarus. A

certificate is granted either for a serial production or a batch. Term of validity of a certificate

is 5 years.

The procedure consists of several stages:

1. Analysis of the technical documentation. For imported products originating from EU

Member States, it is required to present the technical file translated into the Russian

language, which is compiled upon certification pursuant to the EU Directive.

2. Assessment of production conditions (for serial production). The assessment is carried

out by an expert of a certification authority. Any costs arising from the visit shall be borne

by the applicant. The purpose of the assessment is to establish whether or not the

manufacturer is in possession of the required manufacturing capacity necessary for

ensuring stability of production.

3. Performance testing. At present only three parameters are tested: (stability, buoyancy,

and flooded stability). This does not completely comply with the Regulation, however

such is the established practice.

COMMENTS:

Tests are carried out in accordance with GOST 19356-79, not ISO. GOST does not

provide for the assessment of the above referred parameters based on calculations,

which means that testing of the final product is required. Testing may take place

anywhere, provided that an expert representing the certification authority is present

thereat.

It is necessary to bear in mind that the requirements to flooded stability prescribed

by the GOST standard are more stringent than those set forth by the ISO standards.

In accordance with ISO the flooded stability is tested by applying a load equalling

5% of the carrying capacity of the vessel to the board of the ship flooded with water.

In accordance with GOST, the vessel – in addition to being flooded with water – shall

also contain a load with the weight equalling 40% of the carrying capacity, and with

the centre of gravity located above the water line.

4. Annual inspection of products. Such inspection may be carried out as an

assessment of the production facility (visit of an expert) or as testing of final

products, e.g. at the dealer’s warehouse. The cost of certification ranges from

₽150 000 to ₽300 000 (€2000–€4000) per each model.

The annual inspection is carried out for a separate fee.

TECHNICAL REGULATIONS TR CU 026/2012

“ON THE SAFETY OF SMALL SIZE VESSELS”

Vessels more then 6 meters long (LOA)

Classification

- The certificate is issued by an authorised classification body. In the Russian

Federation - the State Inspectorate for Small Boats (SISB)

- issued for each (!) hull.

- Valid for up to 6 years throughout the territory of the Customs Union.

Classification (procedure).

- Endorsement of technical documentation (prior to construction).

- Technical supervision on the manufacturing process and testing.

- No fee is charged.

COMMENTS:

Classification (vessels with over 6 m in length).

At present classification certificates (CC) are only granted by the State Inspectorate

for Small Vessels (SISV).

The classification process features verification of compliance of every (!) hull with

the requirements of the Technical Regulation.

Term of validity of a CC is 6 years. CC is effective on the territory of all Customs

Union Member States.

The classification procedure includes

• Obtaining approval to the technical documentation (before the start of

production).

• Technical supervision of the building of each hull.

• Certification while in operation.

No fee is charged for classification.

It is obvious that implementation of this procedure is realistically not possible,

considering the number of vessels produced.

SISV does not have resources or specialists needed for analysing the designs.

Supervision of the construction of every hull with the length of 6 metres would

require permanent stay of officials of SISV at the manufacturer’s facility, or would

cause significant delays in the production process. Testing, which require actual

flooding of expensive yachts of up to 20 metres in length, are unacceptable for

importers.

«STRICTNESS OF LAWS IN RUSSIA IS COMPENSATED BY A

NON-OBLIGATION OF THEIR IMPLEMENTATION»

UNKNOWN AUTHOR, THE 19TH CENTURY.

Classification is currently not carried out (will perhaps start in near future).

Upon conducting tests, the certification bodies do not insist on implementing absurd

requirements.

The Federal Customs Service is obliged to insist on the evidence of the product conformity

to technical regulations when importing a boat to the territory of Russia (certificates and

the classification certificates (CC)) but currently they do not.

When registering boats, SISB does not require the submission of certificates.

BUT … !

TR CU 026/2012 : Art. 9 Products which have not passed confirmation of their conformity to

requirements are excluded from circulation.

Code of Administrative Violations: confiscation of products and a fine up to 1 million RUR. (€

13,500), the suspension of the company for up to 90 days.

Criminal Code: penalty, forced labor, imprisonment for up to 10 years.

BUT … !

All bona fide manufacturers and importers certify their products, despite the absence of a

strict control!

COMMENTS:

Therefore, in effect nobody checks the existence of the certificates of conformity

and CC in practice, and there is nothing to prevent sale of uncertified products.

However, the legislation sets forth considerable sanctions for trading in products

without required documentation.

The mere fact of selling of items without proper certificates constitutes an

administrative offence and is punished by a pecuniary penalty, confiscation of

products, and – in the worst case – suspending the company’s operations for up to

90 days.

The market of small size vessels is not large, and therefore it is not subject to

continuous supervision by controlling authorities (as opposed, for instance, to the

market of food products, etc.), but a company could face an inspection at any time.

If a consumer suffers an accident caused by a product, which does not satisfy the

mandatory safety requirements, the seller and/or the manufacturer will bear criminal

liability.

Therefore all conscientious manufacturers and importers try to obtain the

certificates as soon as possible.

What happens in the future?

Eurasian Economic Commission has passed a decision to introduce amendments in the

TR CU 026/2012 “On the safety of small size vessels”.

Expected entry into force of the new edition– midyear 2017.

Translation from Russian version