'Consolidated' invoice lands Odessa copier importer in nightmare smuggling investigation
The International shippers have tagged Ukraines Customs Service as Europe`s most rapacious outside of war zones.
Copier importer Dimitry Skvertsov says that’s putting it mildly.
Describing a shocking, year-and-a-half ordeal he recently endured trying to get a mere 20 copiers through Ukrainian customs, Skvertsov does not mince words: ‘Not in my worst dreams did I expect that kind of behavior by customs officials. The copier shipment was beyond the norm even by our Ukrainian standards.’
Skvertsov is the head of the Odessa-based Sagitarius company, which as the chief distributor for Ricoh in southern Ukraine has been successfully importing copiers since 1996. The 11-person outfit has always experienced some degree of administrative hassle at Ukrainian borders. But it has never experienced anything as bad as the story that follows.
It all began when a truck rumbled up to Sagitarius’ warehouse on Feb. 7, 1997, completing an uneventful run across Germany, Poland and Ukraine with a load of 20 copiers. The driver possessed all the required documents: a shipping bill of lading, a freight invoice, proof of insurance, and attestations from Ukraine’s myriad inspectors that they had found the copiers to be free of radiation, ecological threat and insect infestation. He even had copies of both original contracts between Sagitarius and the shipper, NRG International of the United Kingdom.
NRG made one very costly error, however: it sent only a single invoice covering the goods involved in both contracts – a tactic known in the trade as ‘consolidation.’ This went against the Ukrainian rule requiring one invoice per contract. Suddenly, Sagitarius was being formally charged of smuggling by customs.
The solution in most countries would have been for Sagitarius to write a letter to Customs explaining the glitch. Skvertsov immediately proposed precisely that to customs’ agents meeting the shipment. With 34,000 German marks of goods hung up and a queue of customers lining up to get their copiers, he says, he would have been more than willing to pay duty on each and every copier.
It wasn’t quite that easy. Vladimir Orlovsky, the assistant director of the Odessa Oblast customs’ anti-smuggling program, ordered the copiers impounded immediately. Then, over the next month, he refused to honor five updated invoices sent by Sagitarius. Orlovsky used that time instead to launch an investigation of criminal smuggling against Sagitarius, punishable by a Hr 15,000 ($7,900) fine and confiscation of $20,000 worth of copiers.
Skvertsov applied to the Odessa Trade-Industry Palace, a government organization that often arbitrates disputes between commercial and government agencies. Agents from the Trade-Industry Palace arrived at the Odessa customs’ bonded warehouse on March 20 to inspect the copiers. Customs officers refused to admit them.
‘My only choice was to take the matter to a higher authority,’ Skvertsov said.
In May, he wrote a letter of complaint to Vitaly Pshenichny, the director of Odessa’s customs branch. Simul-taneously, NRG, the European distributor for Ricoh and Canon equipment, also wrote Pshenichniy apologizing for including only one invoice with two contracts. Neither gesture had any effect.
In August, NRG Sales Director Henrik Maage himself flew to Odessa to discuss the matter with Orlovsky. The latter proved to be less than cordial as a host: he threatened Maage with criminal prosecution and up to 5 years in a Ukrainian jail if convicted of smuggling, according to Skvertsov. Maage flew back to England. The copiers stayed put.
The next Orlovsky heard from customs was when two customs officers, Nikolai Kostin and Aleksandr Balshchuk, arrived at Sagitarius’ headquarters on Odessa’s high-rent Deribasovskaya Street in September and proceeded to confiscate two large trash bags full of company shipping documents, plus two computers – in other words, anything that might conceivably contain information incriminating the company. Skvertsov filed a complaint with the Odessa police department on Sept. 30, charging that his firm had been harassed by customs officers.
Skvertsoy recalled that when Kostin returned to the Sagitarius office to drop off the computers, he snapped, ‘No company has ever won a war with the government; do not try to fight us, you cannot win.’
It looked like Kostin would be forced to eat his words when Aleksandr Medentsev, the Odessa city chief prosecutor, threw out the smuggling charge for lack of evidence on October 6 and ordered the copiers released. But when the copiers had still not been returned to Sagitarius by the end of that month, Orlovsky sent a letter to his superiors in Kyiv expressing that he did not trust the prosecutor’s ruling.
Sure enough, the copiers remained impounded, a circumstance that led Prosecutor Medentsev to instruct Pshenichniy to ‘bring Balshchuk and Kostin to administrative disciplinary responsibility’ for effectively ignoring a court order.
Kostin and Balshchuk countered in a letter to Medentsev: ‘It is impossible to speak of any real incorrect behavior on the part of customs officers if the man charged with punishing such behavior is the same person who gave orders to stifle the Sagitarius company in the first place – Vladimir Orlovsky.’
As the stand-off persisted, Sagitarius sued Customs in Odessa’s Malinovsky oblast court. ‘Inasmuch as the smuggling charge has been dropped against Sagitarius, Customs has no right to retain the copiers further,’ read the January 30 1998 decision of that court.
Intitially, it looked like just another Pyrrhic victory for Skvertsov and Sagitarius. Skvertsov’s failed to receive the copiers from Customs over the next two months. After the Malinovsky Court tried to pass an injunction demanding that Customs hand over the goods, Pshenichniy wrote his Kyiv superiors on March 27 arguing the Malinovsky Court was operating outside its jurisdiction.
Pshenichniy’s argument was precluded by a May 26 ruling of the Odessa Regional Court that the lower Malinovsky Court had in fact operated within its jurisdiction.
Finally, on June 25 1998 – a full one year and a half after the truck arrived from Holland and five months after the official cancellation of the smuggling charge – Sagitarius received its copiers.
‘It was a very difficult shipment,’ Skvertsov said in mammoth understatement.
Ukraine Customs Committee spokesmen in Kyiv when contacted for comment said they were not aware of the Sagitarius shipment. Customs Committee spokesman Aleksandr Kotov failed to return the Post’s phone calls after receiving a detailed report of the case from the Post.
