Russia tightens customs controls, severs trade ties despite contrary statements

DAILY SABAH WITH AGENCIES
ISTANBUL
Published 26.11.2015 17:38
Turkish exports to Russia make up most of the workload of the Black Sea port of Samsun in northern Turkey. (DHA Photo)
Turkish exports to Russia make up most of the workload of the Black Sea port of Samsun in northern Turkey. (DHA Photo)

Since the Russian Su-24 fighter was downed by Turkey for violating its airspace on Tuesday, reports and complaints regarding Russia's implementation of non-reciprocal practices in trade ties and customs control have rapidly surfaced, despite statements by the Kremlin stating to the contrary.

Kremlin Spokesman Dmitry Peskov told journalists during a conference call yesterday that Russia is not considering sanctions against Turkey or imposing an embargo on food imports, but is waiting for an explanation from Turkish officials regarding the downing of the Russian jet.

However, yesterday Russian Prime Minister Dmitry Medvedev once again stressed that Russia is preparing a raft of retaliatory economic measures against Turkey. "The government has been ordered to put a system of responsive measures in place to react to this type of aggression in economic and humanitarian spheres," Medvedev told a cabinet meeting in televised comments. He said that general, punitive measures could include the halting of joint economic projects, financial and trade restrictions and changes to customs duties.

These measures would also target the tourism and transportation sectors, labor markets and "humanitarian contacts," Medvedev said. "I propose doing all of this within a period of two days so that we can move towards setting up the appropriate procedures as quickly as possible," Medvedev told government ministers.

Furthermore, Russian Minister of Economic Development Alexey Ulyukayev said that the Turkish Stream gas pipeline project falls under the restrictive measures to be taken against Turkey, Russian state-owned news agency Sputnik reported yesterday. "This project is no different from any other, we are talking about our investment cooperation [with Turkey], it is potentially big investment project, and, just like any other project, it falls under the law on economic sanctions," Ulyukayev said. Construction of the Turkish Stream natural gas pipeline, which was intended to carry Russian gas to Europe via the Turkish-Greek border, was scheduled to begin in June, but was postponed. A formal agreement was expected be signed on Dec. 15, when Russian President Vladimir Putin and President Recep Tayyip Erdoğan are scheduled to meet in Russia. The Turkish Stream project was announced in December 2014 during Putin's visit to Ankara. Russia proposed the project as an alternative to the original one, which was made in collaborations with Bulgaria.

The restrictions against Ankara may also include the Akkuyu Nuclear Power Plant, which is currently under construction in the southern province of Mersin in Turkey, Ulyukayev said.

Ruslan Balbek, deputy prime minister of the internationally unrecognized administration of Crimea, said that around 30 Turkish investment projects have been suspended in the peninsula. Home to the Turkic people of Crimean Tatars, which make up 10 to 15 percent of the population, Crimea was illegally annexed by Russia in March 2014.

Aside from this recent crisis, Turkish exporters have already been affected by the international sanctions against Russia and a strong U.S. dollar against the Turkish lira. According to the Turkish Exporters' Assembly's (TİM) data, Turkish exports to Russia were $5.072 billion in the first 10 months of 2014 but decreased to $3.125 billion in that same period of 2015.

One of Turkey's leading business associations, the Independent Industrialists' and Businessmen's Association (MÜSİAD), has also voiced its concern over trade relations with Moscow following the country's downing of a Russian warplane. "Of course, it is not possible to say that we have no concern [on Russian trade]," chairman Nail Olpak said yesterday. However, he emphasized the depth of current relations between the two countries, adding that: "The incident can be solved within the framework of international law and [in the] two countries' interest."

Passport control has reportedly been tightened in the last few days with around 40 Turkish nationals being denied entry into Russia. Passengers arriving from Russia stated that they have been coming across with an increased number of questions; some claiming that the delays they experienced were purposefully enforced. Both countries had removed visa requirements for visitors in 2011.

On Wednesday, the International Transporters Association (UND) published a statement on its website, stating that all Turkish goods are being stopped at Russian customs gates. "According to the information that we received from our members, due the developments on the Syrian border that were recently fully realized by Turkey and Russia, travelers of any nationality who are carrying Turkish goods are currently forced to wait and are not allowed to enter Russia," the statement said, adding that these developments have been reported to Turkish authorities.

UND officials stated yesterday that Turkish trucks and exports will be subject to full inspection, which means that all items will literally be inspected one by one. Depending on the country of origin, export goods are usually subject to simplified procedures.

UND Executive Board Chairman Fatih Şener said that the entry of Turkish trucks into Russia has always been problematic, however, after the jet incident, Russia closed its border gates to Turkish trucks. Stating that Turkish exports to Russia range from food and beverages to textiles and machinery, Şener said, "Annually, we make 36,000 trips to Russia. Currently 100 to 150 trucks are being forced to wait at Russian check points. We often face such situations, however, this time we are faced with ambiguity. No explanations have been given to drivers coming from Georgia, while drivers coming from Ukraine are being told that a full inspection will be implemented. This means all goods will be unloaded, inspected one by one and then reloaded. Such work could take days."

Stressing that such practices can be implemented based on the initiatives of those countries, Şener said that it requires a certain ratio of risk, which is applicable to 2 percent of all trucks. Russian authorities are within their right to implement decisions in the wake of political developments, he said, adding that the current situation would harm Russia as well. "Last year Egypt banned the transit passage of Turkish trucks for political relations. Such actions seem normal in the Middle East; however, Russia is an important country - a member of the World Trade Organization – and should not act like Egypt. We hope that the current delays in Russia customs will end."

Meanwhile, the Russian Interfax agency reported that Russia will terminate its poultry exports from Turkey effective Dec. 1. The poultry exports market was expected to reach $23.5 million by the end of 2015.

The floriculture sector is also among the sectors that were affected by the Russian authorities' recent decisions. Osman Bağdatlıoğlu, chairman of the sectoral exporters union, said that six Turkish trucks carrying flowers were denied entry on Wednesday, while shipments by planes were also temporarily suspended. He added that the current obstacles Russia is putting in place are reactionary, rather than official decisions.

Bağdatlıoğlu said that they have faced cancellations from Russian Eurasia Plant Fair / Flower Show being held in Istanbul yesterday. Sector representatives participating in the fair told Daily Sabah that shipments were cancelled the very same day that the jet was downed, while ongoing negotiations were halted. Florists are now looking for alternative markets, such as the United Arab Emirates.

As the second-largest market in the world, Russia imports $1 billion worth of flowers annually, and it is among the biggest trade partners of the Turkish floriculture sector.

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