Vladimir Putin: The problem is well known. Did you discuss custom clearance on the border where the goods enter the country and not only in capital cities and custom clearance points? How is this work going?

Andrei Belyaninov: Mr Putin, on June 26 you gave instructions to develop measures to move customs formalities to the external borders of our country. In general, it is a daunting task because all these past years the customs development strategy in Russia has been focused on interior regions, for which there were valid reasons. What was done was largely correct and fair.

We have worked hard; on August 26 the Board of the Federal Customs Service adopted a Concept for moving custom clearance to the external borders.

The first stage is to transfer custom clearance from Moscow and the Moscow Region and from St Petersburg in 2008-2009. Moscow alone has 58 custom clearance points, obviously far too many.

In any case it is a very serious measure, we are preparing for it and are already taking early steps. The important thing is that this move has the trust of the business community because it is necessary to build transport and logistical centres that include custom clearance on the borders. This cannot be done without big business, without the participants in foreign trade interested in promoting these activities.

But we are confident that we will cope with the task. Having said that, we have divided it into two stages, until 2011, but apparently work will continue beyond 2011. We are already taking the early steps.

The main aim of the Concept is to ensure the country's economic security. Along with the physical movement of customs clearance we see that we can now direct the transportation of goods in the interests of the country. Until recently customs took their cue from business. At the time when there was a shortage of everything and when all sorts of goods, both proper and shoddy ones, were imported, customs followed the lead of business. Now the situation has reversed and we are able to lead business, provided the rules we have developed and will continue to develop are observed, because it is very important that this work proceed in stages. I think business will come to believe in us.

Vladimir Putin: When most custom clearance was concentrated in the capital cities, corruption did not decrease.

Andrei Belyaninov: These processes can be more easily controlled and corruption can be more easily stopped at the border. There is one important factor that will impede our work, and that is the lack of professional personnel in the regions where we are going to move custom clearance. But we have some reserves, for example, the customs infrastructure on the southern borders has reserve capacity. We will direct commodity flows there together with the ministries and agencies concerned.

Vladimir Putin: How are you approaching this task today?

Andrei Belyaninov: We believe that some customs posts and warehouses in the Moscow Region will be closed before this year is out. We have done this work successfully in St Petersburg where we moved customs posts out of the city. We already have an idea how custom clearance points will be moved towards the border in the Far East. So the plan for moving custom clearance from Moscow and the Moscow Region is in place and we are already working under that plan without waiting for the Concept to be approved.

Vladimir Putin: All right. You have mentioned the country's economic interests. I have talked with some governors in Siberia. They claim that the flaws in our rules and customs legislation result in transport planes that pass through the Russian Federation - including the capital cities and the European part - being unable to get refueled due to some customs procedures or their absence. They have to land for refueling in neighbouring states, as a result of which our transport enterprises suffer losses or, to put it more precisely, miss some profits. This is called opportunity costs.

Andrei Belyaninov: I would take issue with the governors because there are no customs restrictions regarding the place where goods and destinations can be declared. There is a customs office in practically every Russian region. Speaking about the Siberian regions, planes can land in Novosibirsk and Omsk. A customs inspection can be carried out there if there are suspicions of some unlawful actions. But there is nothing to prevent our transport companies, our carriers and exporters and importers from unloading in Novosibirsk or in Omsk and going through the customs formalities.

Vladimir Putin: It is not about unloading. The whole point is for the transit flight to be able to move on.

Andrei Belyaninov: If you are talking about transit, they open a transit regime, refuel and fly to the destination in the Russian Federation where they initially planned to fly. I see no problem actually.

Vladimir Putin: But they do see a problem, they say there are obstacles that force carriers to use the airports in neighbouring countries.

Andrei Belyaninov: Perhaps this is because the Customs Service has not worked enough with the governors. I promise that I will meet the governors of the Omsk and Novosibirsk Regions and explain the lay of the land to them. We will solve all the problems.

Vladimir Putin: Agreed.