Electronic wood accounting system in Russia deprives exporters of zero VAT

Information Technology in the Forest Industry

Main article: Information technologies in the forest industry

Unified Federal Forest Database of Russia

Main article: Unified Federal Database on Forests of Russia

Federal State Forest System

Main article: Federal State Forest System

History of LesEGAIS

2023: Electronic wood accounting system in Russia deprives exporters of zero VAT

On June 26, 2023, it became known that the Vologda companies of the timber industry appealed to the Union of Timber Manufacturers and Timber Exporters with a request to initiate changes in the legislation on wood registration and exclude lumber from it. The problem is that the LesEGAIS system deprives exporters of zero VAT.

According to the Kommersant newspaper, after the modernization of LesEGAIS, the requirement to enter information into the system began to apply to places of storage and processing of wood. However, in the current geopolitical situation, logistics chains have significantly changed during the sale of forest products, including lumber, for export. Because of this, when transporting by several modes of transport, exporters have to organize several storage places in different regions. And for each of them it is necessary to enter information into LesEGAIS, as well as to form new electronic accompanying documents and terminate the old ones.

Vologda companies asked to change legislation on wood accounting and exclude lumber from it

The new balance sheet model, reflecting the remnants of products in warehouses, was supposed to be launched on January 1, 2022, but its withdrawal from test mode was delayed. After the final entry into force of the declaration indicating the number of electronic documents for the goods, you will have to form in the place of creation of the last electronic document (and not at the enterprise). Moreover, an electronic accompanying document (EDMS) for products can be issued within the framework of the tested balance system only when a positive balance in the warehouse is confirmed in LesEGAIS. All these changes lead to the fact that transportation leaves the export regime, and enterprises will not be able to apply the zero VAT rate under Art. 164 of the Tax Code.

Thus, he notes, if a Kommersant legislative norm is adopted obliging the submission of a customs declaration at the place of formation of the last EDMS, the cost of transporting goods from the manufacturer to the ports of the Far East will increase by 20% - the VAT rate for transportation inside. RUSSIAN FEDERATION^[1]

2022: Mishustin reported on the work of GIS wood control

On January 17, 2022, Deputy Prime Minister Victoria Abramchenko, at a meeting with the head of the Government of the RFMikhail Mishustin, spoke about the work of the digital timber control system, which was launched in an updated form on January 1.

From this day, the transportation of wood and its processing products is allowed only if there is an electronic accompanying document. As Mishustin explained, this is a kind of digital passport, without which the movement of wood will be impossible. Its movement can now be tracked through a digital system along the entire route - from the logging site to the processing enterprise and customs authorities.

Mikhail Mishustin reported on the work of GIS wood control

According to Abramchenko, by January 17, 2022, more than 20 thousand users were registered in LesEGAIS. Over the holidays, more than 120 thousand electronic accompanying documents were formed for the transportation of wood with a total volume of more than 5 million cubic meters.

The Deputy Prime Minister also stressed that the wood turnover tracking system did not allow removing from the country a single cubic meter of unprocessed wood of valuable deciduous and coniferous species. At the same time, the work of the GIS made it possible to identify several illegal schemes that were previously used by unscrupulous market participants.

For example, one document could take out an unlimited amount of wood from one plot. After all, it was in paper form, and information about the volumes was not automatically compared... Now, thanks to the system and electronic passport, such "gray" wood cannot be legalized. And the relevant market participants will have to get out of the shadows, - said Victoria Abramchenko.

She gave another example that concerns illegal subleasing. Forest rentiers give "in the gray" part of forest plots in the so-called sublease without documents. And subleaders without filing a forest declaration carry out felling without having rights to this wood. Such transactions remained in the shadows, the state did not see the turnover of wood and received less taxes.^[2]

2021: The owners of warehouses and forest processing facilities were obliged to enter information about their facilities into the system

From July 1, 2021, the rules for using the LesEGAIS information system in terms of entering data on transactions with wood for all participants in the forest industry will change. This was announced on June 30, 2021 by TAdviser Roslesinforg.

From July 1, the ForestEGAIS wood traceability system will start working in Russia
Photo source: partnerkin.com

The owners of warehouses and forest processing facilities are obliged to enter information about their facilities into the system. While the transition period will be valid from July 1 - until the end of 2021. Subsequently, loggers will have to enter information about the volume of wood, its type and size, delivery route and transport into the information system. If such data are not presented or the legality of wood is not confirmed, transactions will be blocked from January 1, 2022.

According to Deputy Prime Minister Victoria Abramchenko, on behalf of the President of Russia, the Government of the Russian Federation is implementing an action plan for the development and decriminalization of the forest complex. One of the key measures is the digitalization of the industry, which will allow the introduction of a system of traceability of wood movement at all stages.

From July 1, traceability points appear in the digital system - logging sites, warehouses, factories, customs declaration and timber export points. This is necessary to link the specific volume of wood harvested, the points of movement from the plot to the warehouses and subsequent processing. Of course, there will be no sharp blocking of transactions, forest users have six months to test the functionality. Businesses should get used to the fact that every action in the forest should have a digital trace. But from 2022, if there is no "electronic passport," there is no confirmation of the legality of the origin of the wood - its further implementation will be impossible, Victoria Abramchenko said.

Thus, the state is implementing one of the first steps to whitewash the forest industry. The electronic system will contain all information about the turnover of wood, with its help control over the use of forests will be strengthened.

And from January 1, 2022, an electronic accompanying document will make it possible to record the movement of wood and timber from point of departure to destination, which will enable related departments to carry out control and supervisory measures. The system will include information on the coordinates of forest plots and logging sites, which will allow automatic checks for the legality of forest use by comparing the data available in the system with space images.

In addition, the system will compare information (grade, breed composition, etc.) from title documents for wood harvesting, as well as information from other declarations on transactions with wood with the actual volume of wood recorded in the transaction. All these functions will allow you to track the chain of movement of wood from the harvest to the end user.

The forest declaration and report on the use of forests can be submitted through the federal or regional portal of public services. The report on the balance of wood and processing facilities must be submitted once before January 1, 2022.

The Deputy Prime Minister recalled that the Government is implementing consistent steps to improve the situation in the industry. A regulatory regulation was prepared, which is aimed at preserving and rational use of forests, excluding cases of illegal use of wood. Among other changes, the law forbade persons who do not have the right to harvest, as well as transfer forest plots to sublease, to be in forests with logging equipment.

Шаблон:Quote 'author = noted Victoria Abramchenko.

According to Alexander Protchenko, head of the Forest Management department of Sveza, the business supports the initiative of the authorities, which seeks to exclude criminal and fraudulent schemes during logging and removal of forests, to bring the volume of logging in line with the volume of wood sales.

For responsible forest users, the introduction of an electronic form of accompanying documents is of significant benefit: paper document circulation is reduced, and wood volumes are simplified and tracked. We also expect that the measures introduced will make it possible to more clearly calculate the volume of procurement and avoid a shortage of raw materials in the domestic market. The ForestEGAIS wood movement accounting system is especially important on the eve of the introduction of a ban on the export of unprocessed forest from Russia from January 1, 2022, specified Alexander Protchenko.

At the same time, the expert noted that the next six months will have to test what difficulties prevent loggers from fully complying with the requirements of the law and whether additional mechanisms are needed to insure the processes of entering data into the accounting system.

Analysis and comparison of information on transactions, wood movement and places of its storage will seriously decriminalize the industry. The most important thing is that real control over the turnover of wood and the work of tenants of forest plots will be introduced. In Russia, forest reform is being implemented according to strict rules: if logging is illegal, wood cannot be implemented. There are no difficulties for conscientious loggers, but for the gray market such digital control will not leave a choice, you will have to move to the "white" plane, said Chairman of the Russian Ecological Society Rashid Ismailov.

The transition to the official practical phase of the implementation of additional functionality of the unified forest accounting system is, without exaggeration, an important step in the development of the Russian forest industry. Segezha Group actively participated in testing and refinement of LesEGAIS in the regions of presence. I note the high level of coordination of the efforts of business and authorities representatives, the complete absence of formalism and bureaucracy in solving work issues. In a very short time, it was possible to develop the optimal form of functioning of LesEGAIS, in relation to the current regulatory framework. Of course, there remains a big reserve for further improvement of the system and we are ready for painstaking joint work to achieve the best result, Nikolai Ivanov, Managing Director for Implementation of State Development Programs and Forest Policy of Segezha Group, notes.

2020

An experiment on the traceability of wood turnover starts in Russia

An experiment on the traceability of wood turnover starts in Russia. This became known on December 30, 2020.

The system of traceability of wood turnover and transactions with it (LesEGAIS) will be launched in experimental mode from January 1, 2021, Deputy Prime Minister Victoria Abramchenko said.

Timber merchants of the Vologda, Arkhangelsk, Tver and Irkutsk regions will take part in the experiment. Segezha Group, the ULK group of companies, will also join the testing. Roslesinforg will analyze the work.

We will monitor the wood at all the main points of its movement. First, we fix the volume of wood allowed for cutting and actually cut down on the logging site. At the stages of wood movement, accompanying documents should be created, which will also be recorded in LesEGAIS, - Victoria Abramchenko, Deputy Prime Minister of the Russian Federation

If at any subsequent stage the system does not receive confirmation of the legality of the origin of the wood, transactions will be blocked, and the sale of wood will become impossible. The blocking rule will be enshrined in the Forest Code.

The experiment will last until June 30, 2021, then the system will be launched on an ongoing basis throughout the country.

The press service of the Government noted that due to the lack of proper control, according to expert estimates, from 10 to 30 million cubic meters of wood are illegally cut down in Russia every year.

Abramchenko proposed linking all chains of wood movement in a single system at the end of October at the government hour in the Federation Council.

On September 30, 2020, President RFVladimir Putin instructed to ban the export of unprocessed forest from Russia from the beginning of 2022 and proposed introducing the posts of regional forest inspectors.

As Octagon wrote, activists who are trying to save the forest are confident that there will be little ban on the export of round timber to rid the industry of crime^[3] on^[4].

Ministry of Natural Resources will finalize LesEGAIS

The Ministry of Natural Resources has developed proposals for finalizing the functionality of the unified state automated information system for wood accounting (LesEGAIS). TAdviser was informed about this by the Ministry of Natural Resources on March 2, 2020.

The Ministry of Natural Resources proposes to make sure that the system not only takes into account and traces transactions, but allows and accepts them.

In particular, it is proposed to include the place of storage in the chain of traceability of wood turnover and oblige to enter primary accounting documents into LesEGAIS with spatial reference - a geotag that will indicate geographical coordinates, the date and time of the operation with wood. The implementation of this proposal will require the introduction of a new industry principle of reporting - through a digital blockchain platform that allows offline control of wood turnover. This requirement will be mandatory for all places of storage of wood, so that it is clear which wood and in which specific place is currently located, - noted in the Ministry of Natural Resources.

Another proposal of the ministry is to maintain the state forest register in digital format on the LesEGAIS technological platform and transfer all users to access LesEGAIS through the Public services portal.

These additional capabilities of the system would speed up the updating of information about forests formed on paper, as well as simplify the user registration system, the Ministry of Natural Resources noted.

The ministry also drew the attention of TAdviser that LesEGAIS already has the ability to constantly exchange information with the databases of the FCS, the Ministry of Industry and Trade, the Ministry of Internal Affairs, Rosprirodnadzor, Rosselkhoznadzor and other executive bodies.

Rosleskhoz concluded agreements on information interaction with the help of LesEGAIS with the FCS, Rosfinmonitoring, FSSP and the Ministry of Emergencies, is working on the issue of concluding an agreement with the Federal Tax Service, the Ministry of Internal Affairs and Rosprirodnadzor, informed TAdviser in the Ministry of Natural Resources.

2019

The Federation Council made recommendations for the revision of LesEGAIS

Following the meeting of the Committee on Agrarian and Food Policy and Environmental Management and Rosleshoz, the Federation Council noted a number of shortcomings of the unified state automated information system for wood accounting and transactions with it (LesEGAIS) and gave appropriate recommendations for its revision to the Ministry of Natural Resources and Rosleshoz. This follows from the resolution of the Federation Council, issued on January 30, 2019.

During the operation of LesEGAIS, a number of significant shortcomings were identified, the resolution says.

As such shortcomings, the document notes:

• lack of the possibility of interaction between information systems of the federal customs service and LesEGAIS using a unified system of interdepartmental electronic interaction;
• the absence of mechanisms for tracking the volume of wood at the time of harvesting and the volume of wood specified in the foreign trade contract;
• lack of information on wood transportation.

In the form of recommendations to the Ministry of Natural Resources and Rosleskhoz, the resolution gives:

• acceleration of works on connection of LesEGAIS to the unified system of interdepartmental electronic interaction;
• provision of correlation of information of the state forest register and information contained in LesEGAIS.

Goals and objectives of creating the state information system "Forests of Russia"

Connection to the interdepartmental electronic interaction system

Since January 23, 2019, information from the unified state automated information system for wood accounting and transactions with it (LesEGAIS) has become available in the system of interdepartmental electronic interaction. A message about this appeared on the official website of the system on January 24, 2019.

As noted on the site, this will raise to a new level the possibility of using information from the system by all interested federal departments to combat illegal timber trafficking. Related control agencies, in particular - the federal customs service, the Ministry of Internal Affairs, the federal tax service, Rosfinmonitoring, are provided with the technical opportunity to receive information in automatic mode and, if necessary, integrate it into their departmental information systems.

Order of Alexey Gordeev to extend LesEGAIS to all transactions with wood

The Deputy Chairman Governments of Russia for Issues agriculture Alexey Gordeev instructed to extend the State Automated Information System for Wood Accounting (LesEGAIS) to all transactions with, and wood and timber products make its use mandatory for market participants. After completion, LesEGAIS shall monitor the entire forest use chain - from harvesting to the supply of forest to consumers. As reported on January 23, 2019, with RBC reference to the Gordeev apparatus, the order was given following a meeting of the interdepartmental working group to combat illegal timber harvesting and circulation.

For officials controlling logging, personal responsibility is supposed to be introduced, and administrative responsibility is provided for unreasonable sanitary felling.

In accordance with the decision of the Deputy Chairman of the Government, Russia it is necessary to optimize both the system itself, as well as the mechanisms for determining the volume of illegal harvesting and turnover of wood and the procedure for confiscating equipment and equipment for illegal felling. To this end transport , the government will oblige to connect logging to the system. GLONASS

In addition, Alexey Gordeev instructed Rosstat to ensure a reliable reflection of the volume of forest harvesting in state statistics. According to experts, every year up to 20 million cubic meters are not included in the statistics. m lumber, in particular, harvested by small and medium-sized businesses. In particular, according to official data for 2014-2017, the volume of exports is almost 12 million cubic meters. m was higher than the volume of lumber produced in Russia. In total, the volume of illegal deforestation in Russia is 20-25% of legal forest use, the Federation Council cites data with reference to the assessment of international organizations.^[1]

The issues of countering illegal logging are comprehensive, interdepartmental in nature, and the coordinated work of all interested authorities is extremely important here. LesEGAIS should fully earn throughout the country and become a real mechanism in the fight against black loggers and shadow business, the Deputy Prime Minister is convinced, urging Rosleskhoz to work more actively with the Ministry of Internal Affairs and the Federal Tax Service to eliminate "loopholes" to bypass LesEGAIS.

2017: Pilot in Irkutsk region

In 2017, a pilot project was implemented on the territory of the Irkutsk region to combat "black" loggers.^[2]

2016

Completion of works on creation of NSI control subsystem

In 2016, the main work on the project of creating a subsystem for the management of regulatory reference information (PNSI) of the Unified State Automated System for Wood Accounting and Transactions with It was completed. The PNSI is based on the Unidata data management platform.

The platform was supplied by a development company, and the company was the "Unidata" contractor for the PNSI project. "TaskDate"

The project was carried out in the interests of the Federal Forestry Agency and the Federal State Budgetary Institution Roslesinforg (a subordinate institution of Rosleskhoz), a forest accounting organization in Russia.

Purpose of the system

The unified state automated system for accounting for wood and transactions with it (EGAIS) is designed to collect and process information:

• About legal entities, individual entrepreneurs, citizens engaged in timber harvesting;
• On lease agreements for forest plots;
• On contracts for the sale and purchase of forest plantations;
• On contracts for the sale and purchase of forest plantations for the own needs of citizens;
• On the right of permanent (indefinite) use of forest plots;
• On contracts for free use of forest plots;
• On forest declarations;
• About reports on the use of forests;
• About legal entities, individual entrepreneurs, citizens, foreign organizations that have made transactions with wood;
• On declarations of timber transactions;
• On marking of wood of valuable forest species exported from the Russian Federation;
• On contracts for works on protection, protection, reproduction of forests, including conditions on the purchase and sale of forest plantations;
• On participants of foreign economic activity, carrying out the export of timber of valuable forest species.

To process this information, the System uses more than 100 reference books, which are processed in the specialized subsystem of regulatory reference information management (PNSI), which is based on the Unidata platform.

EGAIS wood accounting covered the entire turnover of round timber in the country, including information about the seller and buyer, the composition of wood and its volumes passing from one owner to another. Thanks to this, information is known about the owner of the wood at each stage of its movement, the actual volume of wood harvested, purchased and sold, and the chains of transactions with it. More than 33 thousand accounts have already been registered in the system, information on more than 3 million documents (lease and sale agreements, forest declarations, reports on the use of forests, state contracts, etc.) has been entered. For the export of wood abroad, the EGAIS has entered information on the rock, assortment and volume of over 370 thousand individually marked logs of oak, beech and ash.

Structural diagram of EGAIS of wood accounting

Project Progress

The main work on the creation of the PNSI was carried out in 2015-2016. In the first phase (2015), storage and data collection tools were developed. The development and implementation of other functions was carried out simultaneously with the work of users. Thanks to the correct organization of design processes, this was painless for users.

In the process of collecting data, more than 4 million documents, 30 thousand users were uploaded to the System. Thanks to the functionality of Unidata, the System built relationships between harvesters, sellers and buyers of wood, which made it possible to build and visualize wood turnover chains and identify illegally harvested volumes.

One of the directories processed in the PNSI is the directory of counterparties (YL, IP, FL, foreign companies not registered in the Russian Federation). The usual situation for business, when the legal entity changes the name or other details, did not become a problem for the PNSI, all historical data were linked to each other, which allows you to track real wood turnover chains.

The functionality of finding and processing duplicates helped to restore order in the data and eliminate "double" volumes of wood harvesting and sale.

In 2016, work was carried out to improve the quality of data. Added various checks for the correctness of data filling, integration with the Federal Information Address System database, Unified State Register of Legal Entities/IP. Integration with the Unified State Register of Legal Entities/Individual Entrepreneurs is implemented through SMEV 3.0 and does not allow entering non-existent counterparties into the System and, under their guise, carrying out illegal transactions with wood.

In addition to the Unified State Register of Legal Entities/Individual Entrepreneurs, the System is integrated with several departments through SMEV 3.0. All questions on synchronization of reference books required for successful interaction of systems are solved by PNSI.

in 2017, after a change in legislation in the PNSI, lumber was added to the directories of wood species and varieties, as well as some other values ​ ​ were adjusted. The functionality of the PNSI made it possible not to affect historical data and not to violate analytical reports.

Monitoring the execution of documents, formation and visualization of reports in the form of tables, graphs, diagrams with reference to geographical maps, analysis of data in the EGAIS of wood accounting became possible thanks to the subsystem for analyzing and evaluating data implemented by BARS Group. Among the indicators of the reporting forms: wood harvesting by territory, composition, its dynamics, wood volumes with the right to felling declared for felling, transferred under transactions, the volume of exported wood, the area of ​ ​ felling of wood, forest fund, report on wood operations, registers of records on contracts, government assignments and contracts, on the rights to use forest plots, forest declarations, etc.

Project Results

The project to create the PNSI lasted 1 year (2015), and since 2016 there has been support and development of the System in general and the PNSI in particular. The Federal Forestry Agency, as the main customer, has a system that allows you to track the turnover of wood and identify violations associated with them. After the introduction of the System, the volume of wood processing within the country has grown significantly.

2014: Creation of LesEGAIS

In 2014, the Unified State Automated Information System for Wood Accounting and Transactions with It (EGAIS Wood Accounting, or LesEGAIS) was created to control origin and turnover drevesiny.​

Notes