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The Inter-State Transit Corporation: a new format of economic and national security

Authors:
  • The National Academy of Sciences of Ukraine
  • The Toulouse Capitole University (France)

Abstract

This article is devoted to the study of the necessity, conditions, and prospects for establishing an Inter-State system for organizing and controlling the movement of transit goods for all types of transport, namely, in the form of an Inter-State transit corporation (which may include both public and private carriers, that is carriers may carry out transportation under the flag of the corporation and according to its rules). The Inter-State transit corporation can change the outdated, clumsy, and expensive forms of transit, turning transit into the cheap and fast delivery of international cargo. The motto of such a corporation can be expressed by the phrase: continuous transit without borders and barriers. The establishment of such an Inter-State transit corporation can be based on an open interstate agreement.
The Inter-State Transit Corporation: a new format of economic and national security
Abstract
Russia`s invasion of Ukraine has led to the need to resolve a long overdue issue, namely, the
establishment of an alternative Inter-State transit multi-transport system to organize a unified,
efficient, and inexpensive movement of goods.
This article is devoted to the study of the necessity, conditions, and prospects for
establishing an Inter-State system for organizing and controlling the movement of transit
goods for all types of transport, namely, in the form of an Inter-State transit corporation
(which may include both public and private carriers, that is carriers may carry out
transportation under the flag of the corporation and according to its rules).
The proposed new system is very remotely similar to the Customs Convention on the
International Transport of Goods under the Cover of TIR Carnets (TIR Convention, Geneva,
14 November 1975).
However, the mentioned TIR Convention only concerns transit by road and cooperation
with customs authorities. It does not cover other modes of transport, does not solve the issues
of establishing transit infrastructure, does not solve the issues of interaction between carriers,
does not solve the issues of other types of state control, and does not solve the problem of
reducing the cost and speeding up transit.
In turn, the Inter-State transit corporation can change the outdated, clumsy, and expensive
forms of transit, turning transit into the cheap and fast delivery of international cargo. The
motto of such a corporation can be expressed by the phrase: continuous transit without
borders and barriers.
The establishment of such an Inter-State transit corporation can be based on an open
interstate agreement, which can first be concluded between Poland and Ukraine, and later
other countries can join it.
Keywords: transit, corporation, economic, national, security.
The authors:
Volodymyr Marinich
Academic degree: International Lawyer/Master, PhD candidate Law, Specialist`s degree in
the field of study History, Specialist degree in the field of Automation and computer-
integrated technologies, Mining engineer (Specialist).
Structural units of the institution where the authors work: CEO and attorney at the Law
firm "FOX" (Kyiv, UA).
Contact email addresses: narmer.scorpion@gmail.com, mail@fox.com.ua.
Full official names and legal addresses of the authors' university: National University of
Life and Environmental Sciences of Ukraine (Heroyiv Oborony st., 15, Kyiv - 03041,
Ukraine).
ORCID: https://orcid.org/0000-0002-3206-1436.
Marina Miklush
Academic degree: International Lawyer/Master, Translation (English and German
languages)/Master.
Structural units of the institution where the authors work: CEO and attorney at the “FOX”
of Maryna Myklush” (Kyiv, UA).
Contact email addresses: edelwen@ukr.net , admin@fox.com.ua.
Full official names and legal addresses of the authors' university: none.
ORCID: https://orcid.org/0009-0005-2202-9482.
1. Introduction.
Russia's invasion of Ukraine showed a lot of weaknesses in all parties to the conflict
and their allies.
As it turned out, no matter how well the agricultural, industrial and energy sectors are
developed in the country, all this does not make sense if you do not have an effective multi-
vector commodity transport system.
This is shown by the problem with the export of grain from Ukraine, and the problem
with the export of metal products from Ukraine, and the problem with the movement and
distribution of military and humanitarian aid.
At the same time, a weak and inefficient transport system puts any country at risk not
only in the event of a military conflict, but also in the event of an economic conflict and in the
event of an economic crisis.
The transport component in the cost of goods very often reaches up to 50% of its price
and up to 90% of the time it takes to overcome the path from the state of raw materials to
finished products in the store.
Today, there are public and private carriers in Ukraine and Poland. However, on the one
hand, the state transport system is clumsy and not interested in solving promising tasks. On
the other hand, private transport companies, against the background of mutual competition,
are only interested in personal enrichment and are not ready to participate in creating a
common perspective.
This situation makes any country vulnerable.
In turn, an efficient transport system has been the basis for the independence and power
of the state for a long time,
Ancient Egypt was able to become a powerful state, primarily because it was able to
create an efficient and cheap transport and transit system for cargo delivery along the Nile,
connecting central Africa with the Mediterranean coast.
Ancient Rome became a powerful state not only because it knew how to fight well (in
those days many states fought well) it created the most efficient, safe and cheap transport
and transit system. Many city-states joined the Roman Empire without a fight only because
Rome offered businesses and small rulers more favorable economic conditions, and, first of
all, related to the delivery of goods.
That is, already in ancient times, states were able to understand the importance of the
transport system and were able to create a business-oriented transport and transit system.
Unfortunately, we have forgotten the lessons of the past.
But not China. Modern China, which by geographical standards is on the margins of the
world, could not come close to the economic conquest of the world even when it began to
produce cheap and high-quality products. His problem was the expensive delivery of goods.
No one needs a light bulb for a dollar if its delivery costs $3. But China solved this problem
by creating state-owned transport companies and many private companies supervised by the
state. And what do we see? – he instantly became a world leader in economic indicators.
You understand, there will always be those who will produce something. But the most
important of all will be those who will be able to deliver the ingredients for the production of
goods and the manufactured goods as quickly, cheaply and with the preservation of quality.
The current transport and transit system in the countries of the former Soviet Union is
not focused on anyone – this is already the Stone Age.
But Europe has not gone far either. The transport system of Europe is somewhere in the
Middle Ages, because it is focused primarily on passengers, and not on fast, cheap and high–
quality delivery of goods.
At the same time, the international legal framework does not limit but rather provides an
opportunity for the future development of the transport system based on such documents as
the Vienna Convention on the Law of Treaties (Vienna, May 23, 1969), International
Convention on the harmonization of frontier controls of goods (Geneva, October 21, 1982),
Convention on the contract for the international carriage of goods by road (Geneva, May 19,
1956).
In turn, by creating an efficient transport and transit system, we, first of all, will help
our own producers.
In the future, it is possible to begin the expansion of this system outside our countries
for the economic conquest of the rest of the world. And if we don't do it now, someone else
will. And if we do it, then we will always be the first and foremost in this system.
In reality, the economic war of states in the next 100 years will be won not by the one
who has the best technologies (technologies are gradually leveling off), but by the one who
will create the most efficient transport and transit system in the world - the one who will be
able to deliver technologies and raw materials to the recipient faster and cheaper.
And in this matter, both Poland and Ukraine are still far behind.
After all, no matter how Poland helps Ukraine and no matter how grateful Ukraine is to
Poland for this, we still remain strangers, because we are competitors.
It's time to change all this and become partners. At the same time, Poland and Ukraine
should become co-partners not on paper, but in the field of business at the state level. People
and companies of our countries should get access to each other's opportunities and act
together.
In turn, the first and most important stage of such a co-partnership is the mutual
integration of each other's transport systems. At the same time, such integration should begin
not on the basis of old medieval principles, but on the basis of a new transport and transit
system of the future.
At the same time, do not forget about the unique location of our countries. After all,
together we create a natural barrier between East and West (from the Baltic to the Black Sea)
between resources and technologies. And if you look at it from the other side, then this is
not a natural barrier, but a natural transit corridor.
It doesn't matter what will happen in Russia in the near future. There will still come a
time when the West will rush to the development of its resources and the introduction of its
technologies.
Europe, the USA and China will become direct competitors in this matter.
And it is at this moment that the most important question will be who will be able to
offer them the fastest, cheapest and most efficient transport and transit system for the delivery
of goods.
Remember the development of the British East India Company and you will understand
everything.
2. Inter-State Transit Corporation.
Of course, right now it is difficult to immediately design the structure and
implementation of this system, because we do not have enough data.
However, it is not difficult to indicate the basic principles of building this system at the
first stage – that is, on the basis of the two states of Poland and Ukraine.
2.1. The first principle is the physical construction of a group of direct, controlled and
closed transport (road and rail) corridors from ports on the Black Sea and to ports on the
Baltic Sea, from the eastern border of Ukraine and to the western border of Poland.
These corridor systems should be of different vectors and should link the most
important transport and cargo hubs of our countries. It does not cancel the old road system,
but creates an alternative one.
Each such transport corridor will have to meet the following basic conditions:
- the most direct transport highway (automobile, as well as railway),
- such a highway should not intersect other transport highways (neither automobile
nor railway).,
- it will be intended only for freight transport,
- this highway will be completely isolated from external transport systems, except
for its entry points (that is, it will be completely closed from the outside world),
- the entry points to the corridor will be located in certain places along the entire
path of the corridor (the entrance of transport to the corridor will be under the
control of the interstate control group),
- the corridor will be under constant external surveillance (satellites or cameras on
the road),
- for each cargo there will be only one control point (at the entrance to the corridor)
and only one planned exit point,
- transport must move non–stop at a minimum speed of 120-140 km/h (the only
stops are for changing drivers),
- in the perspective of 10-15 years, only electric vehicles should move in the
corridor, and in the perspective of 30-50 years – only transport without drivers.
The essence of the corridor is very simple:
– cargo transport that has entered this corridor is gaining high speed and moving to
its destination without stopping, under the supervision of government agencies,
- cargo control and accrual of customs or other payments is carried out only once at
the point of entry, and payment of customs payments - at the destination,
- in the directions that such corridors will occupy, smuggling will eventually
disappear as a type of business.
The minimum goal that can be achieved, using the example of the Odessa-Gdansk
direction.
Now the delivery by car of cargo weighing 20 tons from Odessa to Gdansk takes at least
3 days (taking into account all customs and borders), costs at least 2000 US dollars and
heavily pollutes the atmosphere.
Such a corridor would ensure the delivery of the same cargo in less than 1 day, at a
price of up to 500 US dollars and with minimal atmospheric pollution.
The same principle applies to the delivery of goods by rail.
In addition, the safety of transportation will significantly increase, as cargo and
passenger transportation will be separated.
Subsequently, after testing in Poland and Ukraine, it is possible to begin the expansion
of this system further across Europe.
In the future, it can be applied to sea and air transport – the principles will be the same,
but the control system will be different (the role of corridors will be performed by ships
moving under the satellite control of the corporation).
2.2. The second principle is the effective structure and activity of an interstate
corporation.
This should be an interstate joint-stock transport and transit corporation, in which the
distribution of shares will be as follows - 51% will be held by the participating states, and
49% by private investors-shareholders.
At the initial stage, this corporation will not be engaged in cargo transportation, but will
only create a network of transit corridors, which carriers will be able to use for a fee and on
the terms of the corporation.
Subsequently, the corporation will be able to create its own carriers, but only on
condition that this does not worsen competition among private carriers.
2.3. The third principle is correct government decisions.
2.3.1. First of all, it is necessary to prepare and sign an open agreement on the
establishment of an interstate joint-stock transport and transit corporation, concluded between
Poland and Ukraine, with the right of other countries to join it.
This agreement will not be about the unification of state transport systems, but about the
creation of a new alternative transport and transit system, within which the participating
States and private investors invest funds (money, land, transport terminals, technologies, and
so on) in the creation of a transport system and share income among themselves.
2.3.2. The partner States establish uniform rules for the organization of transportation
and control of carriers for all carriers that will use transit corridors.
2.3.3. The partner States establish a single preferential tariff system for all carriers and
uniform rules for customs and border control (that is, it is necessary to introduce amendments
to the Customs Code of Ukraine and the relevant regulatory documents of the partner
countries).
3. Conclusions.
Immediate prospects ():
- mutual business integration of partner states,
- a significant reduction in the cost and acceleration of cargo delivery, an increase
in transportation safety, as well as a reduction in atmospheric pollution on the
territory of partner states.
- the creation of many alternative transport corridors, the effectiveness of which
will not be affected by either the war or the economic crisis.
Future prospects:
- strengthening the independence and security of partner States,
- strengthening the positions of goods manufactured by partner states on the
international market,
- creation of a support system for carriers of partner states in conditions of
economic crises (preferential access to the corridor),
- environmental improvement,
- creation of an international transport system based on the corporation.
References.
1. The Customs Convention on the International Transport of Goods under Cover of
TIR Carnets (TIR Convention) (Geneva, November 14, 1975).
2. Vienna Convention on the Law of Treaties (Vienna, May 23, 1969).
3. International convention on the harmonization of frontier controls of goods (Geneva,
October 21, 1982).
4. Convention on the contract for the international carriage of goods by road (Geneva,
May 19, 1956).
5. Customs Code of Ukraine.
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