Principal Documents Enabling Operation of the Customs Union between Belarus, Kazakhstan and Russia

07.12.2009

Legal Update No. 93.

Goltsblat BLP advises that, on 27 November 2009, the Intergovernmental Council EurAsEC and the Customs Union Commission resolved to enact or approve some fundamental documents enabling practical functioning of the Customs Union between Belarus, Kazakhstan and Russia as part of the Treaty on the Establishment of the Common Customs Territory and Formation of the Customs Union and the Treaty on the Customs Union Commission (both dated 6 October 2007) and the underlying Treaty on the Establishment of the Eurasian Economic Union of 10 October 2000.

The following documents come into effect on 1 January 2010:

  • Treaty on Unified Customs and Tariff Regulation of 25 January 2008;
  • Treaty on the Terms and Mechanisms for Applying Tariff Rate Quotas of 12 December 2008;
  • Protocol on the Terms and Procedure for Applying Import Customs Duty Rates Differing from Rates Prescribed by the Unified Customs Tariff in Exceptional Cases of 12 December 2008;
  • Protocol on the Granting of Tariff Benefits of 12 December 2008;
  • Protocol on the Common System of Tariff Preferences in the Customs Union of 12 December 2008;
  • Treaty on Common Measures of Tariff Regulation with Regard to Third States of 25 January 2008;
  • Treaty on the Procedure for Imposing and Applying Measures Affecting Foreign Trade in Goods on the Common Customs Territory with Regard to Third States of 9 June 2009;
  • Treaty on Foreign Trade Licensing Rules of 9 June 2009;
  • Uniform Commodity Classification for Foreign Trade of the Customs Union (Commodity Classification);
  • Common Customs Tariffs of the Customs Union;
  • List of goods and rates with regard to which a member state of the Customs Union will apply import customs duty rates differing from the rates of the Common Customs Tariffs of the Customs Union during the transition period;
  • List of sensitive goods for which a unanimous decision of the Customs Union Commission is required for changing the import customs duty;
  • List of goods for which tariff quotas and volumes of tariff quotas for importation on to the territory of Belarus, Kazakhstan and Russia are introduced;
  • Common list of goods for which prohibitions or limitations apply on importation or exportation by the member states of the Customs Union within the Eurasian Economic Community in trade with third states and Regulation on Application of Limitations;
  • List of Emerging Economies Enjoying the Customs Union’s System of Tariff Preferences;
  • List of Least Developed Economies Enjoying the Customs Union’s System of Tariff Preferences;
  • List of Goods Originating and Imported from Emerging and Least Developed Economies that are Granted Tariff Preferences upon Importation.

In addition, the Treaty on the Customs Code of the Customs Union adopted on 27 November 2009 incorporates the basic Customs Code of the Customs Union. In order to prepare the Treaty for ratification, a dedicated work group is currently drafting a Protocol of Amendments to the Treaty, which is to be signed before 1 March 2010, making it possible for ratification to be completed before 1 June 2010 and the Treaty to come into effect on 1 July 2010. An action plan for enacting the Customs Code of the Customs Union has also been adopted, containing steps for development and adoption of numerous international treaties envisaged by the Code.

The above-listed documents provide the legal framework for the member states of the Customs Union - Belarus, Kazakhstan and Russia - and their relations with one another and other countries.

Once the Customs Union becomes operative, any goods released for free circulation on the territory of one of the member states will automatically receive the status of goods in free circulation on the territory of all other member states (i.e., throughout the territory of the Customs Union). In addition, unified customs tariffs and foreign trade regulatory measures will apply. The territories of member states will constitute a single customs territory with no internal customs boundaries between them.

At the same time, certain exceptions have been stipulated with regard to goods imported on to the territories of the Customs Union states and moved between them. For instance, importation of raw cane sugar for industrial processing is exempt from import customs duties in Kazakhstan from 2010 to 2019. The processed sugar may not, however, be imported into Belarus or Russia for free circulation on the territory of these states.

It has also been envisaged that customs clearance of goods for industrial assembly purposes will only be performed in the Union state that grants the relevant permission. Motor vehicles produced by way of industrial assembly are to be released from import customs duties subject to certain criteria. If the criteria are not met, the relevant import customs duty will be payable upon importation of the vehicles into other Customs Union states.

Importation of plant and equipment for an investment project will be exempt from customs duties. A relevant list of investment projects is to be developed by the Customs Union Commission. Tariff benefits might also be granted with regard to goods imported from third countries as contributions to the authorised capital of companies. This will be governed by procedures prescribed by the national legislation of the Union states.

It proved a difficult problem to establish customs duties for application to imported goods classed in accordance with the uniform Commodity Classification of the Customs Union. Some of the rates will differ from those currently effective in Russia. For instance, the customs duty for certain types of footwear will rise markedly. Tariffs for beef imported over and above the established quotas will go up from 30 to 50 per cent, while duties applicable to aircraft seating more than 50 passengers will go down from 20 to 15 per cent. Generally speaking, however, the changes in customs rates will be insignificant for Russia, since 92% of the customs duty rates with regard to the Commodity Classification of the Customs Union were based on the currently effective Russian rates.

We will soon be able to monitor the practical implementation of these fundamental agreements regulating operation of the Customs Union between Belarus, Kazakhstan and Russia.

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