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R
USSIA
B
RIEFING
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February 2014
On January 1, 2010, the Russia-Kazakhstan-Belarus Customs Union
came into effect and as of July 1, 2011, all customs borders between
these three states were removed.
As a result, customs clearance of goods originating in any of these
three states, along with goods that have been imported into one
of these three states from other countries and released for free
circulation, may be transferred between the three states without
undergoing customs clearance and customs control procedures.
In August 2012, Russia joined the WTO which created customs
tariff changes for the Customs Union. In the end, it is believed
that Russia’s entrance into the WTO will equalize trade among the
Customs Union and its trading partners. It is interesting to note
that Russia was granted a 3 – 7 year transition period to make a full
integration. But some of the most protected industries, such as the
automotive market, will not transition to the new rates until the
end of this period.
The key aspects in the legislation of the Customs Union include:
Customs Duties by Location
Russia
87.97 %
Belarus
7.33 %
Kazakhstan
4.70 %
1) A Common Economic Space – an economic union which is the
ultimate integration of the three countries to achieve common
economic development goals followed by the harmonization of
the three countries’ various policies, including their economic
policy and industrial support policies. The formal establishment
of the Economic Union will take some time and effort.
2) Customs duties are posted to a general account and then
distributed among the member states of the Customs Union
according to a national budget:
Regarding VAT related to trade between the member states, VAT is
refunded to the seller of goods in one country (the exporter) while
the purchaser in the other country (the importer) pays VAT to the
tax authorities of its country. VAT rates are 18 percent in Russia, 20
percent in Belarus and 12 percent in Kazakhstan. It is unlikely that
these rates will be unified in the foreseeable future.
Prospects for the future of the Customs Union
The pace of integration towards a unified economic zone has
been accelerated through the political leadership of the member
states with a long term goal of creating a free space similar to the
European Union.
After 16 years of accession negotiations, Russia finally joined theWTO
in August 2012 which will have a positive impact on the economy
in the long term. The membership of Kazakhstan in theWTO could
take place in 2014.
Other countries have expressed an interest in joining the union
including Kyrgyzstan and Tajikistan.
The CustomUnion’s unified economic zone is becoming increasingly
salient in global trade relations, particularly between Europe and
Asia. European Union standards have been evident in the emerging
technical regulations and rules of the Customs Union and the Single
Economic Space right from the start. Experts believe that this will
lead to the establishment of an EU-associated free trade area in a
portion of the CIS territory as early as 2015 – 2020.
General Introduction
into Customs Union
– By Paul Sprague
Russia’s Accession to
The WTO – One year later
– By Bettina Wisthaler
On August 22, 2012, when Russia became the 156th member state
of the WTO, it was the end of long lasting talks and the beginning
of high expectations. Now, one year later, we are drawing the first
conclusions.
Entering theWTO, Russia agreed to adhere to the obligations under
the signed protocol which foresees among other provisions, that
the import tariff rates should not exceed the rates provided for by
the WTO. The requirements regarding the regulation of the import