I think that this topic is actual, and I hope it will be interesting for all of you because in economic world questions of collaborations are very important.
The Eurasian Customs Union came into existence on 1 January 2010 as the Customs Union of Belarus, Kazakhstan and Russia. The union consisted of Belarus, Kazakhstan and Russia, and was enlarged to include Armenia and Kyrgyzstan from 1 January 2015.
The original treaty establishing the Customs Union was terminated by the agreement establishing the Eurasian Economic Union, signed in 2014.
The Customs Union was launched as a first step towards forming a broader European Union-type economic alliance of former Soviet states. The member states continued with economic integration and removed all customs borders between each other after July 2011. Then the member states put together a joint commission on fostering closer economic ties, planning to create a Eurasian Economic Union by 2015. On 1 January 2012, the three states formed a single economic space to promote further economic integration.
When exporting goods a zero rated VAT is guaranteed and the exemption of excise taxes if sufficient documentary evidence has been provided.
Imported goods into the territory of the Russia from the territory of Belarus or Kazakhstan are subject to VAT and excise duties that are levied by the Russian tax authorities.
Access of products to the single territory of the Customs Union is granted after products have proved to be compliant with the requirements of Customs Union Technical Regulations which are applicable to the product.
The aim of the Customs union consists in carrying out the coordinated trade policy and free movement of goods across the uniform customs territory. Introduction by Russia of unilateral embargo on deliveries of the food from the USA, the EU, Australia, Norway and Canada together with absence of such decisions in Belarus and Kazakhstan – is an example of opposite policy which is incompatible with the uniform customs territory.
If the goods cross the Belarus border, lack of customs control between Russia and Belarus provides a free access of goods to the Russian territory.
As for the compliance with the obligations taken by Belarus and Kazakhstan in frames of the Customs Union, the countries-members should prevent the EU supplies to Russia, which our country banned earlier. But we all understand that in frames of the single market it is difficult to completely rule out possible «unscrupulous» actions of some Western companies, that can decide to earn on smuggling banned products to Russia. At the same time the leaders of Belarus and Kazakhstan assure us that they will stop such actions.
But Belarus doesn’t like restrictions on transit through the Russian territory of EU products, and closing the Russian market for the tens of Belarusian companies.
The Eurasian Union’s partners and, first of all, Belarus have two ways of earning money after anti-sanctions introduced by Russia.
The first way is that the European producers have to sell agricultural raw materials and cheap finished goods on the available markets. Then cheap finished goods replace Belarus products, and Belarus producers start buying raw materials at lower prices from EU countries. It gives them additional competitive benefits and the opportunity to increase export to Russia. Such scheme is completely legal.
The second way is re-export of European goods under the guise of Belarus. Such scheme works especially well for those goods which analogs are made in Belarus: to give out the European vegetables and meat for Belarus in large volumes is easier than seafood or fruit.
On the one hand, these two opportunities soften consequences of food embargo, negative for Russian consumers.
On the other hand, availability of the forbidden goods at Russian market directly contradicts the government resolution for imposing economic sanctions.
But the head of the Russian Foreign Ministry believes that sanctions against Russia «open new prospects for increasing trade turnover within the Customs Union."
To sum up, on the example of a situation with the Eurasian Customs union I can see the contradictions that often arise between economic requirements of the market, the governments and the political situation inside and outside the same governments. Dramatically changing situation in the world outside the Eurasian Customs Union strongly influences the agreements concluded earlier, in this regard the governments of the Union have to be flexible in this difficult situation and to be consistent with their own interests.