Baker & McKenzie : the Customs Union of Russia, Belarus and Kazakhstan

Russia, Belarus, and Kazakhstan will adopt new unified customs tariff and non-tariff regulations from January 1, 2010, and the Customs Union (the “CU”) of the three countries of the Eurasian Economic Community (the “EurAsEC”) will become a reality. The CU Customs Code (the “Customs Code”) is expected to take effect from July 1, 2010 to regulate the resulting integral customs zone.


I. CU: General Information

The CU signifies:

  • an integral customs zone. Goods manufactured or released for free circulation on the territory of any of the participating countries (“CU Goods”) will circulate within CU territory (1) without payment of customs duties; (2) free of any economic limitations; and (3) with simplified customs formalities (requiring only documents confirming the status of the CU Goods);
  • unified regulations for the main customs-related aspects, such as (1) on the rights and obligations of participants in foreign economic operations, and the customs authorities; (2) customs procedures;
    (3) rules for classification, customs valuation, and countries of origin of goods; and (4) procedural rules (procedures and forms applicable to declaring and releasing goods, payment of customs duties, etc.);
  • unified customs tariff regulations (including, but not limited to, a common commodity classification nomenclature and a customs tariff); and
  • unified non-tariff regulation (including, but not limited to, unified rules applicable to licensing, export supervision, and quantitative restrictions).

The supreme authorities of the CU are the EurAsEC Inter-State Councils at the level of heads of state and government. These bodies are responsible for the execution of the international agreements forming the legal basis of the CU. The Inter-State Councils themselves determine the effective dates of such agreements (provided that the instruments are ratified by all CU member states).

The CU Commission is the community’s regulatory body. Most of the CU procedural rules (such as procedures and deadlines for the performance of certain actions, and those relating to document forms) should be set forth by the CU Commission. Its decisions are binding on the members states.

The legal basis of the CU is constituted by: (1) the customs agreements in effect in the EurAsEC aimed at integration; and (2) the agreements formulated expressly for the latter’s formation (in accordance with the list approved by an Inter-State Council). Membership of the CU means automatic accession to all the group’s valid agreements. Conversely, withdrawal from any of those agreements results in the renunciation of all such agreements and, hence, withdrawal from the CU.

Customs clearance as a general rule should be performed in the jurisdictions of the respective participants in foreign economic operations. Starting January 1, 2010, goods transiting to Russia and/or Kazakhstan from foreign suppliers through Belarus will be customs cleared at the CU’s external frontier in Belarus. It is also planned that, starting July 1, 2010, goods imported through Kazakhstan should be customs cleared on the Kazakhstan border.


II. Customs Code of the Customs Union

The CU CC will come into force on July 1, 2010 if all of the community’s member states sign and ratify all of the required documents. The CU CC is based on the provisions of the Kyoto Convention on the Simplification and Harmonization of Customs Procedures and, as such, differs structurally from the effective customs codes of the CU nations.

The CU CC establishes equal rights and obligations for all organizations registered within the CU and also for the citizens of the CU countries. Goods cleared through customs or manufactured in any of the CU members assume the status of goods originating from the CU countries.

The CU CC lends a special role to the CU Commission, which is to approve implementation documents (such as instructions for the completion of customs declarations). The CU Commission should maintain common registers (those of duly authorized agents/ customs brokers, customs carriers, duty-free shops, bonded warehouse and temporary storage warehouse owners, and preliminary classification decisions).


III. Tariff Regulations and Customs Value

The CU’s unified customs tariff will come into force on January 1, 2010 after being first tested shortly in trial mode.

With respect to Russia, the CU customs tariff will increase import customs duties for more than 1,500 types of goods (out of a total of over 11,500) and decrease them for just 400 positions. When it comes to Kazakhstan, it will signify an increase in respect of more than 5,000 types of goods (among them foodstuffs and equipment). As far as the Republic of Belarus is concerned, the import customs duties will be increased for some 470 positions of goods, and decrease for more than 2,000 of them.

Determination of the customs values of goods will be approved in a special agreement between the CU member states. It is expected that the amendments will be generally in line with the Russian Law “On the Customs Tariff”, the GATT/WTO rules, and the Belarusian Law “On the Customs Tariff”.


IV. Non-tariff Regulation

The principles of unified non-tariff regulation for the CU are set out in the Agreement on the Unified Measures of Non-Tariff Regulation for Third Countries, and in follow-up agreements and CU Commission decisions. The following economic proscriptions and constraints are introduced on CU territory:

quantitative restrictions, which may be imposed by means of quotas and restrictions regarding certain goods;

exclusive export and/or import rights with respect to certain goods, which may be granted by the provision of special privileges to certain foreign trade participants in the form of special licenses issued by a duly authorized agency of a CU member;

foreign trade licensing, which aims to: (1) impose quantitative restrictions; (2) implement authorization-based procedures; (3) grant exclusive import and/or export rights with regard to certain types of goods; and/or (4) discharge international obligations;

import and/or exports oversight as a temporary authorization-based procedure intended to monitor fluctuations in the imports and/or exports of certain categories of goods;

measures dictated by national interests, which may be adopted in order to protect human life and health, the environment, cultural values, and cultural heritage and, where necessary, to ensure national defense and security, as well as in other cases, and which apply to the imports and/or exports of gold and silver; and

special foreign trade proscriptions and constraints, including steps required for the CU member states’ participation in international sanctions ordered in accordance with the UN Charter, or to protect their external financial standings and to upkeep their balances of payments.

In exceptional cases, CU members may are allowed to unilaterally introduce any of the foregoing non-tariff regulation options, provided that the latter’s effective period does not exceed six months.

Please note that duly authorized agencies in CU members will issue import and export licenses and authorizations in accordance with the procedures set forth in their national legislation. Such licenses and authorizations issued by a duly authorized agency in any of the CU member states will be recognized in all of the others.

The CU legislation establishes a list of goods subject to import/export proscriptions and constraints. This list currently includes six categories of goods that are not allowed for import/export, and 27 categories of goods subject to limitations in their import/export across the CU customs boarder. These include, inter alia, precious metals, precious stones, some types of mineral raw material, pharmaceuticals, radio electronic equipment, high-frequency devices, alcoholic products, encryption/cryptographic facilities, and cultural values.

The list includes certain product categories that are not currently subject to restrictions in some of the CU members. As a result, the members of the CU will have to develop legal procedures for the issue of licenses and authorizations with respect to such new positions prohibited or restricted for import/export across CU customs border.

The CU is also to maintain coordinated policies on technical regulations, sanitary rules and phytosanitary measures. The unified requirements for goods subject to technical control will be set out in EurAsEC technical regulations providing for the rules and forms for the confirmation of compliance and declaration of conformity, identification rules, terminology, packaging, marking, and labeling requirements. Relevant regulations will also be introduced in national and recognized international standards, which are to eventually replace the corresponding local standards currently in effect among the CU members.

Please note that only the Republic of Belarus has so far ratified the Agreement on Coordinated Policies on Technical Regulation, Sanitary Rules and Physosanitary Measures, which, therefore, has not come yet into legal force.

Any further questions regarding the above can be addressed to Alexander Bychkov, Partner, at Baker & McKenzie Moscow (+7 495 787 2700).