Press Conferences

12 july, 2011 18:38

Prime Ministers Vladimir Putin, Mikhail Myasnikovich of Belarus and Karim Massimov of Kazakhstan speak at a news conference after their meeting in Moscow

Prime Ministers Vladimir Putin, Mikhail Myasnikovich of Belarus and Karim Massimov of Kazakhstan speak at a news conference after their meeting in Moscow
“We are with you today, and we feel for you,” Putin said, addressing the victims of the tragedy on the Volga River. He said that he has signed a resolution offering payment to the families of the dead and injured.


Vladimir Putin: Ladies and gentlemen, good afternoon. I would like to stress once again that today we met with the representatives of the business communities of Belarus, Russia, and Kazakhstan to sum up the extensive and large-scale work of creating the Customs Union.

As you know, as of July 1 of this year, customs control on the borders between our states was eliminated. That is truly an event of great interstate and geopolitical significance. From this moment on, our entrepreneurs will be able to act freely without any customs control between our states and, consequently, without paying any customs duties, which relieves the burden on business and makes it more competitive both within and outside of our territories.

Today, we reviewed the results of this massive endeavour and discussed what needs to be done in the immediate future so that the Common Economic Space can be fully implemented beginning on January 1 of next year, marking a deeper level of integration between our states that envisages the free movement of capital, goods, and labour. The terms have practically been agreed upon and are passing through internal state procedures in our respective countries. We have no differences in opinion on these issues today, and only the technical work remains to be completed.

As you know, we have also decided to confer supranational functions on the Customs Union Commission, and we have agreed on the functions of that supranational body. We believe that this structure should be a permanent and professional body. To this end, a special unit will be formed within its structure to act as a standing body. The Customs Union Commission will start its work in this capacity as of January 1 of next year.

We in Moscow are selecting a location suitable to the important functions this body will fulfil. The same is being done in Minsk – my colleague will tell you about it later on. A building has already been chosen to house the EurAsEC Court, the supreme arbitrator for disputes between economic entities in the Customs Union, and it will start work on January 1 of next year. Russia has selected and is submitting its candidates for appointments as judges and our partners from Kazakhstan and Belarus are doing the same. The work is very intensive.  We very much hope that next year we will be able to sign a declaration on the formation of the Eurasian Union that can and must begin its work in 2013. Thank you.

Mikhail Myasnikovich: I would like to add that today’s news conference, which is being held by the business community and the government, is also a milestone event in our integration process because we have tried to lend an ear to our entrepreneurs. I think that we, too, have been heard and that our further plans have been understood.

Even this first meeting, in which we passed on from paperwork to concrete actions such as lifting internal divisions and borders, is a point from which there is no turning back. We should be thinking about our next steps.

It is remarkable that the business community has already proposed concrete projects in various sectors, conceived ways to better organise production facilities, and considered how to support each other without making excuses… We in Belarus… As Mr Putin said very clearly, our products should be competitive not only in the Eurasian market, but in world markets and in non-member states. To this end, we must create new companies and enlarge existing ones to make that synergy real. I think all the plans we have made will be successfully fulfilled before January 1. Once the entire organisational infrastructure, including the EurAsEC Court, starts working, there will be less need to bring in administrative resources while market mechanisms do the job. Thank you.

Karim Massimov: I would simply like to confirm what my colleagues have said. The creation of the Customs Union and the Common Economic Space has proceeded at such a rapid pace that business could not always catch up or understand the decisions that were made. On January 1, 2012, which is only months away, we will live in a totally new legal space, as has been pointed out today. We as governments must prepare mentally as well because some of the functions that we previously performed independently will now be delegated to a supranational body, and business must understand the new opportunities that are being offered: a common policy on competition and the free movement of goods, capital, and labour. These are completely new conditions, I’d call them unprecedented. We have to prepare well and explain what this is all about. I think that today’s meeting is the first of many steps that will help us, primarily business people, to understand the new opportunities that have opened up before us. Thank you.

Question: Mr Putin, I’d like to ask you a question on the theme of today’s meeting. Many experts and journalists are concerned about competition. It is no secret that Belarus heavily subsidises its agriculture, while Kazakhstan has a relatively low tax rate for businesses. What do you think about the future of Russian companies in this context? This is the first point. I’d like to expand my question a little here, and ask you and your colleagues to address it. How do you think competition will be affected when the Common Economic Space is launched on January 1? What mechanisms will be employed, and have you already reached an agreement concerning them? Thank you.

Vladimir Putin: There are two options. The first is to adopt coordinated decisions on some issues, such as subsidies, for instance. There is also the question of export customs duties on certain goods. We have reached a compromise on this issue. Suppose Kazakhstan continues exporting some of its products on special terms, but we have agreed that we will take measures to protect our domestic market temporarily, until Kazakhstan fully accepts external customs regulations. So, the first option is to come to an agreement on subsidies and customs duties.

Secondly, some issues are being addressed at the national level, such as taxation levels and deductions to social funds. But the relevant governments, ours in this case, will have to take prompt action to make its businesses competitive. This should encourage government agencies and all other bureaucratic structures to make timely, appropriate decisions in line with our arrangements. And, as we’ve just discussed privately, I think that this is a very good and important incentive for making our economies more competitive in general.

Karim Massimov: As our policies are in-line with each other, I fully agree with Mr Putin. You’ve mentioned taxation in Kazakhstan. Taxation is not a part of the CES. Every national government makes its own decisions concerning taxation, and the better opportunities that it offers by regulating taxes help the government of another country to make the best decision. This is one way to obtain a common style of business.

Vladimir Putin: Otherwise, some companies may reregister in another country, whether in Belarus or Kazakhstan. We understand this perfectly well, and will adjust our policy accordingly.

Mikhail Myasnikovich: We agree that private companies must compete under equal conditions. In establishing our trilateral association we must take into account general international experience, especially considering that Russia and Kazakhstan are actively preparing to join the WTO.

Question: Mr Putin, may I ask you one question on a different topic? Today we are mourning those who died in a recent accident. Will their families receive any compensation from the government?

Vladimir Putin: Indeed, this is an awful tragedy, a terrible misfortune. Dozens of people have lost their lives, many children among them. I’d like to express once again on behalf of the Russian government our most sincere condolences to all the victims and the families of those that have been lost. Earlier today I signed a government resolution on compensation. The families of the dead will receive one million roubles, those who sustained severe to moderate injuries will receive 400,000 roubles and those with minor injuries, 200,000 roubles. The Republic of Tatarstan will also adopt and announce relevant decisions today. The sums will be more modest, but the republic will not abandon people to their misfortune. As we already know, most of the victims come from Tatarstan. And I’d like to repeat once again to people who have been affected by this misfortune in all regions, primarily in Kazan and the rest of Tatarstan – we are with you today, and we feel for you. Thank you.

Question: Mr Putin, the final question. We were initially a union state, as I see it, in order to overcome our problems together. Now we have the Customs Union. What's next?

Vladimir Putin: I’ve spoken about this. Our next step is the CES, with the free movement of goods, labour and capital within the Customs Union. We have agreed on the union’s common external customs borders, of the withdrawal of borders between us and a number of other things. There are more than 90 rules and procedures that we will adopt for the Customs Union.

This is our next step, but we must develop our integration further – to the Eurasian Union. We have every reason to believe that we will take this step next year.