History of the establishment of the EurAsEC Customs Union
On October 10, 2000, in Astana, the presidents of Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan signed the treaty to establish the Eurasian Economic Community, or EurAsEC, in an effort to effectively promote the launch of the Customs Union and the Common Economic Space. The treaty went into effect on May 30, 2001, after which date all activities in this regard have been carried out within EurAsEC.
At a meeting in Sochi on August 16, 2006, the presidents of the EurAsEC member states adopted Resolution No. 313 on launching the Customs Union of Belarus, Kazakhstan and Russia within EurAsEC.
All necessary steps were taken to develop a legal framework for the emerging union to enable its transition from the already operational initial integration stage of a free-trade area to the second stage, that of the established three-state Customs Union, comprising Belarus, Kazakhstan and Russia, with the option for other states to join it as and when they were ready to.
At the summit of the EurAsEC Interstate Council at the heads of government level on October 6, 2007, the participating countries adopted a series of documents setting up the union's institutional structure and stipulating mechanisms for the accession of other countries into the organisation. In addition, they adopted a strategy for establishing the Customs Union within EurAsEC from 2007 through 2010.
On January 25, 2008, the EurAsEC Interstate Council met in Moscow at the heads of government level to sign nine international agreements providing the legal foundation for the three-state Union.
At the Interstate Council's regular meeting at the heads of government level on October 10, 2008, in Bishkek, the participants agreed on a few significant steps toward the formation of the Customs Union. Due to the amendments made to procedures, the council also assumed the position of the union's supreme body.
During the meeting, the leaders of the member states thoroughly considered and then approved the plan of action for 2008 through 2010 and for successive years on the priority areas in developing the Eurasian Economic Community and the Customs Union.
The Interstate Council's regular meeting at the heads of government level on December 12, 2008, resulted in the signing of documents that were essential to launching the Customs Union Commission within EurAsEC. The meeting also saw the signing of 14 documents from the list of international agreements; they made up the legal framework of the Customs Union for the three EurAsEC countries.
These completed the formal agreement of a package of 37 documents which were approved at the summit on October 10, 2008, including those previously signed; the documents were expected to be eventually entered into by the community's remaining members.
The newly-created Customs Union Commission held its first meeting on February 4, 2009, with Russia's Sergei Glazyev appointed as its executive secretary.
In a move to expand the integration process in the community, Kyrgyzstan came up with the initiative to participate in the development of the union's legal framework. At the commission's fifth session on May 29, 2009, in Minsk, the sides agreed to set up a working group to facilitate Kyrgyzstan's participation in the Customs Union. The commission appointed the group's chairman, established its structure, and approved its plan of action at the fifth and sixth sessions in Moscow on June 25 and August 12, 2009, respectively.
A significant step toward the union's establishment was made at the heads of government summit of EurAsEC's Interstate Council, the union's supreme body, on June 9, 2009, in Moscow, where the countries finalised the agreement of a single customs tariff.
Based on a launch of the union scheduled for January 1, 2010, and the goal of completing all essential procedures by July 1, 2011, the sides approved stages and a timeframe for establishing a common customs territory of the Customs Union of Belarus, Kazakhstan and Russia, namely:
- The preliminary stage - to run until January 1, 2010;
- The first stage - to run until July 1, 2010;
- The second stage - to run until July 1, 2011.
At its seventh summit in Moscow on August 12, 2009, the commission approved the plan of action for the preliminary stage of the common customs territory and updated the measures of the plan for establishing the Customs Union within EurAsEC for 2009 through 2010, aiming to promptly implement the preliminary stage and prepare for the first stage.
Ahead of that, at the summit of EurAsEC's Interstate Council on June 9, 2009, in Moscow, a decision was made to notify the World Trade Organisation of the countries' intention to begin talks on their ascension to the WTO as a common customs territory. The Customs Union Commission was charged with the task of initiating this process.
Also, at its seventh session, the commission adopted the following decisions:
- To appoint the members of the joint negotiating delegation of Belarus, Kazakhstan and Russia on the union's entrance into the WTO;
- To formulate the delegation's proposals for a common negotiating position on the union's entrance into the WTO;
- To develop joint proposals by the delegation and the Secretariat of the Customs Union Commission on the legal framework and the procedure for talks with the WTO Secretariat and major trade partners.
In view of the plans to launch the union on January 1, 2010, the Customs Union Commission held its eighth meeting on September 25, 2009, in Almaty, Kazakhstan. Here, Russia, Belarus and Kazakhstan gave their general approval to a draft Customs Code, a draft treaty on the Customs Code and a draft plan of action for the enforcement of the Customs Code. The participating countries considered a draft common customs tariff, issues of the regulations on tariffs and the commission's procedural framework.
During the meeting, the commission also approved the plan to transfer the agreed procedures of customs controls on the Russian-Belarusian border to the external border of Belarus.
The sides also agreed that the joint negotiating group of Russia, Kazakhstan and Belarus would continue talks on the countries' WTO accession on equal terms and endeavor to complete the drafting of such terms simultaneously. From November 30 through December 10, 2009, the joint negotiating delegation participated in the seventh session of the WTO Ministerial Conference, holding bilateral talks with the member countries of the WTO that were interested.
At its ninth session on October 21, 2009, in Moscow, the Customs Union Commission approved the draft treaty on the Customs Union's Customs Code, the plan for implementing the Customs Code, the procedural framework and the concept for developing an integrated information system for the union's foreign and internal trade. The sides also considered documents of customs tariff and non-tariff regulations. During this meeting, the commission also approved the plan to transfer the agreed procedures of customs controls on the Russian-Kazakh border to the external border of Kazakhstan.
The key step toward creating a common customs territory was taken at the meeting of the Interstate Council at the level of the heads of state in Minsk, Belarus, on November 27, 2009. The presidents approved the decision to create the Customs Union and officially scheduled for it to launch on January 1, 2010.
At this meeting, the leaders of the three countries signed the treaty on the Customs Code of the Customs Union and agreed a plan of action for enforcing the Customs Code. They approved the common customs tariff of the Customs Union to go into effect on January 1, 2010, with the authority to define its details and structure granted to the Customs Union Commission as a supranational body. Also, they adopted the Foreign Economic Activity Commodity Nomenclature and other international documents necessary for common customs tariff regulation. The heads of state also agreed to launch the common customs territory of the Customs Union on July 1, 2010.
On the proposal of Kazakhstan, the customs controls on the Russian-Kazakh border will be transferred to the external border of Kazakhstan on July 1, 2010, one year ahead of the planned deadline of July 1, 2011. The members of the Customs Union also approved regulations on the Export Council, an advisory body that will consider the economic entities' appeals related to their activities in the Customs Union through a quasi-judicial procedure.
Regarding the matter of unified non-tariff regulations of relations with third countries, those at the meeting agreed a common list of goods to which import and export prohibitions and restrictions may be applied with regard to trade between EurAsEC and outside countries. They also considered appropriate regulations for the application of such limitations to the goods on the list.
Also, the Interstate Council adopted a concept for creating an integrated information system for trade between the Customs Union members and outside countries. The council appointed three members to work on a permanent basis for the Customs Union Commission - Belarusian Deputy Prime Minister Andrei Kobyakov, Kazakh Deputy Prime Minister Umirzak Shukeyev and Russian Deputy Prime Minister Igor Shuvalov. Igor Shuvalov was appointed as chairman of the commission.
The council approved the procedural framework for the commission, the expenditures for 2010, and introduced changes to the commission's structure by raising the number of personnel and employing a new distribution system of the positions allotted. The commission's website is now the official source of the Customs Union's treaties and materials. The functions of a depositary for international treaties on the formation of the Customs Union were transferred from the EurAsEC Integration Committee to the Customs Union Commission.
In addition, the participating countries progressed toward the next stage of integration following the establishment of the Customs Union, namely, creating the Common Economic Space. Acting on the initiative of Belarus, at an informal meeting on December 19, 2009, the three countries' presidents approved a strategy for creating the Common Economic Space between Belarus, Kazakhstan and Russia. The three countries' presidents also signed a joint agreement in connection with the Customs Union's launch on January 1, 2010.
Starting from that date, the Customs Union Commission was charged with a number of supranational functions and its decisions became binding upon each member state without exercising additional internal procedures.
During its 13th session, held on January 27, 2010, in Moscow, the commission agreed on approaches to developing the mechanism for levying and distributing the customs duties and other duties, taxes and charges having equivalent effect.
After introducing practical steps to launch the Customs Union on January 1, 2010, certain issues came up relating to the list of goods subject to prohibitions or restrictions when exported or imported by the union members to outside countries, which could be explained by the ‘transition period' difficulties. It was agreed that the elements of the Customs Union that were launched on January 1, 2010 had been operating efficiently overall.
At its 14th session on February 26, 2010, in Moscow, the Customs Union Commission members approved Resolution No. 176, which clarified their position on the draft agreement on the terms and provisions of levying and distributing the customs duties and other duties, taxes and charges having equivalent effect with regard to standard rates for distributing the import customs duties for each side. In addition, the participants of the session discussed adjusting the rates of import customs duties on the Customs Union's common customs tariff, particularly those on polycarbonates and certain kinds of paper and cardboard. A report was given on the steps taken as part of the plan to transfer the agreed state-controlled activities from the Russian-Belarusian border to the union's external border and on specific details related to applying the same procedure to the Russian-Kazakh border.
At a working meeting on March 25, 2010, in Moscow, the commission members agreed on the mechanism for levying and distributing the customs duties and other duties, taxes and charges having equivalent effect. According to the decision made, the import customs duties are to be distributed as follows:
Republic of Belarus: 4.7%
Republic of Kazakhstan: 7.33%
Russian Federation: 87.97%
The participants of the meeting also agreed on launching an expert group called Currency Regulation and Currency Control and drafting an international treaty to control the movement of currency and monetary instruments across the borders of the Customs Union member states.
At the commission's 15th session on April 16, 2010, its members approved the draft agenda for the meeting of EurAsEC's Interstate Council at the heads of government level on May 21, 2010, in St Petersburg. The agenda included a report by the executive secretary of the Customs Union, Sergei Glazyev. The report focused on how the Interstate Council was carrying out the tasks announced at the heads of state meeting of December 19, 2009, in Almaty, and addressed issues related to the strategy for establishing the Common Economic Space between Belarus, Kazakhstan and Russia. The report also provided information on how a number of international treaties that constitute the Customs Union's legal framework were being implemented.
At this meeting, participants also agreed to launch an expert group for developing and equipping border check points on the external border of the Customs Union member states, and appointed the members of an expert group that will apply non-economic sanctions and restrictions for mutual trade within the Customs Union. They also appointed the members of an expert group on currency regulation and control.
