Published: “News of the Russian export”, 2011, N 10
Author: O. Kurochkina
Member of Expert Council on customs regulation of Committee on budget and taxes of the state Duma
The Eurasian economic community (EurAsEC) is an international organization, established for effective promotion of the creation of the Customs Union and the Common economic space, as well as achieves other goals and objectives associated with the deepening of integration in economic and humanitarian fields. The transition from a Customs Union to form a Common economic space is the most important step in the formation of the common principles and mechanisms of legal regulation of economic activity and creation of a common market of goods and services. The three stages of the process of convergence of national economies and legal systems to form a Common economic space are optimal and most effective, which confirms the practice of the European communities, and now the European Union.
Each type of integration is peculiar to a specific set of procedures that countries must meet to move to a higher stage of integration. When creating a free trade zone in the participating countries are cancelling customs duties, taxes and charges, as well as quantitative restrictions in mutual trade in accordance with the international agreement. On the stage of the Customs Union is the formation of a common customs territory, the development and adoption of the common customs legislation, as well as the creation of supranational bodies. The formation of the Common economic space of the state shall ensure freedom of movement of goods, services, capital and labor across their borders.
The essence of the CES
In the Agreement on formation of the Common economic space, signed 19.09.2003, contains a definition which defines the concept and essence of the Common economic space. Under the Common economic space, the parties understand the economic space, which unites customs territories of the parties at which the performing mechanisms of regulation of the economies, based on uniform principles, ensuring free movement of goods, services, labor and capital, and is the single foreign trade and agreed to the extent and in the extent to which this is necessary to ensure fair competition and maintaining macroeconomic stability, tax, monetary and financional policy.
From the definition above, there are some main positions, determining the essential characteristics of the Common economic space.
1. Economic space, which unites customs territories of the States.
2. Economic space, where there are common principles for ensuring the free movement o goods, services, capital and labor.
3. Economic space, which has a common foreign trade policy.
4. Economic space, on which agreed tax, monetary and financional policy in order to ensure fair competition and maintaining macroeconomic stability.
Using of the concept of “policy coherence” demonstrates the complexity and lack of currently make the transition to a unified fiscal, monetary-credit and monetary-finance policy that clearly gives us the right to speak about the existence of certain stages of deeper integration at the stage of formation of the Common economic space.
CES is formed gradually and in stages, based on the main principles and rules of the WTO, which means gradual increase of the level of integration through synchronization carried out by transformations in the economy, joint measures on the implementation of a coordinated economic policy, harmonization and unification of legislation in the sphere of economy, trade and other areas, taking into account the universally recognized norms and principles of international law, as well as the experience and legislation of the European Union.
Because of the multitude of differences in the levels of economic and social development, as well as the degree of uniformity acting member of the national legislation of the formation of the Common economic space is in accordance with the stated principles of multi-level and various-speed integration, which means the freedom to determine the state of the directions of integration development and integration measures, in which it will participate, as well as the scope of such participation (article 5 of the Agreement on formation of Common economic space from 19.09.2003).
In order to form a Common economic space defined the key areas of the economy, which should be based on common agreed principles and to provide equal conditions for private economic operators. Of course, to create uniform conditions for ensuring the functioning of the common market for goods, services and factors of production it is necessary to remove interstate barriers in mutual trade, ensure the functioning of unified standards and rules in the field of technical regulation (development of common principles and rules of application of technical regulations and standards); avoiding taxes and fees as a tool for protecting the domestic market and domestic producers; creation of conditions for mutual convertibility of national currencies and the transition to payments in national currencies; creating a common labor market with free movement of citizens of the countries-members.
The time period of the main stages of the transition from the creation of the Customs Union before the implementation of the main agreements that form the Common economic space, can be presented as follows.
1. From 1 January 2010, actually began its activity the Customs Union of Belarus, Kazakhstan and Russia. Entered into force on Unified customs tariff of the Customs Union, and also the agreements in the field of the unified non-tariff regulation.
2. 1 July 2010 was marked by the entry into force of the Customs Union code, and several key international agreements. Thus continued active stage of formation of the common customs legislation.
3. 1 July 2011, there was a transfer of customs control to the external border of the Customs Union that allows speaking about the formation of the common customs territory of the Customs Union.
4. From 1 January 2012, it is planned the transition to the Common economic space, the purpose of which is to fully and effectively ensuring freedom of movement of goods, services, capital and labor across borders of the countries-members.
Analyzing the time frame of the main stages of the approximation of national legal systems, one can make a conclusion about a fairly rapid development of integration processes within the EurAsEC, which, on the one hand, testifies to the great desire of states to develop in the framework of integration structures, and on the other – makes you wonder about the quality of the legal base prepared for this transition.
Stages of CES
The basis of transition to the Common economic space conditionally laid in the Unified list of international agreements, establishing the basic common principles and norms of regulation of integrating spheres of economic life. The list of agreements divided in two blocks, each of which contains a number of agreements, allowing to accomplish the primary standardization of certain areas of the economy of the states. Fixed terms of entry into force of the agreements are contained in the specified packages.
The agreement included in the first package, must be ratified and put into effect on 1 July 2011, the agreement included in the second packet to be effective from 1 January 2012, it should be noted that the Republic of Belarus on 28 December 2010 ratified the entire package of documents on CES.
Kazakhstan and Russia are completing the internal procedures required for ratification of the signed agreements within the established deadlines.
Thus, in the first package includes 12 Agreements, which regulate the relations, arising in the following areas.
1. The sphere of economic policy:
– Natural monopolies;
– Competitiveness, government purchases, subsidies;
– Freedom of movement of services and investment, communications, finance.
2. Freedom of movement of capital. The currency policy.
3. Freedom of movement of workers.
4. Technical regulation.
In the second package contains 5 Agreements, which are concluded in order to ensure integration in the following areas.
1. Protection of intellectual property rights.
It should be noted that the agreements concerning the sphere of economic policy may provide for the phased introduction of its individual provisions. In order to ensure the proper and effective implementation of the signed agreements developed an action Plan on implementation of the agreements that form the CES, which was approved by the interstate decision of the EurAsEC Council (the Supreme body of the Customs Union) from 15 March 2011 N 77. In turn, for the implementation of the action Plan prepared by the Calendar plan for the development of documents for the implementation of the agreements that form the CES, which was approved by the Commission of the Customs Union dated 7 April 2011.
The plan of measures on realization of the agreements, forming the CES includes 111 positions, of which 75 are to accomplish the governments of the parties and their authorized bodies. 36 positions on 8 Agreements are referred to the competence of the Customs Union Commission. The plan covers the period between 2011 and 2020, which indicates the gradual implementation and operation of the documents, regulating in more detail the provisions of the basic agreements. Calendar plan for the development of documents for the implementation of the agreements that form the CES provides for the development of 13 international treaties and 42 other documents (protocols, procedures, methods, criteria, schemes, plans of measures). The documents should be developed and adopted in the period from 2011 to 2015.
Based on these terms, we can confidently say that the state after 1 January 2012, will conduct further steps to deepen integration within the Common economic space up to 2020.
In addition, in the next few years in the development of the regulatory system for CES should be further developed almost 70 new agreements. As far as we know, in the future, all documents of the CES and the CU can be subjected to large-scale codification, allowing the search for accurate and unambiguous legal information.
Tendencies and risks
While analyzing the main area of foreign trade regulation in the transition of states of the Common economic space would like to note the positive tendency of unification of legislation in the sphere of technical regulation of foreign trade activity. To ensure the integration of transition to the CES 18 November 2010, the countries signed an Agreement on common principles and rules of technical regulation in the Republic of Belarus, Republic of Kazakhstan and the Russian Federation. This Agreement is a Single list of products for which establishes uniform requirements in the framework of the Customs Union. Currently this List includes 61 commodity positions. Uniform requirements to such products will be contained in the unified union regulations, which are currently under development, and some on the stage of public discussion. For products included in the Single list, but for which are not in force, allied regulations will apply the national provisions of law. Currently, this Agreement introduced by the President of the Russian Federation for ratification to the State Duma.
Therefore, for the final formation of the common mode of technical regulation should adopt and introduce common allied technical regulations, which will have a direct effect on the territory of Belarus, Kazakhstan and Russia.
To date, the stage of public discussion are the following technical regulations.
1. On safety of chemical products.
2. On safety of food products.
3. On safety of wheeled vehicles and other
It should be noted that the common forms of the certificate of conformity and Declaration of conformity to technical regulations of the Customs Union approved by the Customs Union Commission Decision of 2 March 2011 N 563.
The Commission of the Customs Union is the sole permanent governing body of the Customs Union. The composition of the Commission is approved by the Supreme body of the Customs Union. The Commission, within its powers takes decisions, that are binding for the parties. The voice between the parties in the Commission are as follows: Republic of Belarus – 21.5; Republic of Kazakhstan – 21.5; Russian Federation – 57. Decisions are taken by majority of 2/3 of votes. If one of the parties does not agree with the decision of the Commission, the question shall be submitted to the Customs Union Supreme body at the level of heads of state, which decides by consensus.
While analyzing the main provisions of the Treaty on the Commission of the Customs Union dated October 6, 2007, taking into account countries ‘ transition to a higher form of integration – the Common economic space, the following conclusions can be drawn. For the SES requires a new level of organization and construction of supranational regulation, this raises the question about the necessity of reforming the Commission of the Customs Union with the aim of turning it into a permanent supranational body. Despite a fairly large amount of specific powers of the CCC, it still remains intercountry authority (acts on the basis of mandates), not supranational.
To date, the stage of public discussion are the following technical regulations.
1. on safety of chemical products.
2. on safety of food products.
3. on safety of wheeled vehicles and other
It should be noted that the common forms of the certificate of conformity and declaration of conformity to technical regulations of the Customs Union approved by the Customs Union Commission Decision of 2 March 2011 N 563.
The Commission of the Customs Union is the sole permanent governing body of the Customs Union. The composition of the Commission is approved by the Supreme body of the Customs Union. The Commission, within its powers takes decisions, that are binding for the parties. The voices between the parties in the Commission are as follows: Republic of Belarus – 21.5; Republic of Kazakhstan – 21.5; Russian Federation – 57. Decisions are taken by majority of 2/3 of votes. If one of the parties does not agree with the decision of the Commission, the question shall be submitted to the Customs Union Supreme body at the level of heads of state, which decides by consensus.
While analyzing the main provisions of the Agreement on the Commission of the Customs Union dated October 6, 2007, taking into account countries transition to a higher form of integration – the Common economic space, the following conclusions can be drawn. For the CES requires a new level of organization and construction of supranational regulation, this raises the question about the necessity of reforming the Commission of the Customs Union with the aim of turning it into a permanent supranational body. Despite a fairly large amount of specific powers of the CCU, it still remains inter-state authority (acts on the basis of mandates), not supranational.
The basic approach to the solution of this problem, which is that CCU should acquire the fundamental, including regulatory, management functions of integration processes. Currently decision making through inter-state agreements signed at the level of Vice-premiers, Ministers or presidents, make the mechanism of regulation cumbersome and time-consuming. Therefore, for the efficiency and dynamics of integration directly requires simplification and acceleration of the decision-making procedures within the Customs Union and Common economic space.
The most rational, according to experts, is adapted application of the experience of the European Union – solution takes up a special Commission without the conclusion of agreements and using directives.
The current legal framework when it is compared with the actual socio-economic and political situation in each of the countries participating in the CES allows to make some assessment of the project in terms of the availability of opportunities for positive results and, of course, risks of negative consequences, or lack of any real effectiveness of the CES.
So, to the prospects of the CES include:
1. Formation of a single full supranational body, open to dialogue, dynamic and capable to solve the overwhelming majority of issues.
2. Formation of an efficient transport infrastructure.
3. Completely free movement of goods, capital, labor and services on the basis of common rules and norms.
4. Expansion of sales markets.
5. Creation of favourable investment climate.
6. Replacement mechanisms of antidumping, compensatory, special and protective measures on common rules in the field of competition and subsidies.
7. International legal guarantees.
8. Ensure sustainable and balanced development.
Unfortunately, due to the rapidity of events, connected with the launch of the CU and the CES, nowadays, not enough experience had been gained looking into new phases of economic integration on the post-Soviet space, in this regard are expected to be significant problems in the formation of the CES. The integration experience of the European Union is very significant from different positions, but it cannot become universal for the countries – participants of the CES. To log in to the CES you need to run several dozens of agreements, some of which, in particular in the field of macroeconomic regulation or in the sphere of unification (harmonization of high-level) financial policy, is revolutionary for the economic models of Kazakhstan and the Republic of Belarus. Especially difficult transition to the CES could affect the economy of the Republic of Belarus, where the public sector is over 75%. Also the possible risks should include: the presence of significant imbalances in economic and social development of states; activation of external exporters for using Belarus and Kazakhstan as access to the Russian market. The specifics of the EurAsEC Customs Union remains that the two states of the three are major suppliers of energy to the world market, and one state – importer of energy and a transit country for oil and gas to European markets. So far the only real possibility for the formation of integration projects under the direction of Russia is the use to attract partners of Russian resources, including financial and commodity, and also the Russian market <1>. It is missing in the foreseeable future the possibility of organization of collective entry into the WTO. There is a threat that the CES gradually reduced to a regional energy project to be implemented only the energy component.
<1> the Total amount of donations from Russia in 2010 was $ 6 billion, and in 2011 will reach $ 8 billion.
In conclusion it should be said that despite the serious risks and threats of adverse effects, the possibility of low efficiency, the main goals and objectives of the CES formation can be achieved, provided there is sufficient unity of purpose among its participants, with the right understanding of the laws of economics and the market and compliance with the fundamental principles and norms of international law.