Features of the integration of transition countries-members of the Customs Union to a Common economic space

Author: Oksana Leonidovna Kurochkina,
The lawyer, member of the Expert Council for
customs regulations of the Committee on budget and taxes of the state Duma of the Russian Federation 

The Eurasian economic community (EurAsEC) is an international economic organization, created for effective promotion of the Parties of the process of formation of the Customs Union and Single economic space, as well as realization of other goals and tasks, connected with the deepening of integration in the economic and humanitarian fields.

The transition from a Customs Union to the formation of the Common economic space is the most important step in formation of uniform mechanisms of legal regulation of economic activity and the formation of a common market of goods and services.
The three stages of the process of convergence of national economies and legal systems, to the formation of the single economic space are optimal and most effective, which confirms the practice of the European communities, and now – of 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 countries-participants of the cancels customs duties, taxes and charges, as well as quantitative restrictions in mutual trade, in accordance with an international Treaty.
– At the stage of the Customs Union is the formation of a single customs territory, the development and adoption of the common customs legislation, as well as the creation of supranational bodies.
– When forming the Single economic space States should ensure the freedom of movement of goods, services, capital and labour force through its borders.

In the Agreement on forming the Single economic space, signed 19.09.2003 year, contains a definition, which defines the concept and essence of the Single economic space.
The Single economic space of the Parties understand economic space uniting the customs territory of the Parties, on which the functioning mechanisms of the regulation of the economies, based on common principles, guaranteeing the free movement of goods, services, capital and labour and is a common foreign trade and harmonized, to the extent and in the extent to which this is necessary for the ensure equal competition and the maintenance of macroeconomic stability, fiscal, monetary and monetary policies.

So from the above definitions, you can highlight some of the key positions, determining the essential characteristics of a Single economic space.

1. Economic space, which unites customs territories of the States.
2. Economic space, on which there are common principles that ensure the free movement of goods, services, capital and labour force.
3. Economic space, on which there is a single trade policy
4. Economic space, on which there is an agreed tax, monetary and monetary policies in order to ensure equal competition and the maintenance of macroeconomic stability.

The use of the term «agreed policy demonstrates the complexity and is not ready at the moment to make the transition to unified tax, monetary and monetary-financial policy, which clearly gives us the right to speak about the presence of certain stages of the more deep the integration of already at the stage of formation of the Single economic space.
The CES is formed gradually and stage by stage taking into account the basic principles and rules of the WTO, which means a gradual raising of the level of integration, through synchronization carried out by the Parties to the changes in the economy, joint measures to a coherent economic policies, harmonization and unification of legislation in the sphere of economy, trade and other areas, with due consideration to generally acknowledged principles and norms of international law, as well as the experience and legislation of the European Union.

In view of the multiplicity of differences in the levels of economic and social development, as well as in degree of uniformity in force in the States of national legislation, formation of the Common economic space is in accordance with the stated principles of various-level and various-speed integration, which means the freedom of the state defines directions of development of integration and integration of activities in which it will participate, as well as the scope of such participation (art. 5 of the Agreement on the formation of a Single economic space from 19.09.2003).

For the purpose of formation of the Single economic space of the identified critical areas of the economy, which should be based on common agreed principles and to provide equal conditions for private economic operators. Of course, for the creation of uniform conditions for the operation of the the common market of goods, services and factors of production need to remove interstate barriers in mutual trade, while ensuring

1. the functioning of the unified norms and rules in the field of technical regulation (development of common principles and rules of application of technical regulations and standards);
2. preventing the use of taxes and levies as the instrument for the protection of the internal market and domestic producers;
3. creation of conditions for mutual convertibility of national currencies and the transition to settlements in national currencies;
4. creation of a common labour market with free the movement of the citizens of the States-participants of the CES.

The time period of the main stages in the transition from the creation of the Customs Union before introduction in action of key Agreements that form a Single economic space can be represented as follows.

1. From 1 January 2010, actually began its activity the Customs Union of Belarus, Kazakhstan and Russia. Entered into force on the Uniform customs tariff of the Customs Union, as well as the Agreement in the field of the unified non-tariff regulation.
2. July 1, 2010 was marked by the entry into force of a unified Customs code of the Customs Union and a number of key international agreements. The continued active stage of formation of a single customs legislation.
3. 1 July 2011 shall occur transfer of customs control to the external border of the Customs Union, which will allow us to speak about the formation of a single customs territory of the Customs Union.
4. And from 1 January 2012 it is planned to shift to the Single economic space, the purpose of which is the full and effective ensuring of the freedom of movement of goods, services, capital and labour across the borders of member States.

Analyzing the timing of completion of the basic stages of convergence of the national legal systems, it is possible to make a conclusion about a rapid development of integration processes in the framework of the EurAsEC, which, on the one hand, testifies to the great desire of States to develop in the framework of the integration structures, and on the other hand-it makes you think about the quality of normative-legal base, prepared for this transition.
The basis of transition of the States of a Single economic space conditionally laid down in the unified list of international agreements establishing the basic common principles and norms of regulation of integrable spheres of economic life.

The list of agreements is divided into two packages, each of which contains a number of Agreements, allowing to carry out primary unification of certain areas of the economy of the States. Also fixed dates of entry into force of the Agreements contained in these packages.

The agreement included in 1 package, should be ratified and brought into effect from July 1, 2011.

The agreement included in the second package will be introduced into effect since January 1, 2012.

It should be noted that the Republic of Belarus on December 28, 2010 ratified the entire package of documents on the SES. The Republic of Kazakhstan and the Russian Federation of completing the internal procedures, necessary for ratification of the agreements signed within the established deadlines.

So in 1 package consisted of 12 Agreements, regulating legal relations, which arise in areas such as:

1. The sphere of economic policy

• Macroeconomics.
• Natural monopoly.
• Competition. State purchases. The subsidies.
• The freedom of movement of services and investments. The connection. Finance.

2. The freedom of movement of capital. Foreign exchange policy of the
3. The freedom of movement of labour force
4. Technical regulation

The second package includes 5 Agreements, which are concluded in order to ensure integration in the following areas:

•1. Protection of intellectual property
•2. Transport
•3. Energ

It should be noted that the agreements relating to the sphere of economic policy may provide for the phased introduction in action of their individual provisions.

In order to ensure the proper and effective implementation of the signed Agreements, developed a Plan of measures on realization of the Agreements, forming the CES, which was approved by the decision of the EurAsEC interstate Council (the Supreme body of the Customs Union), dated March 15, 2011 №77.

In turn, for the implementation of the Plan of measures is prepared by the Calendar plan for the development of documents in order to implement the Agreements that form the SES, which was approved by the decision of the Commission of the Customs Union of 7 April 2011. 

The plan of measures on realization of the Agreements, forming the SES includes 111 positions, of which 75 positions should perform the Governments of the Parties and their competent authorities. 36 positions on 8 Agreements referred to the competence of the Commission of the Customs Union. The plan covers the time interval from 2011 to 2020, which testifies to the gradual implementation and introduction of the documents, regulating in more detail the provisions of the basic Agreements.

Calendar plan for the development of documents in order to implement the Agreements that form the SES, provides for the development of 13 international treaties and 42 other documents (protocols, procedures, methods, criteria, schemes, plans of action). The specified documents should be developed and adopted in the period from 2011 to 2015.
Based on the terms, one can say with confidence that the States after January 1, 2012 will hold further steps to deepen integration within the Single economic space up to the year 2020.

In addition, in the next few years in the development of the entire legal framework of the SES should be further developed almost 70 new agreements.

As far as we know, in the long term all the documents of the CES and the TC may be subject to large-scale codification, which will allow the search for accurate and unambiguous legal information.

Analyzing the main area of foreign trade regulation in anticipation of the transition of the States of a Single economic space, I would like to note the positive tendencies of unification of the legislation in the sphere of technical regulation of foreign trade activities.

To ensure the integration of transition to the SES 18 November 2010 States signed an Agreement on common principles and rules of technical regulation in the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation.

The Agreement introduced a Single list of products, for which establishes uniform requirements in the framework of the Customs Union.

Currently this list consists of 61 commodity position.

Uniform requirements to such products will be contained in the unified Union regulations, which at the moment are at the development stage, and some are at the stage of public discussion.

For products included in the single list, but in respect of which have not entered into force Union rules, will apply national rules of law.

At the moment this Agreement by the President of the Russian Federation for ratification to the State Duma of the Russian Federation.

Therefore, for the final formation of a unique regime of technical regulation, it is necessary to adopt and implement the unified Union technical regulations, which will have a direct action on the territory of Belarus, Kazakhstan and Russia.

To the present moment on the stage of the public discussion is the following technical regulations:

•1. On safety of chemical products
•2. About safety of food production
•3. On safety of wheeled vehicles and etc.

It should be noted that the unified form of the certificate of conformity and Declaration of conformity with technical regulations of the Customs Union approved by the Decision of the Commission of the Customs Union dated March 2, 2011. N 563.

The Commission of the customs Union is a single, permanently functioning governing body of the Customs Union.

The composition of the Commission shall be 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 shall be distributed as follows:

– Republic Of Belarus – 21,5;
– Republic Of Kazakhstan – 21,5;
– The Russian Federation – 57.

Decisions are taken by a majority of 2/3 of votes.

If one of the Parties does not agree with the decision of the Commission, the issue is submitted for consideration of the Supreme body of the customs Union at the level of heads of state, which shall decide by consensus.

Analyzing the main provisions of the Treaty on the Commission of the customs Union on October 6, 2007, in view of transition countries to a higher form of integration – the Common economic space, you can make the following conclusions.

For the functioning of the SES requires a new level of organization and construction of supranational regulation, in connection with this arises the question about the need for reform of the Commission of the customs Union with the purpose of its transformation into a full-fledged permanent supranational body.

Despite quite a big amount of specific powers of the CCC, it still remains cross-country authority (act on the basis of mandates), and not a supranational. The main is the approach to the solution of this problem, which lies in the fact that the CCC must become fundamental, including regulatory functions for the management of integration processes.

At the present time, the adoption of decisions through inter-state agreements, negotiated at the level of Vice-premiers, Ministers or presidents, make the regulatory mechanism of the cumbersome and time-consuming. Therefore, for the efficiency and dynamics of integration directly requires simplification and acceleration of procedures of decision-making in the framework of the customs Union and single economic space.

The most rational, in the opinion of experts, is adapted to the use of experience of the European Union – a solution there take the appropriate Commission without the conclusion of agreements and by using the Directive.

The current legal framework when it is compared to the actual socio -economic and political situation in each of the countries participating in the EEA allows you to make some assessment of the project, from the point of view of the opportunities for positive results and, of course, of the risks of occurrence of negative consequences or lack of any real effectiveness of the CES.

So, to the future of the CES include:

1. The formation of a single full-fledged supranational body, open to dialogue, dynamic and capable of addressing the vast majority of issues.
2. To form an effective transport infrastructure.
3. Completely free movement of goods, capital, labour and services on the basis of common rules and standards.
4. Expansion of commodity markets.
5. Formation of favorable investment climate.
6. Replacement of mechanisms of anti-dumping, compensatory, special and protective measures on common rules in the field of competition and subsidies.
7. International legal guarantees.
8. Sustainable and balanced development.

Unfortunately, in view of the transience of the events connected with the launch of the customs Union and the EEA, to date, has not accumulated sufficient experience in the study of the problems of new stages of economic integration on the post-Soviet space, in connection with the expected significant problems of 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 SES.

To enter the EEA need to run several tens of agreements, some of which, in particular, in the field of macroeconomic regulation or in the sphere of unification (harmonization at a high level) financial policy is revolutionary for the economic models of Kazakhstan and the Republic of Belarus.

Especially hard transition to the CES may affect the economy of the Republic of Bashkortostan, where the public sector represents more than 75%.

Also to the potential risks should be considered:

1. The presence of significant disproportions in economic and social development of States.
2. Activation of the foreign exporters to use Belarus and Kazakhstan as the access to the Russian market.
3. The specificity of the TC of the EurAsEC remains a fact that the two States of the three are major suppliers of energy resources to the world market, as one of the States importer of energy resources and transit of oil and gas to European markets.
So far the only real possibility for the formation of integration projects under Russian leadership is using to attract partners of Russian resources, including financial and raw materials, as well as the Russian market¹.

4. Is not in the foreseeable future opportunity for a collective entry into the WTO.
5. There is a threat that the SES will gradually be reduced to the regional energy project, i.e. will be implemented only the energy component.

In conclusion it should be said that despite the rather serious risks and threats to the occurrence or extremely negative consequences, or on the possibility of low efficiency, the main objectives and tasks of the SES can be achieved provided sufficient unity of purpose among its participants, the correct understanding of the laws of the economy and the market, as well as the observance of the basic principles and norms of international law.
¹total the amount of subsidies on the part of Russia in 2010 amounted to about 6 billion us dollars, and in 2011 will reach 8 billion us dollars.


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