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EASTWEEK
Weekly analytical newsletter on Russia, Ukraine, Belarus, the Caucasus and Central Asia (also available in Polish as Tydzień na Wschodzie)

Contents

No. 5(198) | 2010-02-03
Also available in PDF

Analyses

  • Moscow's policy breeds frustration in Kaliningrad

    The underlying cause of the protest came from Moscow's long-term policy of prioritising Kaliningrad's integration with Russia while attaching secondary importance to the region's development. The policy of centralisation (which has been adversely affecting the region), as well as the changes to the functioning of the Special Economic Zone (which have harmed the interests of the local elite) have caused particular discontent. 

  • Romanian project for European integration of Moldova

    Since the formation of a new pro-European government in Chisinau, which is favourably disposed towards Romania, Bucharest has made Moldova the priority of its foreign policy and adopted a more tangible agenda with regard to it.

Events

 

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Russian Federation: the problematic customs union of Russia, Kazakhstan and Belarus
EASTWEEK

2010-02-03

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A meeting of the Committee of the Customs Union of Russia, Kazakhstan and Belarus was held in Moscow on 27 January. The parties failed to agree on the division of import duty revenue. The first month of the new, common custom tariff's functioning has revealed many difficulties that integration with its two neighbours will entail for Russia.

On 1 January, Russia, Kazakhstan and Belarus introduced a common customs tariff (based on the Russian tariff); the three countries are also preparing to introduce a common Customs Code as of 1 July. During the meeting, the parties failed to adopt the preliminarily agreed model for the division of import duty revenue (according to which the Russian budget would take 86.5% of the duties collected by the customs services of the three states, the Kazakh budget 8.5%, and the Belarusian budget 5%) because of the objections raised by Belarus, which has demanded a higher share. Minsk has also called for the common customs regulations to be extended to export duties (including export duties on Russian oil), which Russia is firmly opposed to. These disputes signal difficulties in the prospective implementation of the Customs Code. It should be noted that the introduction of the common tariff has already posed some threats to the Russian Federation's market. On the one hand, imports of many commodities such as wine and cellphones to Russia have stopped because the services in charge had failed to issue licences to many importers on time; and on the other, it has turned out that traders prefer to have their goods cleared by the more liberal customs services of Belarus and Kazakhstan, thus generating losses for Russia. Customs revenue accounts for more than half of the Russian budget's total revenue.
Russia's political decision to instantaneously establish the customs union has engendered threats to the Russian Federation's budget. Moscow is determined to proceed with the integration; however, it is looking for instruments to control the customs union's revenue. <iwo>

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