Tamozeniy souyz

Custom Code became effective starting from July 6, 2010 within Belarus, Kazakhstan and Russia, which meant to be the start of cooperation among those three countries. But the road to this prominent date was long and tough.    

Custom Union history

The first contract, which might be called as the first prerequisite to create the CU was signed on September 24, 1993 and was named as Formation of Economic Union. In January 1995 Custom Union Agreement was signed, which was accepted by current Union countries-participants. The document consisted all considered and well thought-out items of economical integration, planned timeline for reorganizing custom services, etc. 

But those plans failed to be implemented. The internal policies of the countries have been going through cardinal changes, which were followed by change of legislations. During these breaks the issue of forming CU was forgotten for a while. 

Nevertheless, some items were implemented yet. By the mid 1995 custom control was canceled between Russia and Belarus borders. In March of 1996 Kirgizia entered the CU. But later in 1998 Kirgizia betrayed interests of its partners and entered WTO. 

Default of Russia, negative changes in custom structure involved crash of plans on CU formation. In April 2000 Russia reestablished custom control in the border with Belarus and in 2011 custom border with Kazakhstan was put in place.  

On 10 October 2000in Astana heads of Belarus, Russia, Kazakhstan, Tajikistan and Kyrgyzstan signed a document, which gave start to Eurasian Economical Community. The Contract states all stages of trade and economical cooperation within CU. 

In 2005 during the Summit in Kazan a decision on necessity of forming a new CU was adopted. And on 6 October 2007 in Dushanbe Russia, Belarus and Kazakhstan concluded a contract on formation of unified custom area and formation of CU.   

Given past mistakes, quite tough variant of structure and legislation was selected. 

Long-expected event occurred on 1 July 2011  -Custom Code got effective within Kazakhstan and Russia. And since 6 July it became effevtive within all CU area. 

On 1 July 2011 custom control in borders of Russia, Belarus and Kazakhstan was canceled. It was moved to external circuit of CU borders.  

On 19 October 2011 in Saint Petersburg during the EEC heads’ session a decision that Kyrgystan would also enter the CU and it would happen in 2012 was accepted.   

Plus and delta of Custom Union 

As it was mentioned earlier, the road to CU formation was not easy. And now all obstacles have been passed and the long expected target is achieved.  And there appears a question: what advantages it will provide a country? 

Viktor Yambaev, President of Entrepreneurs’ Association notes: We are now onlu predict what the CU would bring us more – whether it is plus or delta? 

Let us analyze the issue.  

The CU is effective relatively little time, but even now we can surely tell about its significant advantages. 

• Unified custom area, which does not disrupt state borders of participating countries, is formed.
• We can transport goods of own or foreign production for no duties provided the required documents would be available. 
• Mutual trades turnovers will increase due to cancel of custom barriers (broker and export declaration expenses).   
• Time to submit declarations is increased from 15 days up to 4 months, which provides advantage to small and medium business.   
• Normative deadline for goods release into free circulation is changed. It was significantly reduced.  
• Non tariff regulation is cancelled: requirements for licenses, permits, participants of cross border logistics quota compliance.  

What advantages does it provide to Kazakhstan?   

• Economical and political stability.  
• Significant expansion of borders of fuel and energy products, colored and black metals and grain farming sell markets.   
• Appeared a hope for developing branches that have degraded – wine production, fruits and vegetables production, etc. 
• More profitable conditions are created for cross-country capital mobility and workforce. 
• Competency develops and it impacts on overall economical dynamics. 

But together with that one cannot notice and clear minuses which appeared of the CU entrance. 

First of all, it is the significant increase of prices for many goods up to 10-20%. The custom rates of Russia and Belarus match, but Kazakhstan’s were much more less. Consequently, Russian rates will be applied for 80% of commodities, despite request of Kazakhstan to extend the process for 5-10 years. Kazakhstani people expect increase of prices for clothes, construction materials, machinebuilding, consumer electronics, electrical equipments, office goods, toys, cosmetics, household chemicals, medicine. 

Also unpleasant news exists for car enthusiasts. It is most likely that soon Kazakh market will not be available for cheap second hand cars. And they will be replaced by Russian Ladas.   

Besides, preemptive right of voting is on Russia. Russia has 57% of vote, Kazakhstan and Belarus have 21,5% in the CU Commission. If Kazakhstan or Belarus would like to make any changes, they might do it only upon endorsement by Russia. Consequently, it would be difficult for Kazakhstan to defend  its own economical interests.   

But yet it is earlier to make hurried conclusions. As they say, time will judge. And as for us, we are no way affected negatively of the CU, and the work of the Government should be assessed worthily.