Customs Union between Belarus, Kazakhstan and Russia in Force

On July 1, 2010, the customs Union between Belarus, Kazakhstan and Russia entered into legal force. However some things need to be sorted out still. RIA Novosti:

MOSCOW, July 1 – RIA Novosti. The Customs Code of the Customs Union comes into force on 1 July, but still it is not clear whether this unionis  three-or two-sided. Russia and Kazakhstan have ratified the Code. With a third-party, Belarus, it is not so clear: on Wednesday evening sources in the Parliament of Belarus informed that the document has been ratified, but the official confirmation has not yet followed.

Two or three?

Formally, the customs union of the three countries began on January 1 this year, but de facto, to talk about full-fledged union and a single customs territory of the three countries is possible only after the entry into force of the General Customs Code. Russia and Kazakhstan signed the document on May 28 already, while Belarus did not even send their representatives to the procedure. Russia and Belarus have not yet been able to resolve differences over duties on petroleum products and rates on imported cars by natural persons.

On Wednesday, the eve of commencement of the Customs Code of the Deputy Ministry of Economic Development of the Russian Federation Minister Andrei Slepnev reported that the if the Belarusian parliament does ratify the document by Wednesday – in this case, the customs union will be three-sided from July 1 on.

The first Vice-Premier of Belarus Vladimir Semashko said hours after Slepnev’s statement that his country will decide on participation in the Customs Union on July 5, when the leaders from all three countries will gather in Astana . According to the Belarusian side, the solution will depend on the position of Russia on duties on petroleum products.

Intrigues added two sources in the Belarusian parliament, which late Wednesday told RIA Novosti that Belarus has ratified all the same code .  According to sources, the ratification was held in closed session of parliament. Officially,  both houses of the Belarusian parliament  did not confirm nor deny this information on Wednesday night.

Borders shut

Earlier it was planned that the border between Russia and Belarus will be abolished from 1 July, and from Kazakhstan – a year later, from 1 July 2011. However, delays in ratification of the Code and the remaining exemptions from free trade (cars for natural persons) have led to the fact that the customs posts on the Russian-Belarusian border, will remain there indefinitely.

Meanwhile, the head of Russian Federal Customs Service Andrei Belyaninov said Wednesday that Russian customs authorities are prepared to begin work on the Customs Code of the application of new rules from July 1.

Moreover, the Russian Customs promised on Thursday to open a “hotline” by which all disputes will be resolved and conflict issues that arise at the borders.

You can bring more, but not vodka

The Customs Code will change the rules for importing goods from outside the Customs Union countries. Since July 1, natural persons can import duty free from abroad, 50 kg of goods valued at not more than 1,5 thousand euros (approx. 58,531). Previously, the maximum allowed to import 35 kg of goods worth no more than 65 thousand rubles.

When importing goods weighing over 50 kilograms citizens will have to pay tax of 30% but not less than 4 euros per kilo.

The amount of alcohol permitted to be imported, will be reduced by half – to 5 liters from the previous 10 litres. With this there will be no fee to bring 3 liters of alcohol instead of 2.

That’s good news. But how does it look like a few days later? So far there seems to be no significant problems, and the cooperation among border and customs agents seems to work ok. However, two days into the union, there is not much experience to be gained and time will tell how everything really works out between the three.