Eurasian Economic Commission Republic of Belarus, Republic of Kazakhstan, Russian Federation

United Nations Economic Commission for EuropeCommittee on Trade

Fifth Session, Geneva, 18-19 June 2012

• Establishment of the Commission of the Customs Union / Devolution of some powers of national authorities to the CCU

•Establishment of the Eurasian Economic Community (EurAsEC) responsible for efficient promoting of the CU and the CES forming•International organization: legal capacity

•Launching the Customs Union within EurAsEC: common tariff and non-tariff regulation

• Abolishment of customs clearance procedure of the goods in member-countries’ mutual trade• Launching the mechanism of enrolment and allocation of import customs duties•Entering into force of the Customs Code of the CU

• Final transfer of customs control to the external borders of the CU - forming the common customs territory of member-countries

•Launching of the Common Economic Space: entering into force of the CES agreements

•Establishment of the Eurasian Economic Commission - (legal successor of the Commission of the Customs Union)

The Eurasian

Economic Union

History of the Eurasian Integration

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•Treaty on the CU and the CES

•Agreement on CU (RB and RF) •Agreement on the CU (RB, RK,RF)

1995 1999 2000 2007 Jan.2010 July 2010 July 2011 Jan.2012 Feb.2012 2015

Eurasian Economic Union

Common Economic Space

Customs Union

CES Agreement CES Agreement 2…

CES Agreement 16 CES Agreement17

Unified macroeconomic, tax, monetary, trade and customs policies

Common economic regulation procedures Common infrastructure Coordinated tax, monetary and customs policies Free movement of goods, services, capital and labor force

…

Common customs territory

Common customs codeCommon trade regime with third countries Common customs tariff and non-tariff regulation measuresAbolition of customs clearance of goods in mutual trade and transition of customs control to external boards

Key Phases of Eurasian Integration

3

Stages Main features

Treaties Agreements

CIS Free Trade Area Non-application of customs duties and economic restrictions in mutual trade (except for trade remedies) - with exemptions

Legal acts forming the legal base of the Customs Union in the framework of

Eurasian Economic Community (EurAsEC)

Eurasian Economic Commission

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The Commission is a single permanent regulatory body of the Customs Union (hereinafter the CU) and the Common Economic Space (hereinafter the CES).

The main goal of the Commission is “to provide for the operation and the evolution of the CU and the CES, and to carry out further economic integration initiatives within the framework of the CU and CES”

The CU Member States

• CU Member States: Republic of Belarus,• Republic of Kazakhstan , • Russian Federation • Surface: 20 206 350 km²• Population: 173,302 mln.• Total GDP: 2 bln. $ US (4 % of world GDP)• Total volume of external trade: 913 bln. $ US

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Agreements Establishing the Common Economic Space

On Unified Principles and Rules of Technical Regulations of the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation On Cooperation in Counteracting Illegal Labor Migration from Third Countries On Legal Status of Migrant Workers and Members of Their Families On Coordinated Macroeconomic Policy On Coordinated Principles of Currency Policy On Creation of Conditions at Financial Markets Necessary to Ensure Free Movement of Capital On Unified Principles and Rules of Competition On State (Municipal) Procurement

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Agreements Establishing the Common Economic Space

On Unified Principles of Regulation in Protecting Intellectual Property Rights On Unified Rules of State Support for Agriculture On Unified Rules on Granting Industrial Subsidies On Trade in Services and Investment in the CES Member States On Unified Principles and Rules of Regulation of Natural Monopolies On Access to Rail Transport Including Fundamental Principles of Tariff Policy On Access to Natural Monopolies in the Power Industry Including Pricing and Tariff Policy On Administration, Operation and Development of the Common Oil and Oil Products Markets On Rules of Access to Services of Natural Monopolies in Gas Transportation by the Gas-transport Systems including Fundamental Principles of Tariff Policy

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The CU and the CESshare in the global export in 2010

8

Growth Rate of Customs Union Economies in 2009-2011

9

2009 2010 20110

500000

1000000

1500000

2000000

2500000

13895501690938

2097965

8168101064225

1327136

Key Macroeconomic Indicators of the Customs Union

GDPVolume of Produc-tion

mln

. $

Bodies of the CU and the CES

Supreme Eurasian Economic Council:- level of Heads of States

- level of Heads of Government

Eurasian Economic Commission (the Commission)

Council of the Commission:3 Members of the Council

Board of the Commission:Chairperson + 8 Members of the Board

EurAsEC Court

Supreme Body of the CU

and the CES

The Common permanent

regulatory body of the CU and

the CES

Dispute settlemnt

body

- defines the strategy and the objectives of further development of the CU and the CES

- ensures functioning and development of the CU and the CES, carries out the initiatives on further economic integration

Structural units of the Commission

Missions of the Commission in member countries, in third countries and at the international organizations

(established by the decision of the Supreme Eurasian Economic Commission)- ensure the interaction with national authorities

Departments of the Commissio

Consulting bodies of the

Commission

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Eurasian Economic Commission

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Council of the Commission three members of the Council

(one Deputy Prime Minister representing each Member State)

Republic of Belarus – Sergei Rumas

Republic of Kazakhstan – Kairat Kelimbetov

Russian Federation – Igor Shuvalov

Areas of Competence of the Eurasian Economic Commissionunder the Treaty on the EEC

tariff and non-tariff regulation customs administration technical regulation sanitary, veterinary and phytosanitary measures enrolment and allocation of import customs duties establishment of trade regime with third countries statistics of external and internal trade macroeconomic policy competition policy industrial and agriculture subsidies energetic policy natural monopolies state and municipal purchases internal trade in services and investment transport and transportation currency policy protection of intellectual property and copyright migration policy financial markets (banking, insurance, foreign exchange market, stock market) other areas

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The EEC performs its activity within the powers

provided by the Treaty on the EEC,

by international agreements forming the legal base of the CU and

the CES and by decisions of the

Supreme Eurasian Economic Council

Board of the Commission

Eurasian Economic Commission

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Chairman of the Board

Viktor Khristenko

Nurlan Aldabergenov

Member of the Board-Minister in charge of

competition

Timur Suleimenov

Member of the Board-Minister in charge of

economics and financial policy

Sergey Sidorsky

Member of the Board-Minister in charge of

industry and agriculture

Andrey Slepnev

Member of Board-Minister in charge of

trade

Valery Koreshkov

Member of the Board-Minister in charge of technical regulation

Vladimir Goshin

Member of Board-Minister in charge of customs cooperation

Danial Akhmetov

Member of the Board-Minister in

charge of energy and infrastructure

Tatiana Valovaya

Member of the Board-Minister in charge of

development of integration and

macroeconomics

Decision making process within the CU and the CES

Departments of the Commission

Consulting bodies of the Commission

Council of the Commission

Board of the Commission

Supreme Eurasian Economic Council

1. The departments analyze the initiatives within their competency

3. The issue is submitted to the Board

4. The issue is submitted to the Council of the Commission

2. Member States analyze the issue and give their comments

5. The issue is submitted to the Supreme Eurasian Economic Council

Decisions taken by the CU

bodies become the integral part of the legal base

of the CU and the CES

The Board takes decision on issues within its competency

The Council takes decision on issues within its competency

The Supreme Council takes decision on the issue

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National authorities

Ensuring effective functioning of common market (free movement of goods, services, capital and labor force) Coordinated industrial, transport, energetic and agriculture policies, development of industrial cooperation including potential creation of joint international corporations Further convergence of national legislations and their unification in spheres covered by the agreements establishing the CES Elaboration and realization of coordinated macroeconomic policy, transition to convergence of main macroeconomic indicators of member countries, development of cooperation in monetary field Intensification of cooperation in the field of economic security Cooperation in the field of migration policy Ensuring the compliance of education standards Comprehensive cooperation in the field of culture, parliamentary and business interaction Further development of regional and border cooperation, creating effective structures of regional cooperationEnhancement and development of supranational bodiesCooperation in the field of foreign policy on questions of mutual interest

Main directions of the integration process(Declaration on Eurasian economic integration by the Presidents of the CU member countries,

December 2011)

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Regulatory Legal Framework of the Eurasian Economic Union

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Legal Base of the EurAsEC

Legal Base of the Customs Union

Legal Base of the Common Economic

Space

CODIFICATIONof treaties and

agreements achieved(no later than 2015)

TREATYon

the Eurasian Economic

Union

Single Codified Document

Harmonization of existing legal norms

Compliance with the WTO Agreement

Elimination of inconsistencies and contradictions of legal norms

Filling gaps and repealing obsolete norms

Systematization of existing legal norms

Prin

cipl

es o

f cod

ifica

tion

The CU and the WTO membership

The Russian Federation becomes a member of the WTO since July of 2012

Declaration on the Eurasian economic integration by the three Presidents (December 2011):

«In their practical cooperation member countries of the CES are guided by norms and rules of the WTO and confirm the importance of the accession of all three states to the Organization»

July 2012 2012 – 2013 …

Treaty on the Functioning of the CU in the Framework of Multilateral Trade System of 19 May of 2011 enters into force

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The Treaty on the Functioning of the CU in the Framework of the Multilateral Trading System

1.1. Since the date of accession of any CU Party to the WTO, the provisions of the WTO Agreement, as set-out in its Protocol of Accession, including the commitments undertaken by that CU Party as part of the terms of its accession to the WTO, which related to matters that the Parties had authorised CU Bodies to regulate in the framework of the CU, as well as to the legal relationships regulated by the international treaties constituting the legal framework of the CU, became an integral part of the legal framework of the CU.

1.3. Upon the subsequent accession of another Party to the WTO, the commitments undertaken by that Party as part of the terms of its accession to the WTO, which relate to matters that the Parties have authorized Customs Union Bodies to regulate in the framework of the Customs Union, as well as the legal relationships, regulated by the international treaties, constituting the legal framework of the Customs Union, shall also become a part of the legal framework of the Customs Union. The Party acceding to the WTO shall notify other Parties and coordinate with them actions in respect of undertaking the commitments as a term of its accession, which require amendment to the legal framework of the Customs Union.

Article 1.

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2.1. CU Parties shall adopt measures to adjust the CU legal framework and decisions of CU Bodies to comply with the WTO Agreement as set-out in the Protocol of Accession of each Party. Until those measures were adopted... the WTO Agreement would always prevail over respective provisions of treaties concluded within the framework of the CU and of decisions adopted by its Bodies.

1.4. In case of divergence between the consolidated results of import tariff negotiations, achieved in the course of the accession to the WTO, the Parties concerned shall consult each other immediately and enter into negotiations with interested WTO Members expeditiously with a view to harmonize import tariffs rates. The Parties shall coordinate their positions and express the intention to follow the respective provisions of the WTO Agreement, that are applied in case of tariff harmonization by the customs unions. The rates of the Common Customs Tariff of the Customs Union shall not exceed the import tariff rates agreed as a result of harmonization unless otherwise is provided for in the WTO Agreement.

The Treaty on the Functioning of the CU in the Framework of the Multilateral Trading System

Article 2.

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For information:

The official site of the CU and the CES: www.tsouz.ru

Commission headquarters: 3/5 building 1, Smolensky boulevard , Moscow, 119121, Russian Federation

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