Formation of the Customs Union of Belarus, Kazakhstan and Russia

1. Formation of the Customs Union of Belarus, Kazakhstan and Russia Director of the General Department for Analysis and Regulation of Foreign Economic Activity of the Ministry of Economic Development of the Russian Federation A.E.Likhachev

2. Formation of the legal basis of the Customs Union 2 • 4 Agreements (at the level of the Heads of States): • terms for creation and the CU status • CU institutional structure • accession mechanism for members of the Eurasian Economic Community October 2007 • 9 Agreements (at the level of the Heads of Governments): • establishment of the common regulation of trade with third countries • unification of customs administration • transfer of powers in regulating foreign trade activity to the CU Commission January 2008 • 13 Agreements (at the level of the Heads of Governments): • issues of customs and tariff regulation • customs administration • Secretariat of the Commission of the Customs Union December 2008 • Continued formation of the CU legal basis (~25 agreements) • Customs Code • non-tariff regulation • technical regulation • taxation issues 2009

3. Stages in formation of the Customs Union of Russia, Belarus and Kazakhstan 3 Introduction of Common Customs and Tariff and Non-Tariff Regulation 1 January 2010 Introduction into force of the Common Customs Legislation of the Customs Union (Customs Code of the Customs Union; agreements of the Customs Union Member States, decisions of the Customs Union Commission) Introduction of the mechanism for receipt and distribution of import customs duties 1 July 2010 Abolishment of customs clearing of goods originating from third countries and released for free circulation in the territory of Russia, Belarus and Kazakhstan within the customs territory of the Customs Union Customs Code of the Customs Union has entered into force for three countries as of 6 July 2010 while in Russia-Kazakhstan relations the Code is applied as of 1 July 2010 Bilateral regulatory basis

4. Norms and provisions of the Single Customs Code 4 Common rules for goods declaration Common customs procedures Common rules for calculation and charging of customs duties Common rules for customs clearing and customs control Customs Code of the Customs Union Document of direct application Norms of the Code • Basic norms • Relations between entities involved in the movement of goods across the customs border • Rights and obligations of participants in foreign economic activity • Lists of documents for customs operations • Deadlines of customs operations Novations • Notion of the Single customs territory • Common transit conditions • Abolition of customs clearing of goods in the territory of the CU Member States • Mutual recognition of measures for ensuring payment of customs duties and taxes in the whole territory of the CU • Introduction of the institution of authorised economic operators who enjoy special simplifications

5. Major agreements aimed at implementing the Customs Code (entrance into force simultaneously with the Code) Итоги реализации таможенно-тарифной политики в 2008 году 5 Agreement on issues related to free (special) economic areas in the customs territory of the Customs Union and the customs procedure of the free customs area Agreement on free warehouses and the free warehouse customs procedure Agreement on the procedure of movement by natural persons of goods for personal needs across the customs border of the Customs Union and customs operations related to their release Agreement on major principles of criminal and administrative liability for violations of customs legislation of the Customs Union and its Member States Agreement on the procedure of movement by natural persons of cash money and (or) money instruments across the customs border of the Customs Union

6. Structure of the Customs Legislation in the Russian Federation 6 Implementation in the Russian Federation Customs Code of the Customs Union • Implementation of reference rules to the national legislation in the Customs Code of the Customs Union • Legal relations that are not regulated by the Customs Code of the Customs Union International agreements Federal Law «On customs regulation in the Russian Federation» Decisions of the Commission of the Customs Union Decisions of the Government of the Russian Federation Regulatory Acts of the FCS in coordination with authorised federal executive bodies FCS Institutional acts (technical issues)

7. Provisions of the customs legislation aimed at improving foreign economic activity Итоги реализации таможенно-тарифной политики в 2008 году 7 Customs Code of the Customs Union Federal Law «On customs regulation in the RussianFederation» • exhaustive list of cases for the extension of deadlines of goods release • simplified procedures in exports • direct regulation of application of special simplifications by the Law norms • simplified procedure for international exchange of scientific and commercial samples • no guarantee payment for customs duty payments when importing technological equipment • exhaustive regulation by the Law of the procedure of institutional appeal • transitional provisions allowing “to smooth” as much as possible the introduction of new rules • common conditions for customs transit • mutual recognition of measures for ensuring payment of customs duties • introduction of the institution of the authorised economic operator • reduction of the list of documents for exports (from 14 down to 7) • reduction of deadlines for release of goods for exports from 2 days to 4 hours • differentiated size of guarantee payment for production and non-production authorised economic operators • Possibility to apply the customs procedure of temporary import for scientific and commercial samples

8. Possible risks in conducting foreign economic activity in the conditions of the Customs Union 8 Lack of detailed clarifications on the application of the new customs legislations on the spot Change of rights and obligations of persons involved in the customs sphere • Bringing information to the knowledge of officials of local authorities • «Hot lines» of federal executive bodies • Information placed on internet sites of power bodies and on-line consultations • Dissemination of information and documents to participants of foreign economic activity Tuning of information and administrative interaction between customs services of Belarus, Kazakhstan and Russia

9. Temporary exemptions from the regime of the single customs territory Итоги реализации таможенно-тарифной политики в 2008 году 9 Exemptions from CIS free trade regimes Exemptions from the single customs tariff, preferential investment regimes Cars for natural persons Exports in goods charged with export duties Goods under safeguard measures Plans of transferring controlling functions to the CU external border «Commodity» risks RF – RB 1 July 2010 RF – RK 1 July 2011 Control in mutual trade Trade statistics Extension of the practice of joint sector balances Possibility of execution of control at internal border in exceptional cases («conservation» of infrastructure) Interaction between controlling bodies Single requirements to controlling procedures Single Information System Infrastructure improvement of border-crossing points

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