Customs Regulation in the Republic of Belarus
1. General Information about the Customs Union
The Customs Union is the international organization based on the “Eurasian economic community” established by three member-states: the Republic of Belarus, the Russian Federation, the Republic of Kazakhstan for the purpose of trade and economic integration aimed to create a common customs territory and unified trade regulations with third countries.
The Customs Union is based on the Treaty on the Creation of Common Customs Territory and Formation of the Customs union dated October 6, 2006.
Basic principles of the Customs Union:
1. free transition within the territory of the Customs Union of:
- the goods originated from the territory of the member-states of the Customs Union;
- the goods released for domestic consumption within any member-state of the Customs Union.
2. The regulation of customs legal relations on the level of supranational legislation.
3. The priority of the union legislation before the national legislation.
4. The elaboration of uniform rules and procedures of the goods’ customs processing, imported into the territory of the Customs Union, and measures of tariff and non-tariff regulation.
Superior body of the Customs Union is the Interstate Council of Eurasian economic community (hereinafter — the «Interstate Council»), based on two levels — the level of Head of State and the level of Head of Government.
The uniform standing regulated body of the Customs Union is the Eurasian Economic Commission (hereinafter — ECC), created in accordance with the Agreement «On Eurasian Economic Commission» (hereinafter — ECC) оf November 18, 2011.
Judicial functions of the Customs union are carried out by the Court of the “Eurasian Economic Community”. In connection with forming of Customs Union the Eurasian Economic Community Court has the authority to consider cases about accordance between Customs Union legal acts and International agreements that form the Customs Union agreements base, about challenging a decisions and actions (inactions) of Customs Union authorities. The Eurasian EC Court has the authority to judge cases between ECC and Customs Union member states, cases for petitions of Customs Union member-states and Eurasian Economic Community states, cases for petitions of Custom Union agencies and Eurasian Economic Community agencies, cases for petitions of entities and other cases according to the agreement of Customs Union and Eurasian Economic Community. Since January 1, 2012 Eurasian EC Court has thwarted start working with headquarters in Minsk.
The normative base of the Customs Union consists of:
- the international agreements signed by the member-states of the Customs Union.
- the resolutions of the Interstate Council and the ECC adopted pursuant relevant agreements.
The issues which are not regulated by international agreements of the Customs Union, resolutions of the Interstate Council and the ECC, fall within the scope of legislation of the Republic of Belarus.
2. Tariff Regulation in the Customs Union
Tariff regulation upon import of the goods is carried out in accordance with the Agreement on uniform customs tariff regulation dated January 25, 2008 that provides formation of Uniform Customs Tariff (hereinafter — the «UCT») to be applied by member-states of the Customs Union.
UCT is a list of rates of customs duties to be used with respect to the goods imported from third countries, systemized in accordance with the Uniform Goods Nomenclature of Foreign-economic activity of the Customs Union.
Import customs duties
The rates of import duties from UCT to be applied by each member-state depending on the state of origin of imported goods and conditions of importation thereof unless otherwise is set out in the uniform customs tariff.
The sums of import customs duties paid out are apportioned pursuant to the normative established by the Treaty on determination and application of procedure regarding enrollment and apportioning of import customs duties (other customs duties, taxes and levies, having equivalent application) as of 20 May, 2010:
- Belarus — 4.70 %;
- Kazakhstan — 7.33 %;
- Russian Federation — 87.97 %.
Export custom duties
The Agreement on export customs duties in respect of third countries dated January 25, 2008 between member-states of the Customs Union regulates export custom duties.
In accordance with Clause 6 Article 84 of the Customs Code of the Customs Union procedure regarding payment of export customs duties shall be governed by a separate international treaty of the Customs Union member-states. As of today such international treaty has not yet been signed.
But in relations between the Russian Federation and the Republic of Belarus it is applied the Treaty on procedure of payment and enrolment of export duties (other customs duties, taxes and levies, having equivalent application) upon export from the territory of the Republic of Belarus out of the customs territory of the Customs Union of oil and certain types of the goods, produced from oil as of December 12, 2010 as amended by the Protocol of March 15, 2012. According to the said treaty the Republic of Belarus and the Russian Federation do not apply in mutual trade export duties in respect of oil and oil products. Export duties with respect to such goods upon their export from the territory of the Customs Union through the territory of the Republic of Belarus shall be payable at the rates, equal to those applicable in the Russian Federation as of the date of registration of a declaration for the exported goods by the Belarusian Customs bodies. The said bilateral treaty is effective until the trilateral agreement between the Republic of Belarus, the Russian Federation and the Republic of Kazakhstan has entered into force, but in any case no later than December 31, 2013.
However, Russian government approved a draft protocol to the Agreement of payment and enrolment of export duties upon export from the territory of the Republic of Belarus out of the customs territory of the Customs Union of oil and certain types of the goods, produced from oil that extends its . Draft Protocol provides for the extension of the agreement on tariffs for 2014. A draft the Protocol provides the extension of the agreement on tariffs for 2014.
3. Tariff Preferences Applied by the Member States of the Customs Union
The rates of customs duties under UCT are uniform and may not be changed depending on persons transferring the goods through customs border, types of transactions or other circumstances, except as provided in the Agreement on Uniform Customs and Tariff Regulation.
The member-states of Customs Union can apply tariff preferences only if this is prescribed by the international agreements of Customs Union or decisions of Head of State or ECC. Granting preferences in ex parte manner is not allowed.
Specific grounds for granting tariff preferences are set out in the Agreement on Uniform Customs and Tariff Regulation as well as in the decisions of Head of State and ECC.
Basic principles of tariff preferences:
1. to be applied regardless of the state of origin of the goods;
2. cannot be individual.
Exceptions are only provided in the International agreements on free trade zone in force entered into by Customs Union members before January 1, 2010 until unification or termination of relevant agreements.
Among International agreements on free trade zone entered by the Republic of Belarus before January 1, 2010 there is the Agreement between the Government of the Republic of Belarus and the Government of the Republic of Serbia on Free Trade between the Republic of Belarus and the Republic of Georgia dated March 31, 2009.
4. Uniform Measures of Non-Tariff Regulation in the Frameworks of the Customs Union
Non-tariff measures — are a set of measures to regulate foreign trade, carried out by the introduction of quantitative and other economic restrictions.
The following measures of non-tariff regulations are allowed within the customs territory of Customs Union:
- quantitative restrictions of export and/or import (quota);
- foreign-trade licensing;
- exclusive right to export and/or import;
- supervision for export and/or import.
- temporary export ban (in exceptional cases for the duration no longer than
- measures, concerning foreign trade and initiated on the basis of national interests.
4.1. Quantitative restrictions of export and/or import (quotas)
Within the territory of the Customs Union may be applies quantitative restrictions of export and import quotes.
The decision on quotas to be taken by the ECC. ECC apportions quotes among member-states of Customs Union and determines a method of apportion of quota shares among the subjects of foreign economic activity of Customs Union. If necessary, ECC apportions the volume of import quota among third countries.
The Goods with respect to which export quotas may be applied must be included in the list of essential Goods for the internal market of the Customs Union. Such a list is set out by the decision of the ECC # 168 “On ensuring the functioning of a unified system of tariff regulation of the Customs Union of Belarus, Kazakhstan and the Russian Federation”.
Export and import quotas are established for indefinite period of time.
Quantitive restrictions do not apply to:
- import of the goods, originated from third country or export of the goods, designated to the territory of any third countries;
- trade of the goods in the frameworks of international treaties on free trade zones.
4.2. Exclusive right to export and/or import
In accordance with the decision of ECC the list of the goods to be exported or imported on the basis of exclusive right as well as organisations that are given exclusive right to export (import) certain types of goods is subject to publication.
At the moment, in the Belarus the exclusive right to import alcoholics, fish processing products, raw tobacco and tobacco products.
The exclusive right of the state is provided for regarding export of potassium fertilizers.
4.3. Foreign-trade licensing
Licences are required in order to export and import the goods stated in the Uniform list of the goods subject to ban and restrictions upon trade with third countries. Issuing licenses are regulated in accordance with the Treaty on rules of licensing in foreign-trade of the goods of June 6, 2009.
Types of licenses:
- One-time licence
The term of validity is no longer than 1 year after commencement (can be limited by the expiry date of the document, which was the basis for the licenses).
- General licence
The term of validity is no longer than 1 year after commencement.
The term of validity is determined by the decision of ECC in each specific case.
Exclusive right of the state on the basis of licenses are granted with respect to import of alcoholics, fish, seafood and their products after processing, raw tobacco and tobacco products.
5. Indirect Taxation
Indirect taxation in the Customs Union is regulated under the Treaty on the Principles of Levying of Indirect Taxes upon Import and Export of the Goods, Supply of Works, Services in Customs Union dated January 25, 2008 (hereinafter — the Treaty on indirect taxation) as well as the Covenants on procedure of levying indirect taxes and mechanisms for their payment upon export and import of the goods in the Customs Union and upon performance of work, providing services in the Customs Union of December 11, 2009.
Bilateral agreements between the member-states of the Customs Union on indirect taxation apply only inasmuch as their provisions are compatible with the Treaty on indirect taxation).
5.1. Indirect taxation upon export of the goods
Upon export of the goods zero rate of VAT and/or exemption from payment of excises are applied on condition if there is evidence of export.
The term for verification of relevance of zero rate is 180 calendar days from the date of delivery (shipping) of the goods.
5.2. The principles of indirect taxation upon import of the goods
Upon import of the goods in the territory of a member-state of the Customs Union from the territory of another member-state of the Customs Union indirect taxes are levied by the tax authorities of importer. If in accordance with the laws of member-state’s jurisdiction no taxes are charged upon import of the goods than no taxes to be payable.
The rates of taxes are determined in accordance with the legislation of importing country.
5.3. Indirect taxation upon carrying out of works, providing services
The taxes are to be levied within the member-state of the Customs Union that is considered as place of carrying out of works, providing services.
Upon carrying out of works, providing services the tax base, tax rates, procedure of tax levying as well as exemption are stated according to the laws of the member-state of the Customs Union, the territory of which is considered as place of supply.
6. Supervision for Security and Quality of the Goods in the Frameworks of the Customs Union
Supervision for security and quality of the goods within the territory of the Customs Union means registration, testing, and confirmation of conformity (declaration, certification of the products), examination, registration of security of the products, veterinary control, quarantine control and phytosanitary control.
6.1. Certification (declaration of conformity)
In the frameworks of the Customs Union all member-states mutually recognise the results of certification (declaration of conformity). But in order for member-states to recognize certification (declaration) of the goods there are the requirements to be met:
- the same requirements of technical regulatory acts in respect to specific goods within three member-states of the Customs Union;
- testing of the products by certified laboratory in one of 3 member-states of the Customs Union;
- certification (declaration of conformity) — in certified body if one of 3 member-states of the Customs Union;
- single CU certificate.
There is no mandatory rule saying where to pass through testing or make certification. For example, Belarusian producer may pass through certification in the Russian Federation or Kazakhstan and then use the certificate within the Republic of Belarus.
Single Customs Union certificate (declaration of conformity) is valid within the whole customs territory of the Customs Union and is recognised without re-issuance or compliance with any additional procedures. Single CU certificate is issued not only with regard to the goods produced in the Customs Union but also with regard to the goods to be imported from third countries. However this is not applicable to imported goods subject to confirmation of conformity as declaration of conformity is not allowed, only certification.
Unfortunately today single CU certification does not cover all types of the goods. Currently the Customs Union is in process of unification of technical regulatory acts — Technical Rules aimed to establish the common uniform requirements for all member-states of the Customs Union.
As of January 15, 2012 the ECC has adopted 34 Customs Union Technical Rules:
- On the safety of meat and meat products;
- On the safety of milk and milk products;
- On the safety equipment of high pressure;
- On safety of railway rolling stock;
- On safety of high-speed railway transport;
- On safety of railway transport infrastructure;
- On safety of low voltage equipment;
- On safety of packages;
- On safety of fireworks;
- On safety of products, intended for children and adolescents;
- On safety of toys;
- On safety of perfumes and cosmetics;
- On safety of machines and equipment;
- Safety of lift;
- On safety of equipment for work in explosive environments;
- On requirements to automobile and aviation gasoline, diesel and marine fuel, jet fuel and heating oil;
- Safety of motor road;
- On safety of gas-fired mechanisms (instruments);
- On safety of corn;
- On safety of wheel (tire) transport ( carrier vehicle);
- Technical order on fat-and-oil production;
- On safety of food production;
- Food Production marking( Marking of food production);
- On safety of light industry production;
- On safety of body armor facilities;
- Technical order on juice production (from) of fruits and vegetables;
- Electromagnetic compatibility of technical facilities (tools);
- On the safety of agricultural and forestry tractors and trailers;
- On requirements for oils and special fluids;
- Safety food additives, flavorings , and processing aids;
- On the security of explosives based on them;
- On the safety of certain types of specialized food products , including dietary medical and dietary preventive nutrition;
- On the safety of small vessels;
- On the safety of furniture products.
6.2. Registration of security of the goods
Import and circulation of particular goods within the Customs Union are made only on the basis of the document confirming state registration of security in respect of the goods. That covers such products as foodstuff, child products, chemical, biologic raw materials and other products, directly connected with human body.
In accordance with the Agreement on sanitary measures in the Customs Union of December 11, 2009 all member-states mutually recognize the documents of state registration, сconfirming security of the goods if:
- the goods are stated in the Uniform List of the products subject to registration within the Customs Union;
- the documents certify compliance of the goods with the Uniform Requirements of the Customs Union;
- the document are issued in certified laboratory or certified body of any member-state of the Customs Union;
- CU single document is issued in respect to such goods.
6.3. Veterinary control
The decision of the ECC dated June 18, 2010 # 317 approves the Uniform List of controllable goods of animal origin as well as uniform requirements for all three member-states of the Customs Union.
Importation of controllable goods must be followed by relevant permit of body of the Customs Union (issued for one year term and volume stated in the permit) and veterinary certificate issued by a competent body of body the exporter.
Circulation of controllable goods within the Customs Union is made on the basis of single certificate, issued within the Customs Union.
6.4. Quarantine and phytosanitary control
With regard to vegetable products such as fruits, vegetables, flowers and other products, transport boxes, package, soil, organisms in the Customs Union there also the Uniform List of controllable products and single requirements to relevant goods. Imported goods shall comply with phytosanitary requirements of that member-state of the Customs Union where the point of destination of controllable products is located and be followed by phytosanitary cetificate.
7. Customs Measures Protecting the Intellectual Property Objects
In the frameworks of the Customs Union there is single customs register of IP objects of three member-states of the Customs Union (hereinafter — the «Single Register») aimed at common protection of IP objects within the Customs Union. The Single Register does not replace national registers, which are considered valid each in respect of relevant country.
As of today national registers of each member-state:
- Belarus: 171 objects (as of January 15, 2014);
- Russian Federation: above 1350 objects;
- Kazakhstan: above 850 objects.
In order to include IP objects in the Single Register it is necessary to submit the application followed with a list of required documents. One application is to be submitted in respect to one IP object. The Intellectual Property Objects are added in the Single Register free of charge.
The application may be submitted by proprietor, several proprietors (including if different proprietors in different countries have the title over the same IP — in case if there is their common consent), representative, having permanent representative office in the territory of the Customs Union under the power of attorney valid within the whole territory of the Customs Union (a proprietor can serve as the representative).
The Intellectual Property objects are added in the Single Register for the duration not longer than 2 years. This term can be extended unlimited number of times on base of titleholder’s (his attorney) application but each time not longer than for 2 years. The intellectual property object can be added in the Single Register United for no longer than the term of intellectual property object’s legal protection in Customs Union member state in which the term is expired earlier.
Consequences of listing IP object in the Single Register:
If during customs processing customs authorities discover a breach they are obliged to:
- suspend release into free circulation for up to 10 days (may be prolonged one more time for extra 10 days);
- notify within 1 day the declaring and proprietor of such suspension as well as of the reasons and terms thereof;
- then whether arrest (confiscate) or cancel the resolution on suspension.
If there is no breach found the proprietor will indemnify the damage to a declarant
Based on information as of January 15, 2014 there has not been any IP object registered so far.
8. Treaty on the Functioning of the Customs Union within the Framework of the Multilateral Trade System
Taking into consideration the fact that the Russian Federation officially became a member of the World Trade Organization (hereinafter - the WTO) on August 22, 2012, the Treaty on the Functioning of the Customs Union within the Framework of the Multilateral Trade System, signed on May 19, 2011 in Minsk, became especially relevant.
Under Section 1 of the Treaty, from the date of accession by any Party to the WTO, the provisions of WTO Agreements, as they defined in the Report of Accession of the Party to the WTO (including the commitments undertaken by the Party as a condition of its accession to the WTO and corresponding to legal relations, which are generally regulated by the bodies of the Customs Union, and also to legal relations, which are regulated by international agreements of the Customs Union) become part of the legal system of the Customs Union.
From the date of accession by the Party to the WTO rates of the Common Customs Tariff of the Customs Union will not exceed the rates of import tariff, provided by the List of concessions and commitments on market access of goods, which is annexed to the Report of Accession of the Party to the WTO. The number of provisions of the Treaty determines the procedure of regulating the rates of import duties in the Customs Union in case of discrepancy with the rates of the WTO, and also establishes the necessity of harmonizing the Union's regulatory framework with acts of WTO.