The Customs Union is what? The states of the Customs Union

The customs union is formed with the aim of creating a single territory, and customs taxes and economic restrictions operate within it. The exception is compensatory, protective and anti-dumping measures. The Customs Union implies the application of a single customs tariff and other measures designed to regulate trade in goods with third countries.

Definition

The Customs Union is the union of several participating states that conduct joint activities in the field of customs policy. Customs duties and borders between participants are also abolished, and for other states a single customs tariff is introduced.

History

The first such union arose in the nineteenth century, of which France and Monaco became parties.

At the beginning of the twentieth century, the Customs Union that concluded the Treaty was Switzerland and the Principality of Liechtenstein. Also, as an example, the conclusion of the General Agreement on Tariffs and Trade in the twentieth century, the European Economic Community was established in 1957, which eliminated all restrictions on trade between participants, and a common customs tariff for trade with third countries was created. In 1960, the European Free Trade Association was formed , which abolished taxes on customs and quantitative restrictions on trade of members of the association.

In the EEC and EFTA countries there are still differences in customs regulations and there are no single duties in trade, in the socialist countries there is no Customs Union, but agreements were concluded that presuppose cooperation and mutual assistance on customs issues.

Unified documents, methods and forms for the design of cargo, both exhibition and fair, were introduced. Agreements were signed to simplify their registration at the customs. These agreements accelerate the movement of goods, strengthen the world market and prevent all kinds of violations.

In 2010, a single Customs Union was created, which included Russia, Kazakhstan and the Republic of Belarus. This implies the creation of a single customs territory and provides all control functions.

In the current year, Kyrgyzstan joined the Customs Union, while Russia is strengthening its positions.

Adoption of the Customs Union

On October 6, 2007, the Treaty was concluded between the Russian Federation, the Republic of Belarus and Kazakhstan on the transition to a single Customs Union.

Since July 1, 2010, in accordance with the customs code, the unified customs territory of the three member countries has started functioning.

Eliminated the declaration and clearance at the customs at the borders of these three states. Goods can move without registration, which eliminates the emergence of costs. They move much easier and reduce the cost of delivering goods.

In the future, the Common Economic Space (EEA) will emerge on the territory of the Union with a functioning unified market of services, which, in addition to trade, includes services and many other areas of activity.

The year 2015 of the Customs Union was marked by a new event. The entry of the next member of the organization introduces some changes in geopolitics. A new structure of the organization Customs Union (Kyrgyzstan, Russia, Kazakhstan and others) will expand trade relations in the TC countries.

General information

The Customs Union is an association aimed at raising the economic level in the member states. The created market has more than 180 million people with a turnover of $ 900 billion.

The conclusion of the Customs Union allowed the goods to move freely throughout the territory with the effect of universal control.

If the fact of export is documented, excises are not required to be paid, and the VAT rate is zero.

In case of import of goods to Russia from Kazakhstan and Belarus, the Russian tax authorities levy excises and VAT. The customs union is an easy and profitable form of interaction.

Composition

Participants in the organization of the Customs Union (Customs Union):

- Russia and Kazakhstan (since 01.07.2010).

- Belarus (since 06/07/2010 year).

- Armenia (since 10/10/2014).

- Kyrgyzstan (since 08/05/2015).

Candidates for the entry:

- Tajikistan.

- Syria.

- Tunisia.

The accession to the Customs Union of candidate countries is being considered in the very near future. Expanding the organization can improve the global market. The entry of candidate countries into the Customs Union (Tajikistan, Syria, Tunisia) is a prospect for more developed countries by expanding their positions.

Governing bodies

The supreme governing body is the International Council of Heads of State and Government. Also, according to the agreement, the Commission of the Customs Union was established, which is a permanent regulatory body.

The highest bodies of the institution in 2009 carried out complex measures that allowed to consolidate the contractual and legal basis of the Customs Union.

By decision of the presidents of the member countries of the union, an economic commission was established as a permanent regulator of supranational administration, which is subordinate to the Higher Eurasian Economic Council.

Main advantages

The main advantages of the Customs Union for business entities in comparison with the free trade zone are:

• In the territories of the Customs Union, expenses for the creation, processing and movement of goods have significantly decreased.
• The costs of time and finances arising from administrative barriers have diminished noticeably.
• The number of customs procedures that are mandatory for passage when importing goods from third countries has declined.
• New markets for goods became available.
• Unification of the customs legislation has led to its simplification.

The Customs Union and the WTO

In the process of creating the Customs Union, many concerns were voiced about the contradiction of the rules of the Customs Union with the WTO rules.

In 2011, the organization summed up all its norms to full compliance with WTO norms. If the states of the Customs Union join the WTO, the WTO rules will be considered as priority.

In 2012, Russia joined the WTO, which led to the renewal of the Single Customs Tariff for the countries of the Customs Union in accordance with the requirements of the WTO. The level of 90 percent of import duties remained the same.

Internal conflicts

In November 2014, the import of meat from Belarus to Russia was banned. The volume was about 400 thousand tons. At the same time, the Russian side took measures to tighten control over goods that cross the Belarusian border, which contradicts the simplified rules for the carriage of goods operating in the territory of the Customs Union.

The observers noted a good combination of the mechanism of the Customs Union and the mechanism of re-export of banned European goods to Russia. For example, the import of fish from Belarus, which is landlocked, to Russia increased by 98 percent.

Belarusian President A.G. Lukashenka was outraged by the prohibitions of the Russian side and accused Russia of violating the rules of the Customs Union and disregard for the norms of international rights.

According to the observers' notes, there is an item in the rules, according to which, in the event of restrictions imposed by Russia on trade and transportation of goods, the Belarusian side has the right not to comply with the terms of the contract.

In 2015, Belarus returned border control to the Russian border, thereby violating the terms of the EAEC agreement. Also, it was announced that the ruble is likely to be abandoned both from the settlement currency and the return of settlements in US dollars. Russian experts believe that in such a situation regional integration is under attack.

Criticism

In 2010, the opposition forces attempted to organize a referendum for denouncing the agreements. Kazakhstan made a claim about infringement of sovereign rights.

Critical comments of the Customs Union on the following points were also made:

• Conditions for trade and certification of goods are poorly worked out.
• The terms of the WTO have been imposed by Russia on Kazakhstan and Belarus, which are not members of the above-mentioned organization.
• Incomes and receipts are allegedly unjustly distributed among the participating countries.
• The customs union is not beneficial as a project to current and potential participants.

Meanwhile, studies indicate that, for a number of ideological reasons, the Customs Union benefits its participants in varying degrees.

The view was also expressed that the Customs Union is a phantom, it is not viable as an artificial political entity.

Opinions in the society

In 2012, the Center for Integration Studies of the Eurasian Development Bank conducted a sociological survey. The survey involved the CIS countries and Georgia. The question was asked: "What do you think about the fact that the economies of Belarus, Kazakhstan and Russia have united?". The following answers were received from the countries that are entering and are applying for membership in the customs union:

- Tajikistan: "positively" 76%, "indifferent" 17%, "negative" 2%.

- Kazakhstan: "positively" 80%, "indifferent" 10%, "negative" 5%.

- Russia: "positive" 72%, "indifferent" 17%, "negative" 4%.

- Uzbekistan: "positively" 67%, "indifferent" 14%, "negative" 2%.

- Kyrgyzstan: "positively" 67%, "indifferent" 15%, "negative" 8%.

- Moldova: "positive" 65%, "indifferent" 20%, "negative" 7%.

- Armenia: "positive" 61%, "indifferent" 26%, "negative" 6%.

- Belarus: "positively" 60%, "indifferent" 28%, "negative" 6%.

- Ukraine: "positively" 57%, "indifferent" 31%, "negative" 6%.

- Azerbaijan: "positively" 38%, "indifferent" 46%, "negative" 11%.

- Georgia: "positively" 30%, "indifferent" 39%, "negative" 6%.

Expert opinions

According to the Secretary of the Customs Union Commission Sergei Glazyev, the TC is beneficial both in terms of geopolitics, and in terms of economics. This is an important achievement that gives many undeniable benefits to participating States.

According to the head of the Russian FTF Andrei Belyaninov at the conference in 2009, the Customs Union at the beginning of its functioning will create problems for business and customs authorities, but this is nothing more than a transitional period.

President of the Republic of Belarus Alexander Lukashenko defines the Customs Union as the next step towards creating a single economic space that will be the right form of economic relations between the participating countries.