The customs union is formed with the aim of creating a single territory, and customs taxes and economic restrictions apply within it. The exception is countervailing, protective and antidumping measures. The customs union implies the application of a single customs tariff and other measures designed to regulate the trade in goods with third countries.
Definition
A customs union is an association of several member states that conduct joint activities in the field of customs policy. Also, customs duties and borders between participants are abolished, and for other states a single customs tariff is introduced.
Story
The first such union arose in the nineteenth century, to which France and Monaco became members.
At the beginning of the twentieth century, those who entered into the Customs Union are Switzerland and the Principality of Liechtenstein. You can also cite as an example the conclusion in the twentieth century of the General Agreement on Tariffs and Trade, in 1957 the European Economic Community was established, which removed 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 customs taxes and quantitative restrictions on the trade of members of the association.
There are still differences in customs regulations in the EEC and EFTA countries, there are no uniform trade duties, in the socialist countries there is no Customs Union, but agreements have been concluded that presuppose cooperation and mutual assistance on customs issues.
Unified documents, methods and forms for the clearance of goods, both exhibition and fair, were introduced. Agreements were signed to simplify their clearance at customs. These agreements accelerate the promotion of goods, strengthen the global 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.
This year, Kyrgyzstan joined the Customs Union, while Russia is strengthening its position.
Acceptance of the Customs Union
On October 6, 2007, an Agreement was concluded between the Russian Federation, the Republic of Belarus and Kazakhstan on the transition to a single Customs Union.
On July 1, 2010, in accordance with the customs code, a single customs territory of the three participating countries began to function.
Eliminated the declaration and customs clearance at the borders of these three states. Goods can be moved without clearance, which eliminates the cost. They move much easier and reduce the cost of shipping.
In the future, the Common Economic Space (CES) will appear on the territory of the Union with a working single market for 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 makes some changes in geopolitics. And the new structure of the Customs Union organization (Kyrgyzstan, Russia, Kazakhstan and others) will expand trade relations in the CU countries.
General information
A customs union is an association aimed at raising the economic level in member states. The established market has more than 180 million people with a cash turnover of 900 billion dollars.
The conclusion of the Customs Union allowed goods to move freely throughout the territory with universal control.
If the fact of export is documented, then you do not need to pay excise taxes, and the VAT rate is zero.
In the case of imports of goods to Russia from Kazakhstan and Belarus, the Russian tax authorities levy excise taxes and VAT. The customs union is an easy and profitable form of interaction.
Structure
Participants in the organization of the Customs Union (Customs Union):
- Russia and Kazakhstan (from 01.07.2010 year).
- Belarus (from 07/06/2010).
- Armenia (from 10.10.2014 year).
- Kyrgyzstan (from 08.05.2015 year).
Candidates for membership:
- Tajikistan.
- Syria.
- Tunisia.
Joining the Customs Union of the candidate countries is considered in the very near future. Expanding an 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 highest governing body is the International Council of Heads of State and Government. Also, according to the agreement, the Commission of the Customs Union is established, which is a permanent regulatory body.
The supreme bodies of the institution in 2009 carried out comprehensive 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 created as a permanent regulatory body of supranational governance, which is subordinate to the Supreme Eurasian Economic Council.
Main advantages
The main advantages of the Customs Union for business entities in comparison with the free trade area are:
- In the territories of the Customs Union, expenses for the creation, processing and movement of goods have significantly decreased.
- The cost of time and finances arising from administrative barriers has decreased markedly.
- The number of customs procedures required to complete when importing goods from third countries has decreased.
- New markets for goods became available.
- The unification of customs legislation has led to its simplification.
Customs Union and WTO
In the process of creating the Customs Union, many concerns were expressed about the contradiction of the rules of the Customs Union to the rules of the WTO.
In 2011, the organization brought all its standards to full compliance with WTO standards. If the states of the Customs Union join the WTO, WTO rules will be considered priority.
In 2012, Russia joined the WTO, which led to the updating of the Unified 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, meat imports from Belarus to Russia were banned. The volume was about 400 thousand tons. At the same time, the Russian side took measures to tighten control of goods that cross the border of Belarus, which contradicts the simplified rules for the transport of goods in force on the territory of the Customs Union.
Observers noted a good combination of the mechanism of the Customs Union and the mechanism of re-export of prohibited European goods to Russia. For example, imports of fish from Belarus, which has no access to the sea, to Russia increased by 98 percent.
Belarusian President A.G. Lukashenko was outraged by the prohibitions of the Russian side and accused Russia of violating the rules of the Customs Union and neglecting international law.
According to observers, the rules contain a clause according to which, if Russia imposes restrictions 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 EAEU agreement. It was also announced the likely abandonment of the ruble as a settlement currency and the return of settlements in US dollars. Russian experts believe that in such a situation, regional integration will come under attack.
Criticism
In 2010, opposition forces made an attempt to organize a referendum for the denunciation of the agreements. Kazakhstan made a claim about infringement of sovereign rights.
Critical comments were also made by the Customs Union on the following points:
- Poorly developed terms of trade and certification of goods.
- The terms of the WTO were imposed by Russia on Kazakhstan and Belarus, which are not members of the aforementioned organization.
- Incomes and receipts are allegedly unfairly distributed among the participating countries.
- The Customs Union is disadvantageous as a project to current and potential participants.
Meanwhile, studies indicate that, for a number of ideological reasons, the Customs Union is beneficial to its members to varying degrees.
It was also suggested that the Customs Union is a phantom, it is not viable as an artificial political entity.
Opinions in society
In 2012, the Center for Integration Studies at the Eurasian Development Bank conducted a sociological survey. The survey involved CIS countries and Georgia. The question was asked: "How do you feel about the fact that the economies of Belarus, Kazakhstan and Russia are united?" The following responses were received from countries entering and applying for entry into the customs union:
- Tajikistan: “positive” 76%, “indifferent” 17%, “negative” 2%.
- Kazakhstan: “positively” 80%, “indifferent” 10%, “negatively” 5%.
- Russia: “positive” 72%, “indifferent” 17%, “negative” 4%.
- Uzbekistan: “positively” 67%, “indifferent” 14%, “negatively” 2%.
- Kyrgyzstan: “positive” 67%, “indifferent” 15%, “negative” 8%.
- Moldova: “positively” 65%, “indifferent” 20%, “negatively” 7%.
- Armenia: “positive” 61%, “indifferent” 26%, “negative” 6%.
- Belarus: “positively” 60%, “indifferent” 28%, “negatively” 6%.
- Ukraine: “positively” 57%, “indifferent” 31%, “negatively” 6%.
- Azerbaijan: “positively” 38%, “indifferent” 46%, “negatively” 11%.
- Georgia: “positively” 30%, “indifferent” 39%, “negatively” 6%.
Expert Opinions
According to the Secretary of the Customs Union Commission Sergey Glazyev, the CU is beneficial both in terms of geopolitics and in terms of economy. This is an important achievement that provides many undeniable benefits to participating States.
According to the head of the FTF of Russia Andrei Belyaninov at a 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.