DECISION OF ECONOMIC COUNCIL OF COMMONWEALTH OF INDEPENDENT STATES

of April 4, 2008

About practice of application by the State Parties of the CIS of restrictions in mutual trade and offers on their step-by-step cancellation

The economic council of the Commonwealth of Independent States solved:

1. Take into consideration Information on practice of application by the State Parties of the CIS of restrictions in mutual trade and offers on their step-by-step cancellation it (is applied), provided by Executive committee of the CIS and considered by the Commission on economic problems.

2. Ask the governments of the State Parties of the CIS to provide to Executive committee of the CIS till July 1, 2008 offers on further work on step-by-step cancellation of restrictions in mutual trade for generalization and informing CIS Economic Council.

3. Send the provided Information to the governments of the State Parties of the CIS for informing the interested ministries and departments.

Information on practice of application by the State Parties of the CIS of restrictions in mutual trade and offers on their step-by-step cancellation

The agreement on creation of the free trade area of April 15, 1994 and the Protocol to it of April 2, 1999 provides step-by-step liquidation of tariff and quantitative restrictions in mutual trade of the State Parties of the CIS. However, despite tendency to liberalization of mutual trade exchange within the CIS, the majority of the State Parties of the CIS temporarily keep number of rationing arrangements of regulation of import and export of products. The number of such measures is consistently reduced that in general is corresponded to universal practice. And considerable part of trade restrictions in relations of the State Parties of the CIS, as well as in world practice, are the share of import. Barriers when exporting restrictedly are applied, as a rule, in the fiscal purposes or to preserving part of specific goods in the domestic market.

Tariff restrictions in mutual trade

Application of restrictions (withdrawals) from free trade regime in the Commonwealth is regulated by provisions of article 3 of the Agreement on creation of the free trade area of April 15, 1994 and item 10 of the Protocol of April 2, 1999 on modification and amendments in the Agreement on creation of the free trade area of April 15, 1994: "In trade between the Finishing speaking Parties from the moment of the introduction for them owing to the this Protocol will not be entered new, in addition to earlier fixed in bilateral agreements, the quantitative and tariff restrictions of import and (or) export and measure having equivalent action". The same Item provides approval of step-by-step cancellation of withdrawals.

Fixing of tariff restrictions (withdrawals) from free trade regime in the form of customs duties, and also taxes and fees having with them equivalent action was complete in 2004-2005 during negotiation process. Now withdrawals and terms of their cancellation are generally fixed in bilateral protocols on 15 line items of the Commodity nomenclature of foreign economic activity of the CIS (the Commodity Nomenclature of Foreign Economic Activity of the CIS) when importing and to 9 line items when exporting (from more than 11 thousand line items of the commodity nomenclature). On established practices refining of the existing lists of withdrawals from free trade regime and terms of their cancellation is carried out within the bilateral intergovernmental commissions on trade and economic cooperation with the states with which in mutual trade withdrawals are applied.

At the multilateral level work on cancellation of the operating tariff restrictions is carried out according to the Protocol on step-by-step cancellation of restrictions in mutual trade of the State Parties of the CIS (further - the Protocol) signed at meeting of Council of CIS Heads of Government on June 3, 2005. Participants of the Protocol are eight State Parties of the CIS. Did not sign the Protocol: Republic of Moldova, Turkmenistan, Republic of Uzbekistan and Ukraine. The Republic of Belarus informed on accession to the specified document. Now the interstate procedures necessary for the introduction of the Protocol in force in the states which signed it and for accession of the Republic of Belarus to it are performed.

The protocol provides consecutive cancellation of the majority of tariff restrictions (vodka, tobacco and products from it, beer malt, sugar, ethyl alcohol and wine) in the period till January 1, 2012.

As showed the monitoring of the operating withdrawals from free trade regime which is carried out based on the data provided in 2007 by the State Parties of the CIS according to Protocol provisions now the following tariff withdrawals are cancelled:

- according to item 1.1.1 withdrawal on vodka is cancelled by all State Parties of the CIS, except for mutual trade of the Russian Federation and the Republic of Uzbekistan and import to the Republic of Kazakhstan from Ukraine; planned cancellation of withdrawal on tobacco and products from it is also performed, except for import to Georgia from the Russian Federation and import to the Republic of Kazakhstan from Ukraine;

- according to item 1.1.2 withdrawal on beer malt is cancelled by the State Parties of the CIS, except for import to the Republic of Kazakhstan from Ukraine, Georgia when importing from the Russian Federation;

- according to item 1.1.3 withdrawal on white sugar is cancelled by the State Parties of the CIS, except for the Republic of Belarus, mutual trade between the Republic of Moldova and Ukraine, between the Russian Federation and the Republic of Uzbekistan, and also Ukraine when importing from Georgia;

- according to item 1.2.1 no later than January 1, 2008 quoting of import of beer, alcoholic beverage and tobacco products which is applied now by the Republic of Belarus and the Kyrgyz Republic is subject to cancellation.

Now the states in any degree keep in mutual trade tariff restrictions when importing and (or) exporting products or application of such restrictions. The list of the operating tariff restrictions is given in appendix 1.

Tariff restrictions when importing include mainly excise goods of group 22 "Alcoholic and soft drinks", groups 24 "Tobacco and industrial substitutes of tobacco" and sugar. Tariff restrictions when exporting extend mainly to food and alcoholic products.

The Azerbaijan Republic applies restrictions in case of commodity import from the Republic of Kazakhstan and the Russian Federation (the relevant bilateral protocols are signed), the term of cancellation of the operating withdrawals - on January 1, 2012.

The Republic of Armenia signed protocols on withdrawals from free trade regime with the Republic of Belarus and the Russian Federation. Effective period of the specified protocols expires on January 1, 2012.

The Republic of Belarus applies restrictions when importing from the Azerbaijan Republic, the Republic of Armenia, Georgia, the Republic of Moldova, Turkmenistan and Ukraine. All withdrawals (except sugar) are entered according to the Single list approved by the Decision of Interstate council of Eurasian economic community (EurAsEC) of September 21, 2004 No. 191. Single terms of cancellation of withdrawals are established by EurAsEC in coordination with the governments of state members of EurAsEC.

Georgia applies tariff restrictions when importing from the Russian Federation. The bilateral protocol is signed on July 10, 2001.

The Republic of Kazakhstan applies restrictions when importing from the Azerbaijan Republic, the Republic of Uzbekistan and Ukraine. The relevant bilateral protocols on withdrawals are signed.

According to the Protocol of May 24, 2005 on modification and amendments in the Agreement between the Government of the Republic of Kazakhstan and the Government of the Azerbaijan Republic on free trade of June 10, 1997 withdrawals when importing alcoholic and soft drinks since July 1, 2006, the term of cancellation of withdrawals on alcohol and tobacco products - on January 1, 2012 are cancelled.

According to the Protocol of November 11, 2004 on modification and amendments in the Agreement between the Government of the Republic of Kazakhstan and the Government of Georgia on free trade of November 11, 1997 withdrawals are cancelled: when importing alcoholic and soft drinks, tobacco and sugar - since April 1, 2005, alcohol - since January 1, 2006.

Earlier when importing from Georgia according to the Protocol of November 11, 1997 the following withdrawals were applied: 1701 99 100 - sugar, 2203 - beer, 2205 - Vermouths and grape wines, 2206 - the drinks other fermented 2207 - the ethyl alcohol which is not denatured with alcohol content at least 80 about. %, group 24 - tobacco and industrial substitutes of tobacco.

The Kyrgyz Republic of tariff withdrawals in mutual trade with the State Parties of the CIS does not apply.

The Republic of Moldova in 2003 unilaterally excluded from free trade regime with Ukraine beet and cane sugar, other types of sugar, confectionery from sugar, ethyl alcohol.

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