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Getting The Deal Through

Eurasian Economic Union

Edward Borovikov, Bogdan Evtimov, Igor Danilov and Taras Povorozniuk

Dentons

Thursday 15 August 2019


Domestic legislation

1 What is the main domestic legislation as regards trade remedies?

The legal basis for trade defence instruments (TDI) (ie, anti-dumping (AD), countervailing (CV) and safeguards (SG)) is the founding Treaty on the Eurasian Economic Union of 29 May 2014 between the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation as amended upon accessions of the Republic of Armenia and the Kyrgyz Republic (EAEU Treaty) and, specifically, Annex 8 thereof, which contains Protocol No. 8 on Application of Safeguards, Anti-dumping and Countervailing Measures in Respect of Third Countries (TDI Protocol). A number of secondary acts of the Eurasian Economic Commission (EEC) regulate specific aspects of TDIs, including confidentiality matters, cooperation among the EAEU and member states’ authorities, internal decision-making procedures and methodological materials for domestic producers aimed at facilitating the preparation of complaints. The EAEU Treaty and the secondary acts are available at the EAEU Law Portal at https://docs.eaeunion.org/en-us/. All documents are in Russian, while selected legal acts are also translated into Armenian, Belarusian, Kazakh, Kyrgyz and English. Specifically, the database provides an unofficial translation of the EAEU Treaty, including the TDI Protocol.

TDIs of the Eurasian Economic Union (EAEU) are imposed on imports into the single customs territory of the EAEU. For the purposes of the legal framework of TDIs, the domestic industry of the EAEU is defined by reference to producers in all EAEU member states.

International agreements

2 In general terms what is your country’s attitude to international trade?

The primary external trade policy objectives of the EAEU members have been to liberalise regional trade and promote deeper economic integration among the Commonwealth of Independent States (CIS) countries. Those goals were pursued with the Customs Union (CU) of Russia, Kazakhstan and Belarus, which was formed in 2010; and more recently, the CU was complemented and overtaken by the more comprehensive regime of economic integration within the EAEU as of 1 January 2015. The new EAEU has the legal status of an international organisation vested with legal personality, which was not the case for the CU.

The EAEU is open to accessions by other countries. Armenia and Kyrgyzstan became new member states of the EAEU on 2 January 2015 and 12 August 2015, respectively. There are certain transitional arrangements in the areas of import tariffs and foreign trade regulation that apply to these newly acceded member states. No other EAEU accession negotiations are currently ongoing.

On 22 August 2012, Russia acceded to the World Trade Organization (WTO). This is considered to be the beginning of a process of gradual liberalisation, particularly with regard to import tariffs, of the CU/EAEU’s trade with the rest of the world in accordance with WTO rules. In joining the WTO as a member of the CU, Russia committed to ensure compliance of the CU (and its successor, the EAEU) TDI regimes with Russia’s WTO obligations and commitments. A number of Russian industries have regularly expressed concerns regarding the potential negative effects of Russia’s WTO accession and have asked for increased protection of their trade interests.

Since accession to the WTO, Russia has been involved in a number of disputes, including seven cases as complainant and nine cases as respondent. In four disputes – Measures on the Importation of Live Pigs, Pork and Other Pig Products from the European Union (DS475), Tariff Treatment of Certain Agricultural and Manufacturing Products (DS485), Anti-Dumping Duties on Light Commercial Vehicles from Germany and Italy (DS479) and Russia — Measures affecting the importation of railway equipment and parts thereof (DS499) – Russian policies and measures were found partially inconsistent with the WTO Agreements. While the disputed measures in DS479 and DS485 had already been brought into conformity in accordance with the Panel’s findings, the disputed measure in DS499 is under appeal and the disputed measure in DS475 is still at the implementation stage, with a risk of retaliatory actions against Russia. In another dispute – Measures Concerning Traffic in Transit (DS512) – the Panel dismissed the claims against Russia and found no breaches of the WTO Agreements.

At the time of writing, two of the complaints that Russia brought to the WTO have reached the stage of WTO Panel report and were under appeal.

In September 2016, for the first time since its accession, Russia went through the WTO Trade Policy Review Mechanism; other WTO members had an opportunity to examine in detail Russia’s trade and trade-related policies and pose their questions and express views.

Russia received over 700 questions and comments from over 50 WTO members. Many welcomed the tremendous liberalisation efforts and remarkable improvements in Russia’s trade policy, while others noted that there is still much for Russia to do to improve. Many WTO members demonstrated great interest in Russia’s investment regime and EAEU developments, and raised new concerns in the areas of sanitary and phytosanitary and technical barriers to trade (TBT), local content requirements, customs control and import restrictions, as well as the transparency of certain policies.

Kazakhstan, a member of the EAEU, also became a member of the WTO on 30 November 2015. According to Kazakhstan’s WTO tariff concessions, one-third of its import tariff lines for goods are bound at rates lower than those provided under Russia’s bound tariff rates in the WTO or in the EAEU’s common customs tariff. In response to this issue, as a transitional solution Kazakhstan undertook not to allow the re-export of goods imported into Kazakhstan at lower tariffs to other EAEU member states. Accordingly, to qualify for free circulation status within the EAEU, goods imported into Kazakhstan at lower rates should become subject to the higher EAEU import tariff. For this purpose, a special control system was introduced to monitor the movement of such goods, based on electronic customs declarations, invoicing and instant information exchange between the competent authorities of the EAEU member states. Kazakhstan is a respondent in one WTO dispute brought by Ukraine in September 2017 – Anti-Dumping Measures on Steel Pipes (DS530). At the time of writing, the dispute is at the consultation stage.

Armenia and Kyrgyzstan have been WTO members since 2003 and 1998, respectively. Their accession to the EAEU has triggered similar issues concerning tariff differences of their WTO tariff bindings with the EAEU common customs tariff. As a result, these countries also agreed temporary derogations (ie, lower tariffs) from the EAEU common customs tariff for certain goods imported for internal consumption. Such tariff derogations from the EAEU are only temporary; both new EAEU member states have announced their intention to enter into their respective tariff renegotiations in the WTO with the affected WTO members, while the actual renegotiations have not yet started.

WTO accession negotiations for Belarus formally started in 1993, but were suspended for decades until the accession process was resumed on 24 January 2017. Belarus has been invited to submit written replies to members’ questions, an updated Legislative Action Plan, copies of relevant draft and adopted legislation, and additional documentation such as updated information on domestic support to agriculture, state-trading enterprises and subsidies. The Working Party on accession remains active in 2019. Belarus expressed its strong commitment to conclude WTO accession negotiations by the 12th Ministerial Conference, which will take place in June 2020 in Nur-Sultan (previously Astana), Kazakhstan.

Government authorities

3 Which authority or authorities conduct trade defence investigations and impose trade remedies in your jurisdiction?

Since 1 July 2012, the authority for trade defence investigations in the EAEU is the EEC and the administrative service directly in charge of conducting trade defence investigations is the EEC’s Department for Internal Market Defence. The webpage of the Department for Internal Market Defence is available in the English language at www.eurasiancommission.org/en/act/trade/podm/Pages/default.aspx.

Final decisions to impose measures following investigations are made by the Board of the EEC, consisting of the EEC Ministers representing all the EAEU member states (www.eurasiancommission.org/en/Pages/structure.aspx).

Complaint filing procedure

4 What is the procedure for domestic industry to start a trade remedies case in your jurisdiction? Can the regulator start an investigation ex officio?

According to paragraph 186 of the TDI Protocol, an investigation can be initiated by the EEC on its own initiative or on the basis of a complaint lodged by the domestic industry manufacturing like products (relevant for AD and CV investigations) or like or directly competitive products (in the case of SG). In practice, so far all investigations have been initiated following domestic industry complaints.

A complaint can be lodged either by individual domestic producers or by a group or association of domestic producers manufacturing a major share of like products (for AD and CV) or like or directly competitive (for SG) products. The EAEU applies thresholds for domestic industry that are similar to those in other jurisdictions. In particular, the complainant must demonstrate that its complaint is expressly supported by at least 25 per cent of the total EAEU production, and, moreover, it must be supported by over 50 per cent of the volume of the like (or directly competitive) products manufactured by those producers which have expressed an opinion on the complaint.

The EEC will decide whether to open an investigation within 30 calendar days from the date when the complaint is deemed to have been submitted. This deadline may be extended where the EEC decides to request additional information or evidence; however, any such extension will not exceed 60 calendar days from the date of submission of the complaint.

The requirements for the preparation of a complaint are also similar to those in other jurisdictions: namely the complainants must provide a detailed description of the product concerned and the like or directly competitive products; detailed data on domestic capacity and production; an estimate of domestic consumption; trade data; data on the indicators relevant for injury analysis; available data on dumping by the imports from or specific subsidies in the targeted third country; and evidence on trends in imports and factors that may interfere with the analysis of a causal link with material or serious injury or threat thereof. The complaint must also contain a proposal on the form, amount and duration of the measures, and adjustment plans (if relevant, usually in the case of SG). Normally, all the data should cover a period of three calendar years preceding the year of submission of the complaint as well as data on further periods where representative statistics are available. All written submissions must be accompanied by non-confidential and relatively detailed summaries.

Contesting trade remedies

5 What is the procedure for foreign exporters to defend a trade remedies case in your jurisdiction?

The notice of initiation of a specific TDI investigation is published on the website of the EEC (www.eurasiancommission.org). The date of publication on the website is the first day of the new investigation.

Notifications are also sent to interested parties identified in the complaint and reasonably known to the investigating authorities. Notifications are also usually sent through diplomatic channels to the respective foreign governments of the affected countries. In recent practice, written notifications have occasionally reached their addressees with delays, causing difficulties for interested parties to comply with further procedural deadlines.

Interested parties (exporting producers, importers, consumer associations and authorities of exporting countries) can participate in the investigation in person or can appoint legal representatives. There are currently no restrictions on foreign attorneys acting as representatives of interested parties before the EEC. All investigations are, however, conducted in Russian and all documents must be submitted in Russian or accompanied by a Russian translation.

Within 25 days from the publication on the EEC’s website, interested parties must submit a letter to the EEC to be registered as participants in the investigation. Only registered interested parties (namely, participants) may obtain access to the non-confidential files, including a copy of the complaint. Participants must also request public hearings within 45 days and then subsequently submit their memorandum with defensive arguments and data relevant to the investigation within 60 calendar days from the date of initiation. The same deadlines apply to all types of TDI investigations in the EAEU.

Questionnaires must be answered within 30 days from their receipt (extensions are possible). The same deadline applies to all information requests in the course of the investigation.

Public hearings are normally scheduled within six to seven months after initiation. Within 15 days after the hearings interested parties are entitled to submit information in writing as provided orally in the course of the public hearings.

Safeguard investigations are normally concluded within nine months, with a possible extension of no more than three months. The respective periods for AD and anti-subsidy investigations are 12 months for conclusion and six months for extension.

Upon completion of the investigation and before the final decision, the EEC will send to the participants for comments a draft report on the main findings and conclusions of the investigation. The EEC Board will decide on the imposition of measures usually within 30 to 45 days from receipt of the report on the investigation and of a draft decision from the investigating authority.

WTO rules

6 Are the WTO rules on trade remedies applied in national law?

The EAEU is not in itself a WTO member; Russia has been a WTO member since 2012, Kazakhstan since 2015, Armenia since 2003 and Kyrgyzstan since 1998. Belarus is still negotiating its terms of accession.

According to the terms of accession of Armenia and Kyrgyzstan to the EAEU, their individual WTO accession commitments do not extend to other EAEU member states or to the EAEU as a whole.

All definitions of terms, procedural requirements and time limits that apply pursuant to the TDI Protocol and that are actually applied by the EEC in TDI investigations aim to follow the respective WTO rules on TDIs.

According to the generally accepted understanding, specific provisions in the WTO Agreements and the respective WTO accession commitments of the EAEU member states that have been implemented by the EAEU as part of the international agreements among its member states become an integral part of the EAEU’s legal order and should prevail over other laws that conflict with it. This position follows from the Treaty on the Functioning of the Customs Union in the Context of the Multilateral Trading System of 19 May 2011, which remains in force upon creation of the EAEU (Annex 31 of the EAEU Treaty). However, the WTO Agreements on TDIs do not have direct effect with respect to legal entities and individuals in the EAEU, and the latter cannot directly invoke the provisions of these WTO Agreements before the Court of the Eurasian Economic Union (EAEU Court). Arguably, such legal claims can be done by reference to the provisions of the EAEU Treaty and other international agreements within the EAEU that implement the respective WTO provisions.

Under the TDI Protocol all third countries are treated as market economy countries.

Appeal

7 What is the appeal procedure for an unfavourable trade remedies decision? Is appeal available for all decisions? How likely is an appeal to succeed?

As of 1 January 2015, the EAEU Court is the sole competent institution for judicial review of TDI measures adopted by the EEC Board. All acts and actions (inactions) that allegedly violate provisions of the EAEU Agreements and individual rights provided under those Agreements can be challenged before the EAEU Court. Since its establishment, the EAEU Court has issued only one judgment dismissing claims submitted by an exporting producer from Ukraine in relation to AD measures on steel rebar. Notably, this was the first proceeding under the enhanced rules of procedure, which required a report from a specially appointed expert group.

In 2012–2014, the EurAsEC Court (the predecessor of the EAEU Court, but limited to CU matters only) had considered three TDI cases (all three concerned AD measures). In its practice, the EurAsEC Court demonstrated a reasoned approach and willingness to interpret the rules of the CU in light of specific WTO provisions and, particularly, with due regard to the judicial practice of the Court of Justice of the European Union, including, to a certain extent, the applicability of the relevant WTO rules in the domestic legal order. However, the EurAsEC Court did not uphold any of the above three legal actions lodged against TDI measures.

Review of duties/quotas

8 How and when can an affected party seek a review of the duty or quota? What is the procedure and time frame for obtaining a refund of overcharged duties? Can interest be claimed?

The EAEU respects all relevant WTO disciplines on reviews and refunds, and there is a legal possibility to request minimum price undertakings and interim/administrative, newcomer and expiry/sunset reviews, as well as refunds of AD or CV duties paid, in accordance with the TDI Protocol. In 2016–2019, the EEC initiated a number of review proceedings, including interim reviews, expiry reviews and an anti-circumvention inquiry.

In 2015, the EEC accepted the very first minimum price undertaking from several cooperating exporting producers in the AD investigation on oil country tubular goods from China. In the following years, one Chinese producer failed to comply with the conditions of the price undertaking, which was consequently withdrawn with respect to this company. In 2018, the EEC also accepted price undertakings from two cooperating exporting producers in the AD investigation on herbicides from the European Union (EU).

Under the TDI Protocol, reviews may be initiated upon the request of an interested party (an exporting producer, complainants). The EEC may also initiate an ex officio interim review, for example, as a result of an amicable out-of-court settlement or implementation of the EAEU Court’s rulings. In particular, a similar development took place in the course of one judicial proceeding within the EAEU Court, where, as a result of an agreement with the complainant, the judicial proceeding was suspended, and the EEC agreed to initiate an interim review limited to the determination of dumping. The review resulted in a minor revision of the AD duties imposed. After reopening of the judicial case on the complainant’s initiative, the EAEU Court found the revised duties to be consistent with the CU legal order and dismissed the action.

Therefore, interested parties are encouraged to request reviews and refunds where this is warranted by evidence.

Compliance strategies

9 What are the practical strategies for complying with an anti-dumping/countervailing/safeguard duty or quota?

The EAEU and the EEC’s practice in this respect remains rather limited. Parties have the right to request minimum-price undertakings, reviews and refunds as discussed under question 8. While it has already happened in practice, in general, the EEC is often reluctant to accept price undertakings. Where a measure or decision of the EEC in this respect is deemed unlawful, it may be challenged before the EAEU Court.

It is noted that the TDI Protocol provides for anti-circumvention investigations and measures. In 2017, the EEC completed an anti-circumvention proceeding regarding original measures on seamless tubes and pipes of stainless steel originating from China, which were extended to products originating from Malaysia.

Normal rates and notification requirements

10 Where are normal customs duty rates for your jurisdiction listed? Is there an exemption for low-value shipments, if so, at what level? Is there a binding tariff information system or similar in place? Are there prior notification requirements for imports?

The normal (most-favoured nation – MFN) customs duty rates on import of goods into the common customs territory of the EAEU are listed in the Unified Customs Tariff of the Eurasian Economic Union (ETT). The ETT is revised annually in accordance with the Eurasian Economic Union’s Single Commodity Nomenclature of Foreign Economic Activities (TN VED EAEU), which in turn is based on the Harmonized System of the World Customs Organization. The authority empowered to adopt and amend the ETT and the TN VED EAEU is the EEC Board.

Information on import duty rates is available in Russian on the EEC website (www.eurasiancommission.org/ru/act/trade/catr/ett/Pages/default.aspx). This section of the website is updated regularly and contains generally correct information on duty rates; however, it is made available for information purposes only and is not legally binding.

However, certain tariff lines for goods destined solely for domestic consumption in Kazakhstan, Armenia and Kyrgyzstan are temporarily exempt from the common ETT tariff rates (see question 2), while Russia and Belarus apply ETT rates to all imported goods. If the exempt goods are to be released for free circulation within the EAEU, they become subject to the common ETT rates.

On 1 January 2018, the Customs Code of the Eurasian Economic Union (CC EAEU) replaced the previously applied Customs Code of the Customs Union.

The EAEU member states have concluded a separate accord concerning export duties. According to this accord, each member state of the EAEU establishes its own list of certain goods in respect of which export duties may apply, which is communicated to the EEC. On that basis, the EEC maintains a consolidated list of products subject to export duties for all member states of the EAEU. Member states retain the power to adopt and amend the export duty rates applied on export of goods, contained in the consolidated list and originating in their territories. Similar rules are reflected in the CC EAEU. Export duty rates are subject to periodic amendments by decisions of governments of the member states. There is no single official public database at the EAEU level where up-to-date export duty rates can be consulted.

Customs authorities of EAEU member states have a system of issuing preliminary customs classification decisions that may affect the customs duty rate applicable to a product for which such a decision has been requested (similar to the systems of issuing binding tariff information practised in other jurisdictions). Preliminary decisions taken at the national level are reported to the EEC and listed in a special database, which is available in Russian at the website of the EEC at www.eurasiancommission.org/ru/docs/Lists/List/AllItems.aspx.

According to article 22 of the CC EAEU, the EEC may also adopt decisions and clarifications on customs classification of certain goods upon respective proposals or requests from customs authorities of EAEU member states. There is no unified database of such decisions or clarifications.

According to the CC EAEU, all imported goods are subject to a prior notification procedure; however, only part of the information, which relates to risk assessment and choice of customs control form, is mandatory for prior submission, while other information remains optional, aimed at facilitating customs clearance. Prior notification may be done electronically at the websites of national customs authorities of the EAEU member states.

EAEU member states maintain a duty-exemption regime for low-value shipments, including for e-commerce, in accordance with Decision of the EEC Council N107 of 20 December 2017. The authorities decided to proceed with the gradual reduction of the maximum value and weight thresholds applied to duty exemptions. Therefore, from 1 January 2019 the threshold for international postal deliveries is set at €500 or 31 kg during one calendar month, while from 1 January 2020 it will be €200 or 31 kg per package. No further reductions are envisaged by the current EAEU legislation.

Note that while EAEU legislation defines the maximum threshold for duty exemptions, the CC EAEU allows each EAEU member state to introduce even lower limits, as provided above.

Special rates and preferential treatment

11 Where are special tariff rates, such as under free trade agreements or preferential tariffs, and countries that are given preference listed?

There is no single database at the EAEU level that lists duty rates applicable under preferential arrangements or preferential trade agreements.

The EAEU applies a Unified System of Tariff Preferences (USTP, analogous to the EU Generalised Scheme of Preferences) to promote economic growth and welfare in developing and least developed countries. Articles 36 and 37 of the EAEU Treaty specify tariff preferences granted to developing countries (75 per cent and 0 per cent of the MFN rate, for developing and least developed countries, respectively) and refers to preferential rules of origin applied to such imports.

The USTP preferences apply to goods included in a special list of goods and a list of countries eligible for such preferences. These lists are established by the EEC. The respective lists as well as the relevant legislation are available on the EEC’s website (www.eurasiancommission.org/ru/act/trade/dotp/commonSytem/Pages/normatBaza.aspx).

There is no official list or unified database for the existing preferential trade agreements of the EAEU member states with third countries. The agreements are numerous; however, the most noteworthy is the multilateral Agreement on a Free Trade Area of the CIS Countries (FTA CIS), which has been in force among the majority of the CIS countries since 2012. The FTA CIS has been suspended between Russia and Ukraine since 1 January 2016 due to exceptional national security reasons.

Traditionally, most CIS countries continue to maintain a network of bilateral free trade agreements (FTAs) between themselves.

In addition to the above multilateral FTA CIS, Russia currently maintains bilateral preferential trade agreements with Azerbaijan, Georgia, Serbia, Tajikistan, Turkmenistan and Uzbekistan. Kazakhstan has bilateral preferential trade agreements with Azerbaijan, Georgia, Serbia and Tajikistan. Belarus maintains preferential trade agreements with Azerbaijan, Serbia, Tajikistan, Turkmenistan and Uzbekistan; and Armenia with Georgia, Tajikistan and Turkmenistan. Kyrgyzstan has a bilateral preferential trade agreement with Uzbekistan.

Many of these agreements have specific product exclusions. The EEC is currently taking steps to encourage the EAEU member states to renegotiate existing bilateral trade agreements and conclude new ones so that the EAEU may become a party to them.

Notably, in its capacity of an international organisation vested with legal personality, the EAEU signed an FTA with the Socialist Republic of Vietnam, including a protocol on investment facilitation. This is the first ever FTA established between the EAEU and a third country, and it entered into force on 5 October 2016. Recently, the EAEU concluded FTA negotiations with Serbia and the signature of the respective agreement is expected in October 2019.

In 2018–2019, the EAEU signed an agreement on trade and economic cooperation with China and a temporary agreement aiming at the establishment of a free trade zone with Iran, as well as a memorandum of cooperation with the largest regional associations – ASEAN and Mercosur.

12 How can GSP treatment for a product be obtained or removed?

According to articles 36 and 45 of the EAEU Treaty, the EEC administers the USTP and is responsible for maintaining and updating the following lists:

  • a list of eligible developing countries entitled to the general tariff preference (currently 102 countries);
  • a list of eligible least developed countries entitled to the special tariff preference (currently 49 countries); and
  • a list of eligible goods originating from developing countries and least developed countries that fall within the scope of the USTP.

The eligibility criteria for the inclusion of countries in the above lists are set out in the Regulation on Conditions and Procedure for the Application of EAEU Unified System of Tariff Preferences adopted on 6 April 2016. This Regulation specifies the country-related criteria, which are complex and include not only relative volume of import and level of country income criteria, but also a number of other requirements, some of which can be regarded as policy or discretionary criteria. The EEC adopts a list of eligible goods at its own discretion unless the products are considered to be sensitive for domestic industry or subject to the tariff quotas.

13 Is there a duty suspension regime in place? How can duty suspension be obtained?

The EEC is empowered to adopt decisions on tariff suspensions upon requests from the EAEU member states.

Given the recent delegation of respective powers from the EAEU member states to the EEC, there is not yet an established formal procedure for requesting tariff suspensions. Therefore, economic operators may be advised to address substantiated requests for tariff suspensions to their national competent ministries, which in turn can refer the request to the EEC.

The possibility for EAEU member states to provide unilaterally customs privileges in the form of partial or complete reduction of normal customs duty rates for specific tariff lines or end uses is provided for in article 43 and Annex 6 of the EAEU Treaty (ie, Protocol on Common Customs Tariff Regulation). These customs privileges may not benefit individual companies and shall not depend on the origin of the goods.

Challenge

14 Where can customs decisions be challenged in your jurisdiction? What are the procedures?

Acts or omissions of the EEC that affect the individual rights and interests of economic operators provided under the EAEU agreements, including customs tariff policy matters, may be challenged directly by affected economic operators before the EAEU Court.

Decisions of the customs authorities of the EAEU member states can be challenged according to procedures provided in each national jurisdiction. Customs decisions of the Russian authorities can be challenged via an administrative appeal before the higher customs authority and via a judicial challenge before the Russian civil and arbitration courts in accordance with Chapter 51 of the Federal Law on Customs Regulation in the Russian Federation and on amendments into certain legal acts of the Russian Federation (No. 289-FZ of 3 August 2018). Customs decisions in Kazakhstan are challenged in accordance with several procedures, depending on the type of customs decision being challenged. The challenge involves higher administrative authorities and the national courts. These procedures are provided for in the Code of the Republic of Kazakhstan on Customs Affairs (No. 123-VI ZRK of 26 December 2017) and other legal acts. Customs decisions in Belarus are challenged by a complaint to the customs authorities or to the court (Law on Customs Regulation in the Republic of Belarus No. 129-Z of 10 January 2014). Similar possibilities for challenging customs decisions through higher-level customs authorities or national courts are also available in Armenia and Kyrgyzstan.

Government authorities

15 What government office handles complaints from domestic exporters against foreign trade barriers at the WTO or under other agreements?

The EEC has not yet received a mandate from the EAEU member states for handling complaints against trade barriers in third countries, and the fundamental reason is that not all member states are WTO members yet. The member states of the EAEU that are WTO members (Armenia, Kazakhstan, Kyrgyzstan and Russia) can use WTO mechanisms to tackle trade barriers affecting their exported goods. However, under article 39 of the EAEU Treaty the EEC shall monitor trade barriers in third countries and undertake respective consultations with the latter countries together with the EAEU member states.

Complaints against trade barriers are handled by the competent ministries responsible for the economy and trade of each member state. Russia represents a particular interest in light of its leading experience as a WTO member and the volume of its export trade. In Russia, the competent authority for handling trade barrier complaints is the Ministry of Economic Development (MED), which has an experienced team of foreign trade experts who regularly deal with complaints about trade barriers in third countries. The comprehensive and up-to-date list of trade barriers on foreign markets identified by the Russian authorities is published on the MED’s Information Portal for Foreign Trade at www.ved.gov.ru/rus_export/torg_exp/ (in Russian).

Complaint filing procedure

16 What is the procedure for filing a complaint against a foreign trade barrier?

The national laws of the EAEU member states do not provide for a specific procedure for the filing of complaints against trade barriers in third countries. However, the competent authorities are generally open to hearing the concerns of domestic businesses. There are no specific time limits. In Russia complaints are submitted in free written form and are considered by the MED.

Economic operators in Armenia, Kazakhstan, Kyrgyzstan and Russia may submit a complaint based on arguments in line with WTO rules and challenging effective trade barriers against exports of Armenian, Kazakh, Kyrgyz and Russian-originating goods and services. Such complaints are handled by the Ministry of Economy in Armenia, the Ministry of National Economy of Kazakhstan, the Ministry of Economy in Kyrgyzstan and the Ministry of Economic Development in Russia, and may be used as a basis for possible consultations or dispute settlement proceedings under WTO rules.

Grounds for investigation

17 What will the authority consider when deciding whether to begin an investigation?

The authorities as a rule recommend that interested parties collect available relevant data, such as legislative or administrative acts of the third country’s authorities that are believed to be the reason for the trade barrier, statistical information on trade flows that have decreased or are expected to decrease as a result of the imposition of the trade barrier, and data on the negative impact of the trade barrier on the business of the complaining company or effect on the economy of the EAEU member states.

As of 2013, the EEC undertakes monitoring and reporting of foreign trade barriers for goods exported by the EAEU members. The respective reports and lists of foreign trade barriers are published on the EEC’s website (www.eurasiancommission.org/ru/act/trade/dotp/Pages/dostup.aspx).

Measures against foreign trade barriers

18 What measures outside the WTO may the authority unilaterally take against a foreign trade barrier? Are any such measures currently in force?

Following the accession of EAEU members to the WTO, their actions must comply with WTO rules. Only Belarus is still a non-WTO member; however, the obligations of Belarus under the EAEU Treaty (which seek to ensure, where possible, compliance with WTO rules) may have a restrictive effect on the ability of Belarus to take unilateral actions against foreign trade barriers.

Under the EAEU Treaty, the EAEU as an international organisation with legal personality may undertake retaliatory measures in accordance with the bilateral or multilateral agreements of the EAEU. In this regard, the EAEU member states have working procedures in place to take parallel coordinated action in case a third country imposes a trade barrier or other trade-restrictive measures on one of them. The relevant member state will report the case to the EEC. In consultation with the EEC, member states may then agree upon taking parallel unilateral or multilateral retaliatory measures. Such parallel actions on behalf of the EAEU might become particularly relevant if Armenia, Kazakhstan, Kyrgyzstan or Russia were to be authorised by the WTO to impose retaliatory measures as a result of successful WTO dispute settlement proceedings following non-compliance.

Article 40 of the EAEU Treaty explicitly authorises unilateral retaliatory measures under multilateral (WTO) or bilateral (FTA) international agreements where individual EAEU members are parties. In August 2018, Russia unilaterally increased tariffs up to 30 per cent on a number of US goods (eg, optical fibres and road machinery) as retaliation for the US Section 232 measures on steel and aluminium products. Other EAEU members have not taken recourse to similar retaliatory measures against the US. Although, hypothetically, similar measures are available to EAEU members in response to the definitive safeguard measures of the EU on certain steel products, adopted in February 2019, they have not taken recourse to this retaliatory instrument.

However, there are notable exceptions to the above EAEU rules. According to article 47 and section X of Annex No. 7 (Protocol on Measures of Non-Tariff Regulation Applicable to Third Countries) of the EAEU Treaty, in exceptional circumstances, the EAEU members may unilaterally impose bans and quantitative limitations on imports as well as licensing, exclusive rights and authorisation requirements in regard to imports from third countries. Normally, the duration of such restrictive measures should not exceed six months. In cases where a specific foreign trade barrier might be qualified as relating to exceptional circumstances, such unilateral retaliatory measures would be justified under EAEU law (see also question 29).

Private-sector support

19 What support does the government expect from the private sector to bring a WTO case?

As yet there are no specific rules in the EAEU member states concerning the establishment of procedures and requirements for the preparation of WTO dispute settlement complaints. The practical support for the preparation of a WTO case – such as the initiative for relevant research, evidence, translations and expert advice – is largely a task for the business community. The competent authorities, such as Russia’s Ministry of Economic Development, can step in when the business has prepared the groundwork, including reliable WTO legal argumentation, and can then ensure effective support.

Notable non-tariff barriers

20 What notable trade barriers other than retaliatory measures does your country impose on imports?

The EAEU Treaty provides for a harmonised system of non-tariff trade regulation on the basis of Annex No. 7 of the EAEU Treaty (Protocol on Measures of Non-Tariff Regulation Applicable to Third Countries), as well as on the basis of other EAEU Treaty provisions and Annexes relating to specific types of non-tariff measures (eg, technical regulations, sanitary and hygienic measures, veterinary and phytosanitary surveillance and export control measures).

The above Protocol stipulates general rules and principles for the adoption, imposition and use of specific types of non-tariff measures. While the adoption of each non-tariff measure and management of the respective unified lists of the measures are done by the EEC, administration and enforcement of the measures remain within the competence of the EAEU member states and are governed by their national laws. According to the Protocol, the EAEU may introduce the following non-tariff measures on imports and exports:

  • bans and quantitative restrictions;
  • exclusive rights;
  • automatic licensing; and
  • authorisations (non-automatic licensing; see also Rules on Issuance of Licences and Authorisations on Exports and Imports of Goods, in the Addendum to Annex No. 7 of the EAEU Treaty).

The unified and regularly updated lists of goods and respective non-tariff measures of the EAEU are available on the EEC website at www.eurasiancommission.org/ru/act/trade/catr/nontariff/Pages/ed-perechen_title.aspx.

Other non-tariff measures, such as for export controls, technical regulations and SPS measures, including plant quarantine measures, are routinely applied by the EAEU and its member states. They are subject to Chapter XI and Annexes 9–12 of the EAEU Treaty as well as national implementing legislation. The most notable trade restrictions in Russia and the EAEU are traditionally of an SPS nature, including bans on the import of poultry and meat from the US owing to a bird flu epidemic or because of a zero-tolerance policy on residues of antibiotics and steroids (such as ractopamine, which is banned in Russia and also in other jurisdictions, such as the EU and China). Other goods subject to extensive safety controls and requirements in Russia and the EAEU include pork and other meat products from the EU due to the alleged African swine fever outbreaks (the latter restrictions were found to be inconsistent with Russia’s obligations and subject to possible retaliatory measures from the EU unless Russia were to effectively lift the ban), cheese, certain detergents and confectionery from Ukraine, and other items. Parallel to this, all EAEU members make extensive use of stringent import licensing regimes for alcohol and pharmaceuticals.

General controls

21 What general controls are imposed on exports?

The majority of goods exported from the customs territory of the EAEU are free from export controls and export taxes and duties. There are, however, exceptions, which often affect certain natural resources, hydrocarbons and energy goods, raw materials (including a number of metals), certain agricultural and forestry products, dual-use goods etc. The matter of customs duties on export in the context of the EAEU has been addressed in question 10; therefore, this section deals with other export controls. Exceptions for similar primary goods may also apply in internal trade among the EAEU member states.

The rules on export controls in the external trade of member states are provided in the Agreement on Unified Rules of Export Control of Member States of the Eurasian Economic Community (the Agreement) of 28 October 2003. The Agreement has been in force for the EAEU members since 1 January 2010 and is relevant also for internal trade among them. However, on 16 May 2014 Kazakhstan denounced the Agreement and currently applies its own national rules. Further, Kazakhstan has requested the exclusion of the provisions on export control from the scope of the EAEU Treaty.

The Agreement contains a set of common harmonised rules and procedures with regard to trade in specific raw materials; dual-use goods and equipment; technology and services that might be used in weapons of mass destruction and missile delivery systems; and military goods and equipment. The Agreement establishes a common list of goods and technology subject to export control.

Under the Agreement, the participants are called on to communicate and cooperate among themselves, and coordinate in the enforcement of export controls on goods included in the common list.

However, the member states retain certain powers and remain responsible for the establishment and management of national competent authorities in charge of administering export controls and issuing export licences for the listed goods. Procedures involving customs declarations, controls and, where relevant, payments of export taxes and duties apply to exports of goods and technologies on the common list outside the territory of the EAEU.

Government authorities

22 Which authorities handle the controls?

The following authorities handle export controls in the EAEU member states.

In Russia, the Federal Service for Technical and Export Control (FSTEC (fstec.ru)) is in charge of all matters on export control. It acts pursuant to the Federal Law on Export Control No. 183-FZ, of 18 July 1999.

In Kazakhstan, the Committee of Industry Development and Safety of the Ministry for Investments and Development of the Republic of Kazakhstan is responsible for export controls. It acts on the basis of the Law of Republic of Kazakhstan on Export Control No. 300 III of 21 August 2007.

In Belarus, the State Military-Industrial Committee of the Republic of Belarus (www.vpk.gov.by) is in charge of export controls under the Law of the Republic of Belarus on Export Control No. 363-3 of 11 May 2016.

In Armenia, the Ministry of Economic Development and Investments grants authorisation for the export of dual-use goods and technologies (www.mineconomy.am/en/81) under the Law of the Republic of Armenia on export control of dual-use items and technologies and their transit across the territory of the Republic of Armenia of 27 April 2010.

In Kyrgyzstan, the Commission on Military and Technical Cooperation and Export Control is responsible for the maintenance and enforcement of the National Control List of items subject to export control in the Kyrgyz Republic (Law of the Kyrgyz Republic on Export Control, No. 30, of 23 January 2003).

Special controls

23 Are separate controls imposed on specific products? Is a licence required to export such products? Give details.

On 21 September 2004, the participants of the EurAsEC – including Russia, Kazakhstan (withdrew on 16 May 2014), Belarus, Armenia and Kyrgyzstan – adopted common lists of goods and technologies subject to export control (Decision of the EurAsEC Interstate Council No. 190 of 21 September 2004). This decision remains in force and operational under the new EAEU regime, excluding Kazakhstan.

Those lists contain six model sub-lists for goods and technology items subject to export controls. The titles of the sub-lists include pathogenic microorganisms and substances and genetically modified organisms; special chemicals suitable for use in chemical weapons; and nuclear materials and non-nuclear materials and respective technologies, dual-use technologies and equipment, including but not limited to those applicable for nuclear uses, for use in military weapons, and for missiles. The specific contents of each sub-list are developed in the national legislation of each participant.

Exports of listed items are subject to non-automatic licences or permissions (an authorisation with attached conditions) issued by the national export control authorities indicated under question 22 above. There are individual (transaction-specific) and general (long-term) licences. At the EAEU level, the responsible national authorities are required to regularly exchange information on issued licences or permissions and on the conditions attached to such permissions.

Debates between the member states of the EAEU on the future of export control regulation in the EAEU are ongoing. At this stage it is difficult to foresee the potential outcomes for the future of common export control regulations.

Supply chain security

24 Has your jurisdiction implemented the WCO’s SAFE Framework of Standards? Does it have an AEO programme or similar?

The CC EAEU and other agreements concerning the EAEU have made efforts to take into account the World Customs Organization’s (WCO) SAFE Framework of Standards to facilitate global trade, as well as the related concept of authorised economic operators (AEO). Some provisions of the WCO’s SAFE Framework of Standards are also implemented directly into the national legislation of EAEU member states.

Under Chapter 61, the CC EAEU establishes an AEO programme and provides for the legal status of AEOs and the scope of their rights and responsibilities.

Since the AEO programme was fully implemented at the EAEU level only upon adoption of the CC EAEU, AEOs registered during previous years under the CC CU and national legislation of EAEU member states are subject to transitional arrangements – their status under the national legislation is confirmed for two years from the date of entry into force of the CC EAEU.

Applicable countries

25 Where is information on countries subject to export controls listed?

The administration of export controls in the EAEU and its member states (except Kazakhstan) is based on the sub-lists of goods subject to export control (see question 23) rather than on lists of countries of destination. However, the country of destination is relevant for the imposition of economic sanctions with respect to specific countries, persons and entities. For information on economic sanctions, see question 28.

Named persons and institutions

26 Does your jurisdiction have a scheme restricting or banning exports to named persons and institutions abroad? Give details.

As stated above, export controls with regard to the destination of the goods and technologies, including with respect to persons and institutions in third countries, are relevant in the context of economic sanctions. See question 30.

Penalties

27 What are the possible penalties for violation of export controls?

Penalties for violation of export controls are imposed according to the national legislation of the member states of the EAEU. All countries provide for administrative and criminal liability for individuals found to have violated export control rules. Their actions can also be subject to civil damage claims. Legal entities may be subject to financial penalties or may be prohibited from running foreign economic activities for up to three years, or both. The gravity of the penalties is similar in all EAEU member states.

In Russia, criminal offences related to export controls are subject to financial penalties up of to 500,000 roubles, imprisonment for up to three years and a prohibition on engaging in certain activities for up to five years or forced labour for up to three years. However, for violations committed by an organised group of persons or in connection with weapons of mass destruction, the imprisonment period is up to seven years and the financial penalty is up to 1 million roubles.

Administrative liability is limited to penalties of up to 20,000 roubles for legal entities and 2,000 roubles for individuals, with or without confiscation of the goods or property subject to the offence.

Government authorities

28 What government offices impose sanctions and embargoes?

The EEC may introduce measures on foreign trade to implement economic sanctions against specific third countries due to the international obligations of EAEU member states, such as sanctions approved by the United Nations Security Council. The measures should be adopted unanimously by all member states. The legal basis for imposition of economic sanctions is contained in the Protocol on Measures of Non-Tariff Regulation Applicable to Third Countries (Annex No. 7 of the EAEU Treaty).

Under the above Protocol, the EAEU member states may also adopt sanctions and embargoes at the national level for the protection of national security interests, in cases of balance of payments difficulties and for other reasons similar to general exceptions of the WTO Agreements as well as in exceptional situations, which are not clarified further in the EAEU Treaty. Such measures can be introduced pursuant to the respective domestic legislation (eg, article 13 of the Federal Law of the Russian Federation on Fundamentals of the State Regulation of Foreign Trade, No. 164-FZ, of 8 December 2003). Normally, the duration of such unilateral measures should not exceed six months. Other countries within the EAEU are called upon to respect and tolerate the unilateral measures adopted by an EAEU member state and affecting foreign trade with third states.

On 4 June 2018, the Federal Law on Measures to Mitigate (Counteract) Unfriendly Actions of the United States of America and Other Foreign States entered into force. The law aims to facilitate the adoption and introduction by the President and government of potential retaliatory measures against the US’s sanctions imposed on certain Russian companies and individuals in April and May 2018, as well as against further unfriendly acts (sanctions) of the US and other countries, including those which decided to pursue the US’s measures. Potential retaliatory measures could be of a political (eg, seizure of international cooperation) or economic nature (trade embargoes, limitations on trade in services, participation in the governmental contracts and privatisation etc), as well as other measures. The language of the new law grants wide discretion to the authorities in terms of qualifications of unfriendly acts and specific individuals, as well as legal or public entities targeted by potential retaliatory measures, and regarding the choice and extent of the countermeasures. At the same time, trade restrictions must not apply to imports into Russia of vital goods that are not produced domestically and to goods imported for personal use. The new law also obliges all individuals and organisations within the Russian jurisdiction to implement the above countermeasures strictly.

Applicable countries

29 What countries are currently the subject of sanctions or embargoes by your country?

The member states of the EAEU introduce and maintain sanctions and trade embargoes on the basis of the respective United Nations Security Council resolutions. However, the exact scope and conditions may vary from one member state to another. For that reason, there is no single source of information on trade embargoes or economic sanctions maintained in the EAEU by its member states. Individual measures are provided for in various governmental decrees, or resolutions of the member states.

In 2019, the EAEU member states maintained trade embargoes and sanctions adopted by the UN Security Council, including such countries as Afghanistan, Central African Republic, Democratic Republic of the Congo, Democratic People’s Republic of Korea, Guinea-Bissau, Iran, Libya, Mali, Somalia, South Sudan, Sudan, Yemen and various individuals and organisations (eg, ISIL and Al-Qaida) suspected of participation in terrorist networks or activities and residing in various third countries, including but not limited to the above (see question 30).

On 6 August 2014, Russia banned imports of certain agricultural products, raw materials and foodstuffs from the US, the EU, Canada, Australia, Norway, Ukraine (effective from 1 January 2016), Albania, Montenegro, Iceland and Liechtenstein in response to the economic sanctions in connection with events in Ukraine in 2014. The list of banned imports covers all kinds of meat and meat products (including sausages and similar products, and offal, fish and other seafood), milk and dairy products (cheeses, cottage cheese etc), vegetables, fruits and nuts, but excluding Atlantic salmon and trout juveniles, lactose-free milk, seed potatoes and onion, hybrid sweetcorn and seed peas, food supplements, vitamin mineral complexes, food flavourings or additives and protein concentrates. Baby food was explicitly excluded from the above prohibitions. Initially, the measures were imposed for a one-year period subject to prolongation or amendments in scope. On 27 May 2016, the Russian government relaxed import restrictions on beef, poultry meat and vegetables intended for the production of baby food in Russia. By June 2019, Russia had not introduced new countersanctions or trade embargoes against the EU or changed the existing ones.

In addition, in response to the incident with a Russian military aircraft on 24 November 2015, Russia introduced a package of economic sanctions against Turkey taking full effect as of 1 January 2016. Most of the restrictive measures were lifted in 2017 and 2018.

Other EAEU member states did not join the restrictive measures imposed by Russia. Although EAEU members formally respect and comply with the above Russian restrictions, there are numerous media reports on circumvention cases.

Specific individuals and companies

30 Are individuals or specific companies subject to financial sanctions?

Individuals, specific organisations and companies are already subject to financial sanctions by the member states of the EAEU. The measures applied to individuals and entities include freezing financial and economic assets.

Sanctions against persons and entities take place at the national level. The authorities of each member state maintain and publish lists of organisations and persons, in particular those suspected of terrorist activities (eg, Russia’s FSTEC website and Decision of the Council of Ministers of the Republic of Belarus No. 336 of 11 March 2006). The national authorities of EAEU member states regularly exchange information relating to sanctioned persons and entities.

The names of newly affected legal entities and individuals subject to financial sanctions are as a rule annexed to the national legal act of the member state implementing new sanctions.

According to the Russian Federal Law 272-FZ of 28 December 2012 on Measures Impacting Individuals Involved in Violations of Fundamental Human Rights and Freedoms and of Rights and Freedoms of Citizens of the Russian Federation, the Russian authorities can prohibit entry and seize the property and assets of listed foreign individuals considered to have been involved in violations of fundamental rights and freedoms and in offences against Russian citizens. This federal law is widely seen as a retaliatory measure by Russia against legislation in the US known as the Sergei Magnitsky Rule of Law Accountability Act of 2012, which imposes individual sanctions on persons involved in violations of human rights and the rule of law in Russia. Some individuals subject to sanctions under Federal Law 272-FZ of 28 December 2012 are listed at www.mid.ru/ru/maps/us/-/asset_publisher/unVXBbj4Z6e8/content/id/2047929. In March 2014, nine officials from the US and 13 Canadian officials became subject to a ban on entering Russia in response to the sanctions against Russia related to the crisis in Ukraine.

These lists are subject to continuous amendments for the purpose of expansion or annulment at any time without prior notice.

Other trade remedies and controls

31 Describe any trade remedy measures, import or export controls not covered above that are particular to your jurisdiction.

Traditionally, the EAEU member states have relied on export taxes or export duties, mostly on raw materials and hydrocarbons. The rationale for export taxes has been to secure significant income for national budgets as well as to redistribute income from large businesses to the state and eventually to contribute to more equal distribution of the nations’ wealth from natural endowments. Export taxes may also potentially affect precious metals and minerals and rare earths; however, this area is now regulated by WTO rules and commitments – at least as far as the largest member state, Russia, is concerned.

Member states also have recourse to non-tariff measures on imports and exports of goods (see question 20).

In addition, the EEC maintains a list of strategic goods that can be subject to temporary export restrictions in case of shortages and other critical situations (see Decision of the Commission of the Customs Union of 27 January 2010 No. 168, and notably its Annex 1, as amended).

Unilateral measures by the member states of the EAEU restricting imports or exports of goods from their national territories remain exceptional, but are still possible. In particular, Russia’s import ban of 6 August 2014 (see question 29) on certain food products from the US, the EU and other countries can be regarded as a unilateral measure. If the latter jurisdictions continue to prolong and intensify economic sanctions affecting Russia in the future, new Russian unilateral measures should not be excluded.

Additional tariffs imposed on imports of a wide range of steel and aluminium products by the US, allegedly on national security grounds, in January 2018 could ignite and escalate many trade conflicts around the globe. The consequences of the above and further potential unilateral protectionist actions on the world trade are difficult to predict. However, it is certain that they may significantly change the trade regimes of many countries and territories in the near future.

Update and trends

Key developments

32 Are there any emerging trends or hot topics in trade and customs law and policy in your jurisdiction?

In recent years, Russia and other EAEU member states have followed a moderate external trade policy while trying to focus on import substitution and internal market protection. In the meantime, Russia has effectively defended its rights in the notable WTO dispute with Ukraine on Measures Concerning Traffic in Transit invoking the national security provisions under the GATT 1994. On the other hand, Russia continues to face criticism from the US and EU on many restrictive market access measures and industrial subsidisation policies. In future, we expect further involvement of other EAEU member states in WTO affairs.


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