Eurasian Integration Yearbook 2012

2011: Data and Reviewsthe customs border. The ratios for redistributing import duties between the CUstates may be adjusted in favour of Belarus and Kazakhstan. Problems withVAT calculations (because the rates of this tax differ), the absence of unifiedtechnical regulations and different customs requirements specified in CUmember-state legislation, are all added burdens for entrepreneurs. Moreover,concerns have been raised over the rate at which Russian businesses are movinginto Kazakhstan to take advantage of lower taxes.In April 2011 the government of Kyrgyzstan approved the country’s accessionto the CU and the Single Economic Space of Belarus, Kazakhstan and Russia.Tajikistan also intends to join the CU. Discussions are continuing in Ukraineabout the potential benefits for the country of joining the CU.The Single Economic Space has become an economic reality. The Presidents ofRussia, Kazakhstan and Belarus signed the Declaration on Eurasian EconomicIntegration, the Agreement establishing the Eurasian Economic Commission(EEC, the Customs Union’s supreme body) and its procedural rules, and theAgreement on the Single Economic Space. Thanks to this preparatory work in2011, on January 1, 2012, the SES between Russia, Kazakhstan and Belaruswill start functioning, replacing the CU. The systematisation of its legalframework is now a priority, with the codification of documents being thefirst step towards this goal. To date, there are 104 documents, which togetherconstitute the unified regulations of the CU and the SES; some of these weresigned in the mid-1990s. The parties have decided to amalgamate them intoa single document similar to the Treaty of Rome. Should Russia, Belarus andKazakhstan succeed in harmonising their legislation by 2015, the countrieswill unite in the Eurasian Economic Union.Russia’s accession to the WTO has been a matter of extreme importance, notonly in the last year. Russia now faces a large-scale revision of its protectionistforeign trade practices and a struggle against barriers to Russian exports. Inaddition, around one-third of the tariff rates introduced under the RussianFederation’s WTO commitments are higher than those applied within the CU,so Russia, Kazakhstan and Belarus will have to decide what rates should beapplied.Last year Belarus faced the official devaluation of its national currency. The oneoffdevaluation of the Belarusian rouble on May 24, 2011 reduced the value ofthe currency by 53%, or by over 70% compared to its quoted value in January2011. The sharp devaluation of the currency led to an economic recession inthe country, accompanied by, inter alia, a temporary suspension of electricitysupplies to Belarus from Russia and Ukraine. A loan agreement with the EurAsECAnti-Crisis Fund (ACF) has mitigated tension in the Belarusian foreign exchangemarket. In mid-June, the Eurasian Development Bank transferred to Belarusthe first $800 million tranche of the $3 billion loan from the EurAsEC Anti-CrisisFund.230 EDB Eurasian Integration Yearbook 2012