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Dana Zhunusova about the work in the sphere of economic integration processes

13 June 2017
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Deputy Chairman of the Board of the National Chamber of Entrepreneurs of RK "Atameken" Dana Zhunusova told about the work of the Chamber on issues of protection of interests of domestic business and interaction with the countries of the EAEU.

- What part does Atameken take in the development of integration processes?

- I would like to note that the Chamber was at the origin of integration cooperation in the modern understanding of the EAEU and actively participated in the development of the Treaty on the Eurasian Union. At the same time, it is necessary to understand that the Treaty itself is a framework and the main work on the implementation of the principles defined by the Heads of the EAEU member states is currently being carried out by five countries. NCE's mission is to protect and represent the interests of domestic business, in this connection, the staff of the integration block participates and successfully delivers the position of the business community of the Republic of Kazakhstan at all consultative and advisory sites of the Union. One of the areas of work is the formation of the legal framework of the Union, by adopting a significant number of regulatory documents. Only in 2016, the Commission adopted about 640 RLAs in all areas of cooperation, of which about 80% directly affect the conditions of doing business. It should be noted that all documents received in the Union for the purpose of assessing the consequences in the case of their entry into force arrive to "Atameken" for approval. In 2016, the integration department of the Chamber received about 2300 documents and about 1500 during the first half of the current year for consideration. The work of the Chamber in the consideration of documents is largely based on analysis of how a particular RLA of the Union can potentially affect domestic industry entrepreneurs, identify all the pros and cons with the maximum digitization and specification of data, and only after starts the stage of direct protection of the interests of Kazakhstani Business. This approach to work is based on a sober pragmatism over subjective blurriness. Along with this, both on the issues of protection of interests, and on the problematic issues of domestic entrepreneurs there is a well-established practice of operative targeted communication with business entities.

- Tell us about the work done by the National Chamber within the frames of the protection of entrepreneurs?

- To date, a great deal of work has been done to protect the interests of domestic entrepreneurs within the Union in such areas as industrial cooperation, agriculture, pharmaceuticals and medical products in the EAEU, a pilot project on labeling fur products in the Union, traceability of products and much more . In addition to the fact that NCE considers the documents in the course of work on the drafts, the members of the Chamber are also members of the Working Group on the assessment of the regulatory impact of draft decisions under the Eurasian Commission. At these meetings last year, 44 projects were considered for the preparation of RIA, of them 7 documents passed RIA, these were issues of technical regulation. At the same time, in 2016 the General markets of medicines and medical products were launched, which was preceded by painstaking and long preparatory work at various levels, with various organizations, and the development of a position in which NCE was directly involved. The decision on financing of cooperation projects by the Eurasian Development Bank was signed, criteria of projects were determined. Realizing the importance of this tool, the Business Council of the EAEU, created on the initiative of the Chairman of the Presidium of NCE RK Timur Kulibayev, proposed signing of a Memorandum of Cooperation between the EDB and the Business Council within the planned Astana Economic Forum. The document to be signed will create additional conditions for domestic business within the framework of developing industrial cooperation through the implementation of cooperation projects within the framework of the EAEU. I will add that at the final stage there are negotiations with Iran on the creation of a free trade zone that opens domestic entrepreneurs access to the market of the Iranian Republic. Particular attention is paid to combating contraband products in order to protect the interests of fair business and create equal conditions for competition. Under the prism of the need to create competitive conditions and provide access to the markets of the EAEU states, work is underway to identify and remove the barriers that our business faces when entering the markets of the EAEU countries. Barriers and obstacles, with which address business representatives, are usually divided into problems that require a minute-by-minute solution, and systemic ones that are not solved for years. With a view to more effective communication of problematic issues to the Government of the Republic of Kazakhstan or the Eurasian Commission, NCE always tries to calculate the losses of entrepreneurs from the obstacles encountered in mutual trade or to forecast the lost profit, in the absence of the possibility of full-fledged work.

- Dana Beysenovna, if we talk about barriers and achievements, could you briefly highlight the results and work in the context of directions?

- Yes, it is worth highlighting several areas. For example, with regard to the agro-industrial complex, unfortunately, in the agricultural sector, the preliminary notification points for the controlled products established by the Russian Federation were a barrier. I will not dwell on it in detail, since repeatedly NCE has spoken on this issue. I would like to note that the Chamber has elaborated this barrier in detail and brought it to the attention of the Governments of Kazakhstan and Russia. The problem was the lack of a legal basis and the need to regulate the established notification points. In this regard, our businessmen did not have an understanding of the mechanisms of interaction with the authorized bodies of the Russian Federation. Currently, negotiations are under way with the Russian side and I think that in the near future this problematic issue will be removed from the agenda. Another achievement of NCE in this area was the removal of restrictions imposed by the Kyrgyz side on the importation of Kazakhstani poultry products in November 2016. The restrictions imposed by the Kyrgyz side caused substantial material damage to the Kazakhstani poultry business: losses accounted for about a third of the total volume of exports of edible eggs, that is, about 45-50 million pieces or 1.5-2 billion tenge. As a result of the joint work carried out by the Ministry of Agriculture of the Republic of Kazakhstan and NCE, restrictions on the importation of Kazakh poultry meat and poultry products from the Kyrgyz Republic were abolished on 27th of March 2017, by the relevant Resolution of the State Inspectorate for Veterinary and Phytosanitary Security under the Government of the Kyrgyz Republic. Also, in 2016, a number of relevant decisions of the Council of the EEC have been adopted, completing the work on harmonization of requirements and rules in the sphere of phytosanitary quarantine safety of the Member States of the Union. This will provide domestic entrepreneurs with the transport of regulated goods across the territory of the EAEU member states on the basis of a single document, which, in turn, greatly simplifies the documentary support. In the industrial sphere, the question of the possibility of participation of Kazakhstani enterprises in Russian import substitution programs in industry was actively studied last year. NCE RK "Atameken" in conjunction with the authorized body - the Ministry of Investment and Development of the Republic of Kazakhstan conducted the analysis of the potential of Kazakhstani enterprises of the industry and the relevant proposals were forwarded to the Commission. At the same time, the integration bloc took an active part in the painstaking work on drafting and agreeing on the draft Agreement on the Procedure for the Voluntary Coordination of Specific Subsidies for Industrial Goods by the Member States of the Eurasian Economic Union with the EE and the conduct of proceedings by the Commission. This document is intended to act as a kind of "shield" for a conscientious business in the field of industry. The enterprise, upon receipt of state subsidies, having secured the approval of the Commission, will have "immunity" from the application of compensatory measures on the complaint of any of the countries of the Union. Also, in December last year, the heads of the EAEU member states adopted the concept "On the establishment of a Eurasian network of industrial cooperation and subcontracting". I want to note that the purpose of creating a Eurasian subcontracting network is to realize the potential of effective and mutually beneficial cooperation between member states to ensure the acceleration and sustainability of industrial development, enhance the competitiveness and innovation activity of industry in member countries. Implementation of the agreement at the highest level will be based, inter alia, on a single register of industrial enterprises (contractors and subcontractors) formed from national parts. In addition, the establishment of the Common Oil and Gas Markets in 2025 and the General Energy Market in 2019 is planned within EAEU. These directions are also currently being worked out, in order to timely prevent any difficulties and barriers for the Kazakh business in the future, at the time of launching common markets. Since January 1, 2016, it has been planned to launch common markets for medicines and medical products of the Union in the sphere of pharmaceuticals. However, the course of work in this direction was unexpectedly complicated by the additional draft document, which has been initiated by the Russian side providing for a procedure for determining the interchangeability of medicines in accordance with the national legislation of this Member State. Under the interchangeability of medicines, according to Russian legislation, is understood the possibility of using the analogue of one drug instead of another, which are identical in a number of parameters, such as the equivalence of the qualitative and quantitative characteristics of pharmaceutical substances, the equivalence of the dosage form, and so on. Understanding the importance of the market of medicines in the procurement for Kazakhstani producers, NCE together with the Ministry of Health upheld the position on non-distribution of interchangeability for drug registration procedures, as well as for the commercial segment of the market. Currently, work is continuing to improve the regulatory framework of this area, the development and adoption of RLAs of subsequent levels. The common market creates common rules for the circulation of medicines and medical products, which will greatly facilitate the access of domestic producers to the markets of the EAEU countries. In the transport sector, one of the most painful issues is perhaps the issue of transit through the territory of the Russian Federation. This problem has not been solved for more than two years, preventing the free movement of goods through the territory of the Union. We have repeatedly raised this issue at all levels of state and supranational governance. At the initiative of the Chamber, in the course of the second meeting of the Presidium of the Business Council of the EAEU, held in May 2015 in Astana, the leaders of the five business communities of the countries of the Union, sent a letter to the members of the Council of EEC on the need to address the transit issue. Based on the results of the work carried out, at present a document, providing for the need to notify and conduct consultations when introducing special economic measures, has been submitted for approval and is pending. This norm, which was upheld by the Chamber, will minimize the risk of transit restriction, as well as conduct preliminary negotiations with the aim of determining the order and conditions for the movement of goods banned from being imported into one of the member states of the EAEU. Out of the obstacles in the transport sector, it is worth noting the delay in the process of signing the Rules for non-discriminatory access to the services of the ports of the Russian Federation and the Agreement on Navigation. These barriers remain unresolved for three years already and cause significant damage to the ability to conduct competitive business in the Union. The Chamber repeatedly initiated consideration of these issues on the sites of both the state bodies of the Republic of Kazakhstan and the Commission. Work in this direction is conducted and by the end of this year we expect to exclude these issues from our list of barriers. As for EAEU Business Council, one of the achievements of the work was the restructuring of the governing body, of the business dialogue by introducing Khristenko V.B. into the Presidium. At the same time, the implementation of the fundamental principle in the form of consolidated business position on problematic issues, barriers faced by entrepreneurs of member states remains. Within the framework of Kazakhstan's chairmanship, work has begun and has been successfully  implemented to improve the procedure of the Union's RIA, ensure transit, study of the issues of creating cooperative chains, and identify areas for developing cooperation with the PRC. In addition, this year the Committee for Digital Transformation was established within the framework of the EAEC Business Council, the main purpose of which was the coordination and consolidation of the business position in this direction. In addition, this year the Committee for Digital Transformation was established within the framework of the EAEU Business Council, the main purpose of which was the coordination and consolidation of the business position in this direction. Let me remind you that the EAEU Business Council in a five-sided format was established in May 2015 on the initiative of NCE RK "Atameken. As you know, last year the Chamber in the person of Kulibayev Timur Askarovich was Chairman of the Presidium of the EAEU Business Council.

-Last year the Customs Code of the EAEU was adopted, what part did the integration bloc take in this work?

- The Integration Unit of Atameken took the most direct and active part, both in the development and in the coordination of such an important document for the EAEU from the very beginning to its completion. The competence of the Chamber in presenting the opinion and position of domestic business has allowed to take into account the wishes of the business community and solve certain problematic issues in a certain way. As a result of the domestic agreement on the draft Agreement on the CC of EAEU, more than 2,000 proposals and comments were received from member states of the Customs Union. Out of the 552 amendments prepared by the Republic of Kazakhstan (the consolidated position of NCE and state bodies), about 70% have been adopted.

-What can you say about the sphere of technical regulation?

- In 2016, we turned out to be profitable for the adoption of the technical regulations of the EAEU - these are technical regulations for liquefied hydrocarbon gas, rides, mineral fertilizers, fish and fish products, as well as technical regulations restricting the use of hazardous substances in electrical and radio electronics products. For these types of products we remove technical barriers in mutual trade, we will have a common market and the operation of a single certificate of conformity. In 2016, we also adopted a new procedure for the development of technical regulations of the EAEU. It first established the procedure of RIA (Regulatory Impact Assessments) for technical regulations. The procedure became even more "friendly" for business - the participation of business circles is possible at almost every stage of development and adoption. In addition, a new procedure was adopted to formulate lists of standards for the technical regulations of the Union, which, at the suggestion of the Kazakh Party, was supplemented by the requirement to include in the lists of standards only interstate standards adopted in all the EAEU member states. This will avoid the inclusion of "acceptable" standards only for one Party, and create equal conditions. At the same time, in 2016 the following draft Agreements have been developed, which are currently at the stage of "high readiness": - to remove technical barriers in mutual trade with third countries "; - on harmonization of state control (supervision) over compliance with the requirements of technical regulations; - on the safety of products, the requirements for which are not established by technical regulations. The adoption of these agreements will allow harmonizing the procedures for confirming compliance with states that are not members of EAEU, monitoring the products, and establishing general principles of security. At the end of the interview, Dana Zhunusova noted: "In any case, it is necessary to understand that the specifics of integration economic processes on an international scale is a long-term project that is characterized by the duration and multi-stage achievement of specific objectives, accordingly, in general, work can be carried out for several years, and a concrete result will be achieved at the beginning of next year, with the joint efforts of the Parties taking into account the corresponding economic pragmatism". 

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