The internal approval of the draft Customs Code of the EAEU has started

On 12^th of August in Sochi heads of the governments of the Member States of the Eurasian Economic Union approved the draft Customs Code of the EAEU and it was submitted for internal approval of each state. Signing of the document is planned at the meeting of the Supreme Eurasian Economic Council in December 2016 by the Presidents of the five states.

Preparation of a draft Customs Code of the EAEU took more than 2.5 years. Representatives of public authorities and business of the Eurasian Economic Union took part in its development and more than 1,500 proposals from Member States were introduced in it.

About 20 existing international agreements, regulating customs relations in the EAEC, were included in the new Customs Code, as well as projects of international agreements that affect this area.

In the implementation of Article 32 of the Treaty on the Eurasian Economic Union, which provides a single customs regulation in the Union, a significant segment of the powers transferred to the supranational level, to which Kazakhstan objected in the process of negotiation.

Thus, the Kazakh business together with public authorities has developed about 552 amendments, of which about 65% were observed in the draft Code.

The main novels of the Customs Code of the EAEU are:

• Priority of electronic (paperless) declaration;

• Automatic release of the goods, if the profile of the risk management system didn’t hit (RMS);

• submission of the customs declaration without presentation to the customs authorities of documents, based on which the declaration was filled in, and their presentation only if RMS hit the risk profile;

• use of a single window mechanism;

• expansion of the production capabilities to supply;

• the list of special simplifications, provided to an authorized economic operator, was significantly expanded;

• a shift from the phase of the customs control to the post clearance control;

• the mechanism of provision of delays was reviewed.

Thus, the new Code "should" allow to reduce the time of customs clearance, reduce administrative barriers, introduce advanced information technologies, to reduce corruption component, and finally, to promote the growth of trade, which will increase the flow of payments in the budget.

However, according to the National Chamber and the business of the five states, the new Customs Code is written in such a difficult for a common understanding and interpretation language that customs officers will be able to understand in detail all its intricacies only after several years of its practical application.

Serious risks to business associated with the new document, is detailed presentation of the procedures, in contrast to the EU framework of the Customs Code, "inflexible" and complicated procedure for amending it.

Involvement of experts from the business community to the development of the draft Code has played a positive role, but, alas, did not ensure the balance of government agencies and business interests. According to the National Chamber, the Customs Code of the EAEU, represented as an effective tool for trade facilitation will result in stricter liability for business, worsening its already beleaguered position.

Heads of governments of member states of the Eurasian Economic Union are designated to complete the process of internal harmonization of the draft Customs Code of the EAEU until 20^th of  September of the current year, in connection with which the National Chamber encourages the business community to take an active part in the coordination of the main customs document.

Their comments and suggestions can be sent until 31^st of August of the current year to the Department of Customs Administration of the National Chamber to the email address e.karimova@palata.kz.

Discussion of the draft Code within the frames of the internal coordination has started at the site of the National Chamber on 17^th of August this year under the chairmanship of Deputy Chairman Dana Zhunusova.

During the meeting were discussed the conceptual differences between the ideas of the parties on the draft Customs Code of the EAEU with participation of government representatives, members of special economic zones, free warehouses and businesses.

We have considered the Russian proposal, providing for exclusion of the competence on the establishment of rules of origin of the exported goods of the national legislation.

Due to the absence in the Treaty on the Eurasian Economic Union of provisions on the harmonization of rules of origin of goods exported outside the Union, as well as a substantial burden and risks for entrepreneurs in case of introduction of such a rule, the Kazakh business unanimously supported the proposal of the National Chamber on maintaining within the competence of national legislation the provision on establishment of rules of origin of the exported goods.

They also discussed the proposal of the Republic of Belarus and the Russian Federation, which limits the possibility of co-payment of customs duties in respect of goods produced in the Republic of Kazakhstan on WTO rates, with a view to free circulation of goods throughout the territory of the EAEU only to cases where it is expressly provided by the rules of international treaties.

The National Chamber proposed to establish that the additional payment of customs duties is always possible, except when it is forbidden by international treaty.

Following the discussion, the Kazakh business unanimously supported the proposal of the National Chamber on extra payment of customs duties.

However, within the discussion on the proposal of the National Chamber of the exclusion from the draft Customs Code of the EAEU of common criteria for sufficient processing of goods, there was reached an understanding of the binding uniform criteria to customs benefits that expire on 1^st of January 2017.

Participants of the event supported the offer of the National Chamber of Entrepreneurs of Kazakhstan "Atameken".

On Order EMPS can be found here.

The draft Customs Code of the EAEU can be found here.