There is a hot discussion of the problem regarding the export of Kazakh food products to the Russian Federation. Kazakhstani dairy producers made statements to the media. The essence of the question is the lengthy processing of shipping documents. Chairman of the Board of the Atameken National Chamber of Entrepreneurs Ablay Myrzakhmetov spoke about the reasons for the occurrence of this problem and called on the state authorities to resolve this issue.

- Ablay Isabekovich, tell us, what are the problems of the dairy farmers?

- Restrictions on Kazakh goods have not begun today. This story dates back to 2015 when Kazakhstan joined the World Trade Organisation. Remind that when Kazakhstan joined the WTO, it reduced duties on more than 4,000 goods. This means that regardless of the EAEU membership and the Union's general customs and tariff policy, Kazakhstan undertakes to provide customs clearance of these goods at lower rates.

For example:

Kazakhstan's rate on WTO commitments is 12% for cars (The commodity nomenclature of foreign trade code #8702), and 20% for EAEU CTT, canned fish (code 1604) can be imported into Kazakhstan at 6%, and for the EAEU at 12%, flat-rolled fish (code 7212) in Kazakhstan at 0%, and for СTT at 5%. As you can see, the difference between the rates is significant.

At the same time, we are not entitled to raise the taxes on these items to the level of the CTT EAEU until 2023. This situation caused concern on the part of the Union's partners because the absence of customs borders could lead to the flow of cheap goods from Kazakhstan to other EAEU countries. We understand their concerns. To resolve this situation, in 2015, Kazakhstan committed to preventing the export of goods that enter Kazakhstan on reduced duties.

Kazakhstan signed a Protocol according to which the state revenue authorities assumed several obligations:

• do not allow the export from Kazakhstan to other EAEU countries of goods that were imported at WTO rates;
• confirm the right to export goods from this list and those exported to the countries of the Union.

Now Kazakhstan's business has two options: 1) It is possible to import goods into Kazakhstan at reduced rates, but it is necessary to use this commodity only on the territory of Kazakhstan, it is prohibited to re-export these goods; 2) if an entrepreneur imports goods, which will be subsequently sold in other EAEU countries, it is necessary to import them at the rates of the CTT and fulfill a number of obligations (to keep the customs declaration for all transactions and issue an e-invoice). 

- How does this scheme work now?

It should be understood that, on the one hand, Kazakhstan had to fulfill its obligations to the WTO, and, on the other hand, it had to eliminate risks to its partners in the Union and prevent the export of "cheap" goods to other EAEU member states.

To solve this problem, the Ministry of Finance created the Electronic Invoice Information System (ESF IS), which was to ensure full traceability of goods imported into the Republic of Kazakhstan on reduced customs duties. And here we raised a reasonable question: how to identify goods that were produced in Kazakhstan, but at the same time, included in the list of exceptions? Or what about the goods of other member states of the Union, which, for example, were imported into Kazakhstan from Russia and exported to Kyrgyzstan? Initially, the EAEU customs services wanted to control imported goods, but no one thought about how to separate them.

Joint efforts have been made to develop and approve the procedure for exporting these goods, which provides for all possible options: goods produced in Kazakhstan, goods of the Union, and imported goods imported at the rates of the EAEU CTT.

But even the decision was not perfect for business. Taking into account that the ESF IS was not functioning in full at that time, representatives of the customs authorities of the EAEU countries insisted on the mandatory certification of each batch of goods included in the List of Exceptions and exported from Kazakhstan to the EAEU, by the seal of the State Revenue Department of the Ministry of Finance of the Republic of Kazakhstan. This meant that, in the end, the entrepreneur would still have to visit the state revenue authorities to get a seal.

This is the main problem. Such a procedure significantly slows down and complicates the export procedure for entrepreneurs. Today, the entrepreneur is tied to the regime of the state revenue bodies, to the working regime of the heads of these bodies. Often, entrepreneurs are forced to wait until the head of the State Revenue Department returns from the meeting, and is free to sign and seal the ESF.

Thus, the domestic producer lost twice as much. First of all, the goods that they produce are imported to the market at a lower rate; secondly, they cannot export to the most important EAEU market without the official's signature.

- Is this problem being solved? What way?

Please note that initially, when additional requirements for the export of goods from the Exemption List were approved in 2016, the business agreed to the new conditions only because these requirements were temporary. The decision of the Eurasian Intergovernmental Council says: "The certification of the paper copy of the ESP is valid until the decision of the Eurasian Intergovernmental Council, which cancels the certification procedure. However, as you can see, for 3.5 years the "temporary" order has not been canceled and the business has been forced to certify the ESF for each batch of goods over and over again.     

To date, the Atameken National Chamber for the second time raised the issue of the need to cancel the certification of paper copies of the ESF. How to achieve this? It is necessary to ensure recognition of the Kazakhstani system of the ESF by other EAEU member states and establish an automated exchange of data from the ESF between the customs authorities of the Union. As soon as these parameters are achieved, there will be no need to put a seal on the paper copy of the ESF. This means that the entrepreneur, having received all the supporting documents for the goods and having printed out the ESF, can immediately export the goods.

After the indignation of dairy farmers in the media, our authorized state bodies actively engaged in the process of solving the problem, which has arisen long ago.

Another Roadmap to simplify export procedures has been developed. Once again, we see that the officials have a desire to shift the responsibility on the shoulders of business. According to the government, the solution to all problems in the export of Kazakh goods should be the integration of information systems for issuing certificates CT-1 and ESF IS. However, the integration, which, I must say, the Chamber does not refuse, will not cancel the main thing - the need to assure the ESF for each batch of goods. As long as there is a human factor, and the certification is done by people who have a working regime, weekends and holidays, the business will always be dependent on the state authorities.

I would like to note that Atameken has automated the CT-1 certificate issuance system in the interests of business. The system gives several advantages and conveniences for entrepreneurs:

- Reducing the load on business entities: feedback from the system via personal account and e-mail (notifications, reminders), convenience and ease of use of the system;

- Transparency: tracking the status of the application and its execution online with the ability to control all stages;

- Process automation and information security: recording of all actions in the system (chronology of events);

- Application of risk management system (RMS) and format-logic control (FLC) to avoid erroneous data entry.

Atameken, as the legal representative of Kazakh business, is primarily interested in simplifying export procedures. We realize that this can only be achieved by cancelling the assurance of the ESF in the government revenue bodies. I will say more, Kazakhstani goods, which are included in the List of Exceptions, have high export potential. Over the past three years (2016-2018), despite all the barriers and restrictions, we have managed to increase exports to the EAEU for such goods as pasta, cucumbers and gherkins, fermented milk products, tomatoes, poultry, etc.

Thus, the business confirms its readiness to enter the EAEU market and supply competitive Kazakh products. The task of the state bodies is to create appropriate conditions for them and remove restrictions on exports of goods to the EAEU.