Armenia not opposing joint customs posts on borders inside EAEU

Armenia does not oppose a proposal of Russian President Vladimir Putin to establish joint customs checkpoints for the countries of the Eurasian Economic Union (EAEU). Yerevan says establishing the posts within the EAEU is a strategic task that can be implemented in the near future.

Speaking about development processes in the EAEU at a big press conference on December 14 last year, the Russian president stated the importance of introducing electronic declaration of goods transported through the territory of the EAEU territory, as well as establishment of joint posts - customs checkpoints.

"We must introduce electronic declaration of goods moving through our territories, monitor their movement; this is extremely important and necessary. Joint posts ... some of my colleagues think that this is wrong. But I will try to convince them. There is nothing wrong with customs officers from Kazakhstan and Belarus appearing and working at our posts and ours appearing at theirs. This does not violate the principle of sovereignty; it simply makes the customs work transparent. It is necessary to introduce new technologies for moving goods across the border," the Russian president said.

It turns out that the mechanism of electronic declaration of goods is already functioning in Armenia. "In Armenia, the system of electronic declaration of goods currently operates within the Customs Code, and the priority of electronic declaration is clearly stipulated under the law adopted in early December last year "On the Customs Code of the Eurasian Economic Union". At the same time, in addition to declaring goods, the importance of implementing other customs functions in electronic form was approved," the Republic of Armenia State Revenue Committee informed EADaily in response to an official inquiry.

As for the electronic control of the goods transported through the territory of the EAEU, the department informed us that negotiations around the draft agreement on the mechanism for tracing goods within the framework of the EAEU are currently under way. "The aim of the draft agreement is to ensure unimpeded movement of goods throughout the entire territory of the EAEU," the committee said.

However, they were not able to clarify how they see results of a full-fledged introduction of electronic declaration and tracking of goods as well as the creation of joint posts. "As for the possible results or consequences, we inform you that at present such assessments cannot be given," the press office of the State Revenue Committee said.

Head of the National Center for the Study of Public Policy, economist Artak Manukyan considers Putin's proposals logical and understandable against the increasing cases of re-export of goods through some of the EAEU countries to Russia, where their importation is banned, as well as periodically arising acute trade conflicts between the countries of the union.

"Last year and the year before last, there were many cases when the problem of re-export of goods led to trade wars between the members of the EAEU. As a demarche, Belarus resumed the work of its customs checkpoints on the border with Russia, and at the end of last year a similar situation arose in the relations between Kazakhstan and Kyrgyzstan," Manukyan recalled. He noted that all these frictions are a consequence of the nontransparent work of the customs systems of individual countries of the Eurasian space. In this regard, Putin's proposal, in his view, demonstrates absence or low level of trust between Eurasian partners.

Here he also recalled the problem of re-export of the Turkish tomatoes banned in Russia until recently through the territory of Armenia. "After Russia applied counter-sanctions and banned the import of certain goods from the EU countries, Belarus immediately began to deliver such types of goods as parmesan and mozzarella or shrimps to Russia. And when Russia imposed sanctions against Turkey, the export of tomatoes from Armenia to Russia jumped dramatically. Clearly, this is re-export, because even with a strong desire, the country's manufacturing infrastructure cannot be restructured quickly enough to start producing large amounts of something that it did not produce or produced little before," he explained.

Rumors and suspicions about the possibility of re-export of Turkish tomatoes to Russia through the territory of Armenia arose after official statistics was made public showing a sharp increase in the volume of exports of Armenian agricultural goods to Russia. In 2016, the growth was about 70%, which caused some questions from specialists. The export of Armenian products grew due to such types of goods that Armenia imports. In the first nine months of 2016, compared with the same period in 2015, the export of tomatoes from Armenia to Russia increased 20 times, the export of cheese and cottage cheese increased 4.5 times, and caviar and fish 3 times.

However, the Armenian side did not limit itself to agricultural products alone. During the reporting period, according to official data, export of heating systems, air conditioner parts, remote control panels, and other household equipment increased 3.6 times. The latter is especially surprising given that there is virtually no production of household appliances in Armenia.

Disruptions in Russia’s sugar market started last year. According to experts, the situation was caused by the actions of Kazakhstan and Belarus, importing raw materials duty-free for their production. The issue was also discussed at a meeting of the Eurasian intergovernmental council in Yerevan on October 25 last year. In mid-September 2017, Agriculture Minister of Russia Alexander Tkachev said that the Russian sugar industry suffers losses of tens of billions of rubles from the actions of Belarus and Kazakhstan, which import duty-free raw sugar for further processing and compete unfairly in the Russian finished goods market.

In the current situation, as Artak Manukyan points out, Russia is the loudest in stressing the need to introduce electronic control mechanisms for the import of goods and the creation of joint posts, since its economy suffers the most.

"Russia is the most capacious and solvent market in the EAEU. In response to Western sanctions, it imposed restrictive measures on certain countries, this opened up the possibility of ‘moonlighting transport’ for some of the member states of the EAEU. They have become channels for import and re-export of the same products to the Russian market. In this regard, Putin's proposals are quite logical and understandable, but the situation as a whole shows the absence or minimum level of confidence within the union," concluded Manukyan. He suggested that, most likely, the countries that oppose the introduction of these mechanisms use their absence in their own economic interests.

Arshaluys Mghdesyan