What is the Eurasian Economic Union?

_ Eurasian Economic Commission. Eurasian economic integration: facts and figures. Moscow, 2015.

Creating an economic integrative association, a Eurasian Economic Union (EAEU), is summoned to protect the economic interests of the association in general and all its participants in particular.

At the session of the Supreme Eurasian Economic Council held on May 29, 2014 in Astana, a Treaty on the Eurasian Economic Union (EAEU) that will start its operation on January 1, 2015 was signed. The document of almost 1000 pages in volume consists of four parts including 28 sections, 118 clauses and 32 addenda. At the preparatory stage of this Treaty a work to systematize international treaties concluded within the CU and CES had been held, i.e. discrepancies were excluded, the existing norms were optimized and updated, the gaps were filled and a common set of definitions was comprised. The Treaty was set to include norms and rules of EurAsEC in line with the goals and tasks of the Union to ensure the free movement of goods, services, capital and labour and yet provisions of the CU and CES legal and contractual basis brought to compliance with the WTO rules and norms.

treaties) of the Customs Union and Common Economic Space has been the basis of the Treaty on the EAEU which was also supplemented with new subjects on “constructing” the integration. The discussion to agree upon the most sensitive issues was tense but the Commission in mutual effort with the partners from the Member States was confident and diligent in pursuit to achieve the goal set by the Presidents.

The Treaty within the framework of its capacities ensures free movement of goods, services, capital and labour, as well as coordinated, coherent and unified policies in the economic sectors as specified therein and in international agreements within the Union.

The Eurasian Economic Union was founded on the principles of international law which, among others, include a principle of sovereign equality of the member states, respect to the specifics of the political set-up of the members to the association, ensuring the mutual benefit in the cooperation, observing the market economy principles and its functioning (as a rule) without exemptions and restrictions.

The Union shall be an international organisation of regional economic integration and shall have international legal personality. Earlier, the Customs Union and the Common Economic Space used to function within the institutional structure of the Eurasian Economic Community (EurAsEC). Therefore, the EAEU becomes a meaningful element in a global economic architecture. The Treaty determines that the EAEU shall be entitled to perform, within its jurisdiction, international activity aimed at solving problems encountered by the Union. As part of this activity, the Union shall have the right to engage in international cooperation with states, international organisations, and international integration associations and, independently or jointly, with the Member States as well as to conclude international treaties therewith on any issues within its jurisdiction.

Norms balancing the provisions of the Treaty and other international agreements, on registering the Treaty in the Secretariat of the UN, the provisions on accession to the Union and withdrawal from it and yet provisions on the observers to the Union have been introduced.

From the point of increasing the level of transparency, balance and quality of the supranational regulation and developing the institutional measures to improve the business climate, it is extremely important for the new internal procedure of assessing the regulatory impact of draft decisions by the Eurasian Economic Commission that might affect the environment of entrepreneurial activity to be fixed in the Treaty.

The principle of “four freedoms” postulated in the Treaty as the basis of the domestic market operation has set forth the weaver from the national market protectionist measures in the mutual trade. Finalising the formation of the common market of goods, services, capital and labour is the target of the Eurasian integration at this stage that characterises deeper integration comparing with the previous stages — the Customs Union and Common Economic Space.

Therefore, by tense though positive and trusted discussions the Parties have defined what shall be the focus areas of further integration. For instance, by provisions of the Treaty on the Eurasian Economic Union, as of January 1, 2015, 29 discovered exemptions, barriers and restrictions mainly in the sphere of state procurement shall be eliminated. Besides, pursuant to provisions of the Treaty on the Eurasian Economic Union, 31 discovered exemptions in the spheres of industrial policy, and also sanitary, veterinary and sanitary and yet phytosanitary quarantine measures will be removed within certain transitional periods.

For a common market of services, the Treaty defines the legal framework which will be established in the Union. The important issue is to relief for the service provider from the repeated incorporation as a legal entity with an option to provide service based on the permit on providing the service issued on the territory of the Member State where the providing entity is registered and acknowledgement of the professional qualifications of the service provider’s staff. Among others, the conditions for the provision of the service by the service provider’s staff of one Member State to recipients of services on the territory of another Member State. The guarantees for the receivers of service are fixed in the Treaty.

Also, the leaders of Belarus, Kazakhstan and Russia have agreed to hold a coordinated energy policy and the formation of the common energy markets (electricity, gas, oil and petroleum products) on the basis of the general principles. The Treaty suggests that this task will be implemented in several phases and finalized by 2025: forming a common electricity market of the Union and access to the services of natural monopoly entities in the electric power sector is expected to be completed by 2019, and common markets of gas, oil and petroleum products — up to 2025.

The Treaty defines regulatory regime for medicinal drugs and medical devices circulation — as part of the EAEU by January 1, 2016 a common market of medicines and a common market of medical devices (medical devices and medical equipment) will be created. These are new spheres of integration and interaction of the Member States of the Eurasian Economic Union. In order to ensure the formation of common markets, a single registers of registered drugs and medical devices will be formed. Common markets of medicinal drugs and medical devices will operate on the basis of the decisions by the Commission establishing common rules for registration, rules for conducting research (tests), as well as other rules and requirements that govern the individual stages of the circulation of medicines and medical devices.

The Treaty defines the main priorities of transport policy on the territory of the Eurasian Economic Union in the long term. The parties agreed on stepwise liberalization of freight forwarding on the territory covered by the Union that primarily is pertaining to road and rail, air and water transport. The Member States will implement coordinated (agreed) transport policy aimed at ensuring economic integration, the formation of a common transport space

Also an agreement on the formation and implementation of an agreed agricultural policy was reached. Forecasting in the agricultural sector, state support for agriculture, regulation of common agricultural market, unified requirements in the production and circulation of products, the development of exports of agricultural products and foodstuffs, scientific and innovative development of the agroindustrial complex (AIC), AIC integrated information support are the main directions of the agreed (coordinated) agricultural policy. It is also important that the implementation of policies in other areas of integrative interaction, including in the field of ensuring sanitary, phytosanitary and veterinarysanitary measures for agricultural products, will be delivered in view of the goals, objectives and directions of coherent agricultural policy.

As for industrial policy, the Treaty substantially expands upon the legal framework of the Customs Union and the Common Economic Space, which used to regulate the questions of industrial subsidies only. Goals, objectives, principles and mechanisms of industrial cooperation in the Union were defined, whereas it was set forth that the development and implementation of policies in trade, customs and tariffs, competition in public procurement, technical regulations, business development, transport and infrastructure, and other areas will take into account the interests of industrial development of the Member States.

Effective functioning of the Eurasian Economic Union is impossible to be imagined without a coherent macroeconomic policy, which includes the development and implementation of joint actions of the Member States of the Union in order to achieve balanced economic development. Under the Treaty, the main directions of coordinated macroeconomic policy are the formation of uniform principles of functioning of the economy of the Member States of the Union and ensuring their effective cooperation and yet the development of common principles and guidelines for predicting the social and economic development of the Parties.

As part of the creation and dissemination of official statistical information in the Union the Treaty lays down the principles of its formation. In addition, it is provided for granting the Commission with such powers as the development and approval of the methodology of the formation of the Union of official statistical information compiled on the basis of official statistics of the Member States, as well as development in conjunction with the competent authorities of the Member States and the approval of the program of integration in the sphere of statistics.

The Treaty on the Union brings up to a new level such direction as cooperation of the Member States of the Union, in labour migration. In order to expand the scope of possible employment to the workers of the Member States the possibility of employment, not only in the employment contract, but also by civil contract will be provided. Also, no limitations established by the legislation of the Member States in order to protect the national labour market will apply.

To ensure a consistent regulation of financial markets at the end of turn-based harmonization of legislation, the EAEU Member States agreed to the inevitability of proceeding by 2025 onto the creation of a Single supranational authority to regulate financial markets.

In the sphere of taxes and taxation it provides that Member States of the Union define areas of cooperation between tax policy pertaining to harmonization and improvement of tax legislation, including a collection mechanism for indirect taxes in the performance of work, provision of services, the convergence of interest rates on the most sensitive excisable goods. Basis of the arrangements is in the principle of non-discrimination, which will allow avoiding unfair competition and dumping in mutual trade in goods and services.

As for the public procurement the Treaty keeping the provisions of the legal framework of the Customs Union and the Common Economic Space on granting the national treatment, clearly establishes that this treatment shall be provided to the Member States. Whereas, the Union will have the enhanced methods of executing procurement. The request for proposals, allowing you to select the best offer has been suggested, not only by the criterion of price, but also on other criteria, such as: period of work, quality of work (qualification of participants). In an open competition, it is possible to use twostage procedures of a preliminary selection.

For the first time, the Parties agreed to pursue an agreed policy in the sphere of consumer protection on the territory of the Union. Earlier, the CU and CES legal base did not include such provisions. The Treaty stipulates that this policy is aimed at creating equal conditions for the Member States’ citizens of protecting their interests from unfair activities of business entities operating within the Union. It has been determined that the citizens of the Member States of the Union, as well as other persons living on their territory, shall enjoy the same legal protection in the field of consumer protection on the territory of other Member States as the citizens of other Member States.

Apart from the content of industry, in the development of the Treaty the tasks of creating the institutional framework of the Eurasian Economic Union were present. The Treaty lays down the structure of permanent institutions of the Union. The main body of the Union is the Supreme Eurasian Economic Council (SEEC), which is composed of Heads of the Member States. SEEC sessions are held at least once a year. The Supreme Council determines the strategy, directions and prospects for the formation and development of the Union and makes decisions aimed at implementing the objectives of the Union; At least twice a year the Eurasian Intergovernmental Council (EIC) at the level of Heads of Government is summoned to consider, as proposed by the EEC Council, any issues for which no consensus was reached during decision-making in the Council session; As a permanent supranational regulatory body of the Eurasian Economic Union, the Eurasian Economic Commission continues its work. It consists of the Council of the Commission and the Board of the Commission. The judicial branch is represented by the Court of the Union.

Before the independent judicial body of the Union was created the disputes within the Customs Union were resolved in the Court of EurAsEC. The purpose of the Court of the Union will be to ensure the uniform application by the Member States of international treaties in the framework of agreements concluded with third parties, and decisions taken by the Union.

January 1, 2015 is the beginning of a new stage in the development of the Eurasian economic integration. Running a fully functioning Eurasian Economic Union means not only fixing the de facto deeper level of economic integration in the Eurasian space in comparison with the stages of the Customs Union and the Common Economic Space, but also the assertion of legitimate strategy for further development of integration.

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