Two countries – one economy, In what areas did Russia and Belarus agree to integrate?

The negotiation marathon on the integration of Russia and Belarus ended with the signing of 28 union programs in Minsk. They, as noted in the governments of the two countries, cover the “main directions of union construction.” In what areas the parties agreed to go for maximum rapprochement – in the review by Kommersant.

What happened

Today in Minsk at a meeting of the Council of Ministers of the Union State of Russia and Belarus, Russian and Belarusian Prime Ministers Mikhail Mishustin and Roman Golovchenko signed 28 so-called union programs and “Main directions of implementation of the provisions of the Treaty on the creation of the Union State for 2021-2023.”

The union programs themselves are a voluminous document in which it is detailed in what areas and in what time frame the parties will bring together, harmonize, unify and integrate their legislation, systems and approaches.

The areas covered by the signed programs are listed in the joint statement of the heads of the governments of the Russian Federation and Belarus. It notes that the document is aimed “at the implementation of large-scale tasks to strengthen Russian-Belarusian integration.”

Finance

The first program concerns the convergence of macroeconomic policies. In this part, “an agreement was reached on the synchronization of strategic management in terms of macroeconomic policy and the formation of official statistical information.”

The second program is dedicated to the harmonization of monetary policy and macroprudential regulation. Until December 2022, the Central Bank of the Russian Federation and the National Bank of Belarus will conclude an agreement on the principles and mechanisms of harmonization.

The third program is the harmonization of foreign exchange regulation and foreign exchange control. The rules for opening bank accounts by residents in non-resident banks, conducting foreign exchange transactions and requirements for the repatriation of foreign exchange earnings will be harmonized.

The fourth program talks about the harmonization of information security requirements in the financial sector. In the fifth – on the harmonization of the regulation of credit and non-credit financial organizations, the financial market as a whole, including the creation of unified principles of deposit insurance. The sixth program fixes an agreement to harmonize requirements in the field of combating money laundering and financial terrorism: the Russian Central Bank and the Belarusian National Bank agreed on joint measures in this regard and on the harmonization of legislation.

In the seventh program, it is written about the integration of national payment systems, systems for the transmission of financial messages and settlements, a system of fast payments.
Closing the financial block is the eighth program, which talks about harmonizing requirements “in the field of protecting the rights of consumers of financial services and investors, as well as preventing unfair practices in the financial market.”

Trade

Programs # 9, # 10, # 11 and # 12 are dedicated to trade. It was decided to integrate the information systems of the regulatory authorities of the two countries for the traceability of goods, which “will allow to ensure control over the circulation of goods subject to traceability.”

Also, information systems for labeling goods and information systems of regulatory authorities in terms of veterinary and phytosanitary control will be integrated. It is noted that the traceability of controlled goods and regulated products will be ensured, as well as the traceability of all livestock products and products of plant origin.

According to the agreements, Russia and Belarus are harmonizing tax and customs legislation.
The parties will conclude agreements on general principles of taxation for indirect taxes, and will introduce a common system for administering indirect taxes. Also, Moscow and Minsk will create a new advisory body within the Union State – the Committee on Tax Issues.

Transport

Two union programs – 13 and 14 – relate to the transport sector. Program No. 13 states that the parties agreed to integrate transport control information systems of specialized agencies. For this, software for data exchange will be developed.

Program No. 14 is dedicated to the unification of the regulation of the transport market and applies to all types of transport.

In the field of air transport, there will be equal tariff conditions for the provision of airport and air navigation services, and restrictions on frequency and unification of airworthiness regulations will be lifted.

In the railway sector, it is planned to unify legislation, including tariff regulation, licensing, organization of passenger and cargo transportation. Water transport will fly under the flags of the two countries on inland waterways under the same rules. Road transportation is planned to be carried out on an unauthorized basis.

General legal norms will be prepared in terms of road classification, road safety, and other areas related to the road sector.

Energy

Program 15 provides for the creation of a unified gas market. The formation of a price for Russian gas for Belarus for 2022 has been agreed upon: at the meeting of Russian and Belarusian presidents Vladimir Putin and Alexander Lukashenko on September 9, it was announced that the price would remain at the 2021 level and amount to $ 128.5 per 1,000 cubic meters.

By December 1, 2023, the parties must determine and sign, as an addendum to the gas program, the principles of functioning and regulation of the unified gas market and set a time frame for their implementation in order to “converge business conditions in the gas sector”.

In addition, according to Program No. 16, united markets for oil and oil products will be formed. It is planned here (no terms are specified in the statement of the prime ministers) the adoption of an international treaty on the unification of markets and the harmonization of national legislation.

A unified market will be created for electricity as well.
As noted in Program No. 17, an interstate agreement will also be signed in this area, which will fix the rules for the functioning of such a market.

Moscow and Minsk also agreed to unify national legislation in the field of operation of nuclear power facilities, regulation of radiation safety, handling of nuclear fuel, and radioactive waste. The work should be completed by the end of 2023 (program no. 18).

From roaming to tourism

Programs 19 to 28 cover a layer from agriculture to tourism and social policy. The agrarian policy (program No. 19) will be unified and involves the convergence of legislation in this area “in order to increase the volume of mutual trade” in agricultural products, remove mutual barriers, ensure food security and develop agriculture.

Similar plans (program # 20) concern industry – the policy here should also be uniform.

The two countries intend to stimulate joint ventures, remove barriers, increase transparency and increase trade.
Uniform rules will be implemented in the field of government orders and government purchases (program No. 21). To ensure equal access to government orders and government purchases, it was decided to harmonize legislation. The parties also agreed to use bank guarantees issued by Belarusian banks for government purchases in Russia.

Until December 31, 2022, it is planned to develop uniform rules for the protection of consumer rights in the Union State (program No. 22). The two countries will establish uniform competition rules (Program 23). General approaches here will be enshrined in an intergovernmental agreement.

Program No. 24 provides for the unification of requirements “for the organization and implementation of trading activities”: uniform requirements will be approved and legislation in the field of trade and catering regulation will be harmonized.

Also, the common communications and informatization markets will have to function on general principles (Program No. 25). It is planned to cancel roaming on the territory of the Union State.

Accounting regulation and preparation of financial statements will be unified (program no. 26). Moscow and Minsk agreed:

create conditions for the circulation of “comparable consolidated financial statements of economic entities”;
on the formation of an information base for expanding foreign economic, investment, and business ties;
on the entry of economic entities into international capital markets and the access of “interested parties to the financial statements of economic entities”.

Legislation in the field of tourism is also expected to be unified (program no. 27). It is planned to harmonize tourism development strategies, create general rules for informing about the standardization of the quality of hotel services.

The final program number 28 deals with a coordinated policy in the social and labor sphere. It is planned to harmonize legislation in terms of labor relations, labor protection, employment of the population, social insurance and pensions, support for families with children, and social support for certain categories of citizens.

What’s next

In addition to the package of union programs and a joint statement, the heads of the two governments also approved the draft decree on the approval of programs at a meeting of the Supreme State Council (HCS) of the Union State. The decree will be signed by the presidents of Russia and Belarus, Vladimir Putin and Alexander Lukashenko. The meeting, as Mr. Lukashenko said on Friday, will take place on November 4. Once the decree is signed, the programs will become a legally binding document and the process of their implementation will begin.

On September 9, at a meeting with Alexander Lukashenko in the Kremlin, Vladimir Putin admitted that after the two countries create an economic basis, the process of political integration of the two countries could begin.

Moscow and Minsk have been negotiating deep integration for about three years. Their active phase began after the presidential elections in Belarus in 2020. The announcement of Alexander Lukashenko as the winner of the elections then provoked large-scale protests, which the authorities harshly suppressed. The West did not recognize Mr. Lukashenko as president. In response to the actions of the Belarusian leadership, the US and EU imposed sanctions.

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