RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/RUS/43
30 October 2000
(00-4526)
Working Party on the
Accession of the Russian FederationOriginal:  English
ACCESSION OF THE RUSSIAN FEDERATION
Information on Trade Regimes Provided Under Preferential Trade Agreements
The Permanent Mission of the Russian Federation has submitted the following information on
Trade Regimes provided under Preferential Trade Agreements, with the request that it be circulated to
members of the Working Party.
_______________
Information on Trade Regimes Provided under Preferential Trade Agreements
I. PREFERENTIAL TRADE AGREEMENTS WITH CIS COUNTRIES
Below please find information about the regime provided under the following main trade
agreements:
- Bilateral agreements on free trade (containing exemptions) with non-members of Customs
Union agreements;
- Agreements on creation of the Customs Union and bilateral trade agreements on free trade
with countries-members of Customs Union agreements;
- Agreement on the Creation of a Free Trade Area for CIS countries;
- Agreement on the Creation of Union State between the Russian Federation and the Republic
of Belarus.
1. Bilateral agreements on free trade (containing exemptions) with non-members of
Customs Union agreements
Pursuant to bilateral agreements between the Russian Federation and the said CIS countries
on free trade, imports of goods (including agricultural products) from CIS countries into the customs
territory of the Russian Federation shall be exempt from import customs duties. These preferencesshall be provided based on a certificate of origin confirming the exporter to be a resident of a CIS
country. Protocols providing lists of exemptions from the free trade regime have been signed with the
countries-members of bilateral agreements.
The Free Trade Regime (with exemptions) between the Russian Federation and the Republics
of Azerbaijan, Armenia, Georgia, Moldova, Turkme nistan, Uzbekistan, and Ukraine is provided under
the following bilateral agreements:WT/ACC/RUS/43
Page 2
1. The Agreement between the Government of the Russian Federation and the Government of
the Azerbaijani Republic on Free Trade of 30 September 1992, and the Protocol on
Exemptions from the Free Trade Regime to the Agreement between the Government of the
Russian Federation and the Government of the Azerbaijani Republic on Free Trade of 30September 1992, dated 26 November 1992.
On 15 May 2000, draft Protocol on Amending and Supplementing the Above Protocol
Containing Lists of Goods Subject to Cross-Bo rder Exemption Between the Parties, being an
integral part of the Protocol, and the draft Agreement between the Government of the Russian
Federation and the Government of the Azerbaijani Republic on the Principles of Levying
Indirect Taxes in Mutual Trade, were initialled.
Pursuant to the Protocol of 26 November 1992, trade between the Russian Federation and the
Azerbaijani Republic shall proceed without exemptions or limitations, except goods falling
under the national legislation on tariff and non-tariff (licensing, quota) regulation of exports
of goods.
2. Agreement between the Government of the Russian Federation and the Government of the
Republic of Armenia on Free Trade of 30 Se ptember 1992, and Protocol to the Agreement,
dated 29 August 1997.
Pursuant to the Protocol of 29 August 1997 concerning exemptions from the free trade regime
to the above-mentioned Agreement, trade between the Russian Federation and the Republic of
Armenia shall proceed without exemptions or restrictions, save for:
- white sugar (CN FEA CIS 1701 99 100);
- goods subject to licensing and quota for export under the respective laws of each of
the parties.
3. Agreement between the Government of the Russian Federation and the Government of the
Republic of Georgia on Free Trade of 3 February 1994, and Protocol on Exemptions from the
Free Trade Regime of 11 May 1994.
These exemptions concern goods falling under the Russian (Georgian) legislation on export
tariff, licensing and quota in respect of exports of goods (works, services).
4. Agreement between the Council of Ministers/th e Government of the Russian Federation and
the Government of the Republic of Moldova on Free Trade of 9 February 1993.
Exemptions from the said regime, according to the agreed nomenclature of goods, shall be
made out as protocols to constitute an integral part of the Agreement.
Protocol to the Agreement between the Council of Ministers/the Government of the Russian
Federation and the Government of the Republic of Moldova on Free Trade of 9 February
1993, signed on 15 February 1993, provides that exemptions from the free trade regime
concern goods falling under the current Russian legislation on export tariff and the legislation
on licensing and quota in respect of export in effect as at the moment of their customs
clearance for export from Russia to the Republic of Moldova. In addition, white sugar (CNFEA CIS 1701 99 100) is exempted from the free trade regime between Russia and Moldova.
5. Agreement between the Government of the Russian Federation and the Government of
Turkmenistan on Free Trade of 11 November 1992.WT/ACC/RUS/43
Page 3
Protocol to the Agreement between the Government of the Russian Federation and the
Government of Turkmenistan on Free Trade of  11 November 1992, was signed on 19 January
1993 and took effect in April 1993.
The Protocol lists regulations defining the types of goods subject to exemption from the free
trade regime.
6. Agreement on Trade Relations Between the Russian Federation and the Republic of
Uzbekistan of 13 November 1992. Took effect on 25 March 1993.
Protocol on exemptions from the free trade regime to the Agreement on Trade Relations
Between the Russian Federation and the Republ ic of Uzbekistan of 13 November 1992, was
signed on 13 January 1993 and defines the types of goods subject to exemption from the free
trade regime.
7. Agreement Between the Government of the Russian Federation and the Government of
Ukraine on Free Trade of 24 June 1993 (hereinafter, the Agreement of 24 June 1993).
Pursuant to the Protocol to the Agreement of 24 June 1993, signed on 24 June 1996,
exemptions from the free trade regime concern goods falling under the current Russian
legislation on export tariff in effect as at the moment of their customs clearance for exportfrom Russia to Ukraine, or under measures of non-tariff regulation. In addition, the Protocol
to the Agreement of 24 June 1993, signed on 14 November 1997, provides for exemption of
white sugar (CN FEA CIS 1701 99 100) from the free trade regime.
All of the above bilateral agreements provide a VAT levying procedure based on the principle
of the country of origin. It will be amended pursuant to the provisions of the Agreement on
Creation of the CIS Free Trade Area. Under a Decree of the President of the Russian
Federation, VAT shall not be charged on imports from Ukraine. Ukraine shall not charge
VAT on exports to the Russian Federation.
2. Creation of the CIS Free Trade Area
The underlying document is the Agreement on the Creation of Free Trade Area of
15 April 1994, signed by all CIS member-states in furtherance of the provisions of the Agreement on
the Creation of Economic Union of 24 September 1993 (signed by all CIS countries, except Ukraine).
The Agreement on the Creation of Free Trade Area of 15 April 1994 has not been ratified by
the Russia.
On 2 April 1999, the CIS countries (except Turkmenistan) signed the Protocol on Making
Amendments and Supplements to the Agreement on the Creation of Free Trade Area of 15 April 1994
(hereinafter, the Protocol) which did not provide for development or negotiation of a general list ofexemptions. Negotiation of exemptions was scheduled to proceed bilaterally.
The Agreement and the Protocol register the intent to introduce a multilateral free trade
regime in the future instead of the heretofore exis ting bilateral procedure in the trade between the CIS
partners. As regards export and import of goods, originating from customs territories of countriesbelonging to the free trade area, uniform rules shall apply.
The Protocol on Mutual Trade Between Countries-Members of the Free Trade Area provides
for lifting quantitative restrictions on import and export of goods, as well as any duties, taxes andWT/ACC/RUS/43
Page 4
levies having a similar effect. The Protocol contains provisions stipulating the terms of and
procedures for application of safeguards in mutual trade. The Protocol also includes provisions
intended to ensure fair competitive practices and specifying the dispute settlement procedure.
Formation of the free trade area is associated with a transit to the procedure of indirect
taxation based on the principle of the “country of destination” of goods. The Protocol provides for
introducing this procedure effective 1 January 2000 in accordance with the national laws of the
member-states of the Agreement.
At the same time, the Federal Law of the Russian Federation of 19 July 2000 “On Enactment
of Part II of the Tax Code of the Russian Fede ration and Amendment of Certain Legislative Tax Acts
of the Russian Federation” provides that the procedure and time frame for application of indirect taxesshall be provided under bilateral intergovernmental agreements of the Russian Federation with other
member-states of the Agreement.
Pursuant to this Law of the Russian Federation, transit to “the country of destination”
principle of VAT taxation in the trade with th e Community member-states shall be effected on
1 July 2001.
Formation of a multilateral free trade area between the CIS countries being in its early stage,
and absent a ratification by the Russian Federation, this Agreement cannot as yet be regarded as a
temporary agreement leading to the creation of a free trade area for the purposes of GATT-94 ArticleXXIV. At the same time, the existing bilateral agreements on free trade with the CIS member-states
correspond to the requirements of Article XXIV in respect of free trade areas (two or more member-
states).
3. Customs Union
The Russian Federation, the Republic of Belarus, the Republic of Kazakhstan, the Republic of
Kyrgyzstan, and the Republic of Tajikistan have made a number of agreements providing for step-by-
step creation of a Customs Union. Currently the Customs Union is in a formative stage. There is no
single customs tariff or single customs territory, nor have single instruments of foreign economic
policy been devised. The member-states of Agreement are separate customs territories maintaining
their individual tariffs and other regulatory measures in respect of their foreign trade with otherterritories, and almost entirely autonomous for the purposes of their respective foreign economic
policies. Trade with the member-states of the Union practically proceeds under the following bilateral
free trade agreements providing for a free trade regime free of exemptions and restrictions:
Agreement on Trade and Economic Co-operation Between the Government of the Russian
Federation and the Government of the Republic of Tajikistan of 10 October 1992.
Agreement Between the Government of the Russian Federation and the Government of the
Republic of Kazakhstan on Free Trade of 22 October 1992.
Agreement between the Government of the Russian Federation and the Government of the
Republic of Kyrgystan on Free Trade of 8 October 1992.
Gradual creation of a Customs Union is provided under a number of agreements signed over
1995 – 1996. The system of those agreements is based on the Agreement on Customs Union of6 January 1995 between the Russian Federation, the Republic of Belarus and Republic of Kazakhstan,
to which the Kyrgyz Republic and the Republic of Tajikistan later acceded. The agreements are as
follows:WT/ACC/RUS/43
Page 5
- Protocol to the Agreement on Cust oms Union of 6 January 1995 concerning
introduction of a free trade regime without exemptions or restrictions between the
Russian Federation and the Republic of Belarus.
- Protocol to the Agreement on Customs Un ion of 6 January 1995 on introduction of a
free trade regime without exemptions or re strictions between the Russian Federation
and the Republic of Kazakhstan.
- Agreement on Accession of Kyrgyz Republic to the Agreement on Customs Union of
29 March 1996.
- Agreement on Accession of the Republic of Tajikistan to the Agreement on Customs
Union of 26 February 1999.
- On 26 February 1999, the Russian Federation, the Republic of Belarus, the Republic
of Kazakhstan, Kyrgyz Republic, and the Republic of Tajikistan signed the
Agreement on Customs Union and Single Economic Space.
- Pursuant to Article 8 of the Agreement, the trade partners shall implement the free
trade in goods regime in full without exemptions or restrictions on the basis of
bilateral and multilateral free trade agreements between them.
- Under Article 13 of the Agreement, the Partners shall maintain a co-ordinated system
of tariff preferences in respect of imports from third countries.
- Under Article 15 of the Agreement, the Partners shall undertake co-ordinated action
to phase in a uniform trade regime in respect of trade in goods with third countries. Inrespect of trade with countries having a free trade regime agreement with one of the
Partners, such Partner shall negotiate with other Partners lists of exemptions and
restrictions in respect of the free trade regime, or countervailing measures arising out
of the occurring clash of trade regimes.
- Pursuant to Article 23 of the Agreement, the Partners will determine the time frame
for creation of the Customs Union in separate agreements. No such Agreements haveyet been signed.
- On 17 February 2000, the Agreement on a Single Customs Tariff for the Member-
States of the Customs Union was signed providing for gradual formation of a single
customs tariff within 5 years of the effective date of the Agreement.
Given that the formation of the Customs Union, including negotiations on formation of single
customs tariff and other fundamental elements of the Customs Union, is still at an early stage, no
information regarding the plans for its creation can now be submitted. The Customs Union is
therefore for GATT-94 (Article XXIV) purposes a free trade area displaying some aspects of importtariff co-ordination.
As regards GATS Article V, it should be noted that the existing agreements between the
parties do not provide for any specific obligations in liberalisation of trade in services.WT/ACC/RUS/43
Page 6
4. Union State
Agreement on the Creation of Union State between the Russian Federation and the Republic
of Belarus was signed on 8 December 1999 and took effect on 26 January 2000. The agreement
provides for gradual creation of a single economic space and a single customs territory.
The currently existing trade regime is regulated under the agreements described in
Section 1.3.
Stages of creation of a single customs territory and a single economic space have been
scheduled by reference to the priority of legal, economic and social tasks under the Programme of
Action of the Russian Federation and the Republic of Belarus implementing the provisions of theAgreement on the Creation of Union State covering the period until 2005. As one of the stages of
creation of a single economic space allowing for free circulation of goods, services, capitals and
manpower, equal terms and guarantees for the economic actors of the two States, the formation of a
single customs space shall be completed.
Despite the fact the nearly all trade between the Russian Federation and the Republic of
Belarus is duty-free and otherwise unrestricted in respect of goods originating from these countries, a
number of restrictions are still maintained. Transit to a co-ordinated and later a single policy in respect
of third countries, international organisations and associations, will be possible after the completion of
the whole complex of economic measures stipulated under the Programme of Action of the RussianFederation and the Republic of Belarus implementing the provisions of the Agreement on the
Creation of Union State.
The Programme stipulates as follows:
- by 2002: unify customs tariffs, rules of origin, customs procedures, export and
currency control, measures of non-tariff regulation;
- by 2004: unify national regimes of regulation of foreign trade, customs legislation,
safeguards in trade with third countries, indirect taxation in foreign trade;
- by 2005: identical legal regimes for regulation of foreign trade, including customs
codes, customs tariff, export and currency control, formation of management bodies
of the Union State in the sphere of trade and customs policy.
The co-ordinating functions shall be undertaken by the Committee for Cross-Border Tariff
and Non-Tariff Regulation affiliated with the Executive Committee of the Union Between Belarus
and Russia.
II. SANITARY AND PHYTOSANITARY MEASURES
Article 3 of the Agreement on Partnershi p and Co-operation provides for possible
commencement of negotiations to create a free trade area between the Russian Federation and the
European Communities. Discussion of this issue is led by a Sub-Committee for Trade and Industry ofthe Committee of Russia-EU Co-operation, whose most recent meeting was held on 11-12 September
2000 in Brussels.
Upon mutual agreement of the parties it was resolved to carry on the preliminary inquiry into
the conditions for creation of a free trade area.WT/ACC/RUS/43
Page 7
III. AGREEMENT ON FR EE TRADE WITH THE UNION REPUBLIC OF
YUGOSLAVIA
The Russian Federation and the Union Republic of Yugoslavia shall liberalise their mutual
trade under the provisions of the Agreement between the Russian Federation Government and theUnion Government of the Union Republic of Yugosl avia on Free Trade, the Protocol on Exemptions
from the Free Trade Regime to the above Agreement,  and the WTO rules, to implement the free trade
regime. The provisions of the Agreement apply to goods listed as items 1 – 97 of the Nomenclature
[ГС?], or be implemented in the customs tariffs of each of the States.
For five years the parties will strive to take co-ordinated measures to gradually lift any import
customs duties and equivalent charges in their mutual trade in goods originating from the customsterritory of the Russian Federation and Yugoslavia. The Agreement provides for annual negotiation of
exemptions from the free trade regime to be implemented under bilateral protocols singed by the
parties in accordance with their respective national laws. Exemptions extend to goods falling under
the Russian legislation on export tariff, licensing and quota in respect of export of goods (works,
services), and to goods listed in Attachments 1, 2, and 3 to the Protocol on Exemptions from the FreeTrade Regime to the Agreement on Free Trade (the full text of the Agreement and the Protocol are
adduced as Attachment 5).
VI. THE GENERAL SYSTEM OF PREFERENCES
The Russian Federation provides tariff preferences to developing and least-developed
countries for the purposes of import to the customs territory of the Russian Federation of goods
(including agricultural products) originating from su ch countries. All goods originating from least-
developed countries are duty free, while in respect of goods originating from developing countries
duties are charged at 75% of the base rate of customs duties maintained for countries enjoying theMost-Favoured Nation Treatment. The above-listed tariff preferences are provided based on a
certificate of origin. The value of tariff preferences is provided under Resolution No. 454 of the
Government of the Russian Federation of 6 May 1995. The list of countries enjoying tariff
preferences fort the purposes of imports of goods was approved by Resolution of the Government of
the Russian Federation of 13 September 1994, No. 1057, and supplemented by Resolution No. 1095
of 13 September 1996, and the Resolution of 25 January 1999.
When compiling the list of goods eligible for tariff preferences for the purposes of import to
the Russian Federation, the Russian Government proceeded from the general practice of providing
such preferences to agricultural products grown by developing and least-developed countries,
industrial products and handicrafts of such countries, products of applied and decorative arts and other
such goods. The list of such goods was approved by Resolution No. 414 of the Government of theRussian Federation of 25 May 2000 (See Attachment 6).WT/ACC/RUS/43
Page 8
Attachments (to be submitted):
1. Agreement on the Creation of a Free Trade Area of 15 April 1994.
2. Protocol of 2 April 1999 on Making Amendmen ts and Supplements to the Agreement on the
Creation of a Free Trade Area of 15 April 1994.
3. Agreement on Customs Union and Single Economic Space of 26 February 1999.
4. Agreement on the Creation of Union State of 8 December 1999.
5. Agreement between the Government of the Russian Federation and the Union Government of
the Union Republic of Yugoslavia on Free Trade Between the Russian Federation and the
Union Republic of Yugoslavia, and the Prot ocol on Exemptions from the Free Trade Regime
appended to the Agreement on Free Trade.
6. The list of goods enjoying tariff preferences when imported to the Russian Federation.
__________