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Trade regulation in Russia

In the current context of globalization of trade it is necessary for countries to find ways to regulate imports and exports in order to keep their national economy as competitive as possible. There are several ways to regulate trade but they can be divided into two categories: tariffs and non-tariff barriers.

Tariffs are import duties or taxes imposed by a country on goods entering its customs; their rates are usually determined by bilateral or multilateral agreements between nations.

The Russian Federation is part of several free trade agreements currently in force, granting it access to liberal trade relationships with Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kirghizstan, Moldova, Serbia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Vietnam (although it should be noted that, due to political reasons, Russia currently applies an embargo on Ukrainian imports). The provisions of these agreements implement preferential custom duties,or even suppress all custom duties on trade between Russia and those other countries. The major free trade agreement that Russia is part of is the Eurasian Economic Union. Its members (Russia, as well as Armenia, Belarus, Kazakhstan and Kirghizstan) share a single custom territory meaning that no customs duties or economic limitations are applied on trade between the members.

Regarding tariffs on trade with the rest of the world the Russian Federation applies the rates of the Common Customs Tariffs of the Eurasian Economic Union. Those rates are revised annually, but are usually around 5%. It should be noted that zero import duties rates apply to goods originating from the least developed countries imported into the EEU.

Non-tariff barriers are not as easy to pinpoint as tariffs. They usually take the form of laws or administrative regulations that have the effect, directly or indirectly, of restricting access of foreign goods and services to a domestic market. Non-tariff barriers tend to be more efficient than tariffs, as they are more insidious: while tariffs are published and easily understood, non-tariff barriers can be disguised in detailed administrative codes written in the local language , and even hidden from foreign firms and only available for local customs inspectors. Some non-tariff barriers are enacted for the sole purpose of regulating trade, while others exist to protect the social well-being of the country. Those include health and safety regulation as well as environmental regulations. On the other hand non-tariff barriers whose goal is to regulate trade include quotas, embargoes and boycotts. Quotas are restrictions imposed on the number of goods allowed to be imported; except for special cases, they are not internationally accepted as a lawful way to regulate trade. Embargoes are total or near total bans on trade with a country, and are usually used as a political sanction. Boycotts are refusals to trade with certain firms, usually from a certain country; as embargoes, they are usually used for political reasons.

Most of the legislation applied in Russia regarding non-tariff barriers comes from the EEU. The EEU non-tariff legislation implements exports and imports bans of certain goods, quantitative restrictions on certain goods, exclusive rights to export or import certain goods, monitoring for export or import of certain goods, as well as authorization based procedures for import of certain goods. The Annex 7 to the EEU Treaty lists the goods that are affected by non-tariff barriers and sets the rules governing the import of those goods.

Aside from the EEU-based legislation on non-tariff barriers the Russian Federation has adopted in June 2018 the Federal Law on Retaliation Measures to Unfriendly Actions of the United States and other Foreign States allowing the imposition of bans and restrictions on imports of certain goods coming from unfriendly foreign states.

Aside from its own national regulations and those coming from the various free trade agreements that it is part of the Russian Federation as a member of the World Trade Organization has to abide by certain rules regarding trade regulation. The World Trade Organization was founded in 1995 as a replacement for the General Agreement on Tariffs and Trade, with the goal is to promote the liberalization of trade and to fight protectionism. The WTO administrates about 60 international agreements that must be signed and ratified by all members upon accession. A lot of these treaties govern and restrict non-tariff barriers to trade.

One of those treaties is the Agreement on Technical Barriers to Trade, which entered in force in 1995, before Russia even became a member. The key principles of this agreement are non-discrimination, in order to prevent members from applying unfair technical regulations and standards to imported goods compared to those applied to national goods; the avoidance of unnecessary barriers to trade, to ensure that members do not restrict trade under fallacious pretexts such as ultra-restrictive technical regulations; the harmonization of standards on an international scale in order to provide the members with harmonized standards that should be used as a basis for their technical regulation, standards and conformity assessment procedures; and the obligation of notification which obliges the members to inform each other of technical barriers to trade before they come into force and to discuss them.

The agreement on the Application of Sanitary and Phitosanitary Measures entered in force at the same time as the Agreement on Technical Barriers to Trade, in 1995. It sets regulations regarding the policies adopted by the members relating to food safety and animal and plant health with, once again, the goal to promote trade between the members.

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