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November 2009

Recent legal & business developments in Belarus, November 2009

1. The central piece of news this autumn is the creation of the Customs Union of Russia, Belarus and Kazakhstan. On 27th November leaders of the three countries proclaimed creation of the customs union and raised hopes to promote even further integration and create single economic area in future. Starting on 1st January 2010 members of the Customs Union shall apply unified import customs duties agreed in the Unite Customs Tariff of the Union, and on 1st July 2010 uniform Customs Code shall come into force in each country.  Members of the Union also agreed upon non-tariff barriers and measures towards imports inflow from outside of the Customs Union.  

Although considerable progress in development of the Customs Union is obvious, there are still some acute and non-agreed but vitally significant issues about operation of the Union, most considerable ones being customs duties on imported vehicles and distribution of proceeds from duty on export of carbohydrates. These impediments were not relieved at Minsk presidential meeting so it was resolved to proceed with negotiations and put a deadline to arrive at a result – until 1st July 2010.

Kyrgyzstan and Tajikistan are reported to have shown interest in joining the Customs Union in the future.  

Treaties and documents of the Customs Union are expected to be ratified by Belarusian Parliament within its current session that will last until 18 December 2009.

2. Privatization of state-sector enterprises does not lose momentum: implementing its obligations before the IMF Belarus intends to privatize 7 large-scale production enterprises, including an engineering plant, a confectionary, 2 textile manufacturers, consumer detergents producer and some others. Shares of these enterprises are to be offered for sale until the end of February 2010. Also recently the media reported that Russian Sberbank and Belarusian Government arrived to an understanding as for the evaluation of Belarusian state-owned BPS-Bank, which is one of the largest in Belarus.

3. In November Presidential Decree No. 10 "On Creation of Further Conditions for Investment Activities in the Republic of Belarus" issued on 6 August 2009 came into force. New regulations significantly ease process of executing and investment agreement with the Republic of Belarus. Such investment agreement may now be executed by a local executive committee, a ministry, Council of Ministers – if it provides for some benefits or privileges already contemplated by legislation, or by the Council of Ministers upon approval of the President – if any benefits or privileges not contemplated by legislation are being introduced. Authority has 30 days to consider application of the investor.

4. As another step in implementation of the "liberalization course" plans for abolishment of retail trade licensing in 2010 were revealed. According to the draftsmen, it is intended to introduce "Trade Register" kept by the Ministry of Trade and thus substitute the need to obtain a retail license (which is most often lengthy and technically complex procedure) with a 3-days one-stop procedure of enrolling into the Trade Registry while obtaining technical approvals (from sanitary authorities, firefighters etc.) later on during actual operation of the trade object.