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11/30/2016

In 2015, the budgets of the EEU Member States received $10.6 billion

Supreme audit institutions of Russia, Armenia, Belarus, Kazakhstan and Kirgizia held a joint Collegium meeting in the format of a videoconference.

At the meeting, which was held, for the first time, in a pentalateral format, the participants reviewed the findings of the audit of observance by authorized bodies of the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic and the Russian Federation of the Protocol on the Procedure for crediting and distributing import customs duty proceeds (other equivalent duties, taxes and levies) and their transfer to the budget revenue of the Eurasian Economic Union Member States, in 2015.

In her welcoming speech at the opening of the pentalateral Collegium meeting, the Head of the Russian control body noted that nowadays the cooperation in the frame of the Eurasian Economic Union is one of the main priorities and instruments of the member states’ economic policy. “The Union is developing steadily. Certain success has been achieved in the development of the contractual and legal framework. The signing of a new EEU Customs Code is expected soon, which will allow moving towards a unified customs regulation and raise the administration mechanisms to a totally new level,” Tatyana Golikova emphasized.

At the same time, the Chairwoman of the Accounts Chamber of the Russian Federation regretted that the Eurasian Economic Commission has not approved so far an Agreement on conducting joint control activities by audit institutions to verify the observance of the procedure for crediting and distributing import customs duty proceeds. “Due to this fact, while conducting the first pentalateral audit this year, we were forced to rely upon the tried and tested practice of such audits within the frame of the Customs Union. Undoubtedly, this solution could not be called an ideal one in view of the enhancement of integration development,” Tatyana Golikova noted.

Representatives of audit institutions of the five countries made presentations at the Collegium, with Auditor of the Accounts Chamber of the Russian Federation Sergey Shtogrin speaking on behalf of the Russian party.

The parties were unanimous in the assessment of the audit findings, stating that in 2015, the authorized bodies of the EEU Member States generally ensured the observance of the procedure for the distribution of import customs duties. Import customs duties were distributed in accordance with the rates* established for each Party.

The total amount of import customs duties credited in 2015 to the Parties’ budgets amounted to $10.6 billion.

“In comparison with 2014, the revenues of customs duties tend to decrease by $8.8 billion or 45.4%”, Auditor of the Russian audit institution Sergey Shtogrin noted in his speech.

The sum of 556.5 billion Russian rubles in the national currency was credited to the budget of the Russian Federation, 35.6 billion drams - to the budget of the Republic of Armenia, 8.6 trillion Belorussian rubles - to the budget of the Republic of Belarus, 188.5 billion tenges - to the budget of the Republic of Kazakhstan, 3.1 billion soms - to the budget of the Kyrgyz Republic.

At the same time, certain concern and weaknesses have been identified in the framework of the joint audit, including those associated with crediting of the sums of customs duties to undistributable accounts. “While the amount of revenues of such duties is to decrease from year to year, in 2015 there was a sharp increase therein. For instance, in the Republic of Kazakhstan, the sum of such revenues increased 7.7 times and amounted to 4.3 billion tenges”, Sergey Shtogrin noted.

Besides, as in the previous year, a significant portion of retained revenues in the Republic of Kazakhstan (664.7 mln tenges) is associated with the customs clearance of goods by companies whose activities are related to subsoil use and is covered by Article 372 of the Customs Code of the Customs Union**. However, according to the information received from the Eurasian Commission based on the study of this issue, the customs legislation only governs the issues associated with the payment (collection) of customs duties in respect of the goods transported across the customs border of the Eurasian Economic Union. At the same time, it does not apply to issues related to their subsequent crediting and distribution. The procedure for the crediting and distribution thereof is determined by the relevant Agreement dated May 20, 2010***, and from January 01, 2015 onwards - by the Protocol, which govern the issues in interbudgetary relations of the EEU Member States and involve the treasury aspects of interaction. To that end, starting from September 01, 2010, customs duties, including those paid by organizations acting under Article 372 of the Customs Code, shall be subject to distribution among the budgets of the EEU Member States.

Import customs duties to the amount of 22.1 mln soms have been unjustifiably credited to the undistributable account in the Kyrgyz Republic (76.8% of the total amount of revenues selected for the audit). The violation has been corrected, the specified funds were distributed in 2016.

The reports on the state budget execution for 2015 in the Republic of Armenia and Kyrgyz Republic were drawn up without regard to the rules of the Protocol in terms of completeness of recognition of the amounts of import customs duties: the sums of duties in the amount of 2.8 mln drams and 1.1 mln soms, accordingly, credited on the last business day of the calendar year were not recognized in the said reporting.

As of the time of the joint control activity, the technological documents regulating the communication in the frame of implementation of the foreign and mutual trade by means of the integrated information system, had not been approved by decision of the EEU Collegium.

Until now, there is no regulation of the mechanism to credit and distribute social protection and anti-dumping duties, where the obligation to pay them arose prior to the entry into force of the EEU Agreement, taking into account the joining of Armenia and Kyrgyzstan to the process of distribution of these duties.

According to the representative of the Eurasian Economic Commission, who was present at the joint Collegium meeting, the Eurasian Economic Commission is currently actively working on the elimination of shortcomings identified and settlement of problems. In particular, he said that the technological documents governing the communication had already been approved by the Collegium of the Eurasian Economic Commission. In the framework of improvement of the EEU Agreement provisions, the Commission has also initiated the solution of the issue regarding the procedure for crediting and distribution of social protection and anti-dumping duties, where the obligation to pay them arose prior to the entry of the Agreement into force. The unified position on this issue was approved based on the discussions. The work is currently being carried out to elaborate and approve relevant changes to the Protocol.

As for the Agreement on conducting by supreme audit institutions of the EEU Member States of joint control activities by audit institutions to verify the observance of the procedure for crediting and distributing import customs duty proceeds, the representative of the Commission informed that the draft had been sent to the Parties for approval on the national level. Besides, he expressed his hope that this important document would be signed in the nearest future.

Based on the results of the meeting, the participants of the joint Collegium adopted the decision to send the audit report to the governments of the Russian Federation, the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan and the Kyrgyz Republic. The Accounts Chamber of the Russian Federation will also send the audit report to the Chambers of the Federal Assembly of the Russian Federation and the Eurasian Economic Commission.

In conclusion, the parties once again emphasized the importance of the early signing of the Agreement, which would govern the work of supreme audit institutions in the frame of joint audits. In the opinion of the participants of the meeting, this would allow not only avoiding those difficulties which they had encountered in the course of the audit, but also improving the efficiency and the level of inter-agency cooperation.

Tatyana Golikova also invited her colleagues to sign the updated versions of bilateral Cooperation Agreements, which would comply with modern international realities, including the regulatory and legal framework of the EEU pertaining to SAIs’ interaction.


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