Regulation No 666: yet another attempt to restrict imports in Belarus
As of August 27, an extensive list of imported products was subjected to examination each time when crossing the border. For importers, this means an increase in costs when supplying products to Belarus. This measure is a non-tariff restriction on imports, which contradicts the EEU single market rules and therefore will be abolished or substantially amended in the near future.
The Council of Ministers Regulation No 666, which took effect on August 27th, envisages that virtually every batch of imported products should be subjected to a sanitary-hygienic examination. The regulation lists a wide range of commodity items, including food products, children’s goods, perfumes, cosmetics and other produces as listed in the Council of Ministers Regulation No 635 of July 7th, 2012. The regulation is not applicable to products manufactured in the EEU.
Previously, importers had to undergo sanitary and hygienic registration, which was valid for three years and did not require examination of every batch. Due to the new regulation, each batch would be supplied with almost one month delay, because about 15 days is required to prepare all relevant documents and then lab tests will take up to 14 days and will cost from BYR 600,000 to several million Belarusian roubles for each product type, depending on the complexity of the tests. During the tests, product samples are usually destroyed.
Following the adoption of this regulation, activities of some importers were paralyzed. In addition, there are still no clear instructions and explanations from the relevant services of the Health Ministry. The stated purpose of this measure was to enhance protection of the domestic market from poor quality imports, which could increase following Armenia and Kyrgyzstan accession to the EEU. Yet the real purpose was to restrict imports to Belarus and to raise their costs due to additional costs of examination in accordance with the new rules.
As a result, Belarus might experience some trade deficit and supplies of some products may be suspended. In addition, the new regulation contradicts the EEU single market rules because of the requirement to undergo additional examination in Belarus even for already certified imported products. In response, Ukraine, Germany, China and other countries may introduce reciprocal restrictions on Belarusian products. The regulation in its current form is counterproductive; it will require amendments and clarifications, if not full abolition following reactions by foreign partners.
Belarus has adopted measures aiming to restrict imports in order to protect the domestic market. However, the new regulation is not well-thought through and contradicts the EEU single market rules. It will be either amended, or abolished in order to eliminate these contradictions.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.