Russia wants to limit schemes bypassing food embargo
Russia’s embargo on some foodstuffs from the EU has created favourable conditions for some alternative delivery routes through Belarus. One of the most popular schemes is processing imported raw materials at Belarusian enterprises and exporting the processed products to Russia. Russia is unable to block the re-export entirely, however, she suggests measures to Belarus to increase control over such supplies.
Rosselkhoznadzor may impose restrictions on the supply of dairy and fish products from several enterprises in Belarus.
Russia’s embargo on meat, dairy, fish, fruit and vegetables from the EU has created opportunities for the countries not on the sanctions list to increase their supplies to Russia. For instance, lettuce grown in the Netherlands was imported to Russia as if originating from Israel. Polish apples were imported as originating from Serbia and Macedonia. Fruits from Moldova were listed in the documents as grown in Belarus. The embargo has also boosted exporters’ profits. Prices for fruits and vegetables in the EU have dropped, and have gone up in Russia.
In Belarus, schemes bypassing Russia’s food embargo are as follows. A Belarusian company or a joint venture imports raw materials to Belarus. After processing them, Belarus is listed as the country of origin in the documents. Later, such products may be exported to Russia without any restrictions. Processing might imply something very simple. For instance, chilled and frozen fish from Norway could be put in vacuum packaging and legally exported to Russia as made in Belarus. In the first two weeks of September, Belarus more than doubled her fish imports from Norway compared with July (before the embargo was introduced). Belarus has also increased imports of raw milk from Poland and Lithuania in order to meet domestic market needs after exports of butter and cheese to Russia increased.
Various schemes bypassing Russia’s food embargo may only be stopped if Russia and Belarus introduce border customs control, which would contradict the Eurasian Union integration agreements. The only way for Russia to reduce re-imports from Belarus is to introduce harsh sanitary control over imported products. Russia has already used similar measures in the past during the “milk wars” with Belarus. Russia hinted she might introduce restrictions on imports from certain Belarusian enterprises thus prompting Belarus to self-restrictions and self-regulations. Russia may turn a blind eye if imports from Belarus increase by 20%-30%; but if imports from Belarus grew exponentially, she would introduce harsh quality controls and return supplies to Belarus on formal grounds.
Since Russia’ embargo on foodstuffs from the EU could be a short-term measure, Belarus attempts to gain the maximum benefit from her membership in the Customs Union. Russia will not completely ban re-export schemes, but will limit their scope with administrative means.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.