Domestic business is deprived of exercising its legitimate right to import goods under the WTO rates

Currently, almost all Member States of the Eurasian Economic Union, except for Belarus, are also members of other international integration association - the World Trade Organization, which unites 162 states at the moment.

As you know, the main advantage of joining the WTO is provision of favorable conditions for business, access to world markets of goods and services, as well as an effective dispute resolution mechanism.

However, Kazakhstan in current the situation has several options - the ability to import goods from WTO countries by the rates of the Common Customs Tariff and at reduced customs rates of the WTO as part of the List of exemptions approved by the Council Decision of Eurasian Economic Commission # 59 dated by 14^th of October 2015 consisting of 1347 commodity subheadings.

Department of economic integration reports that 567 commodity subheadings were added to this list in 2017, and in accordance with the new commodity nomenclature of EAEU the list consists of 2175 commodity subheadings.

However, for domestic business it is not as positive as it might seem at first glance. For the second month of the current year business in practice is unable to exercise their legitimate right to import goods under the WTO rates.

This happens for a number of reasons, such as lack of a supranational decision on updating the list of seizures due to differences between the individual participants of the integration association.
As it was commented by Deputy Chairman of NCE RK "Atameken" Dana Zhunusova, "before the issue of acceleration of adoption of a supranational document was repeatedly raised by NCE, the requests were sent to the Ministry of National Economy, the Commission" of the Republic of Kazakhstan, the Commission”.

"According to the EEC, the document has now been for more than a month at the consideration by the Kyrgyz side. It's a shame that such a "treasured" document for Kazakh business "gathers dust" in the administrative buildings of Bishkek and our partners in the Union in the face of the Kyrgyz Republic delay the reconciliation process in spite of the assurances of fraternal understanding and support", - said Dana Zhunusova.

In addition, the existing draft of the Council Decision stipulates the entry into force after 10 calendar days from the date of official publication, but with the coverage of the legal relations from 1^st of December 2016.

"It jeopardizes the domestic business, as from February 2017 and, respectively, the two-month period of the financial activities related to the import of goods from the WTO comes under paragraph 2 of Article 280-1 of the Code of the Republic of Kazakhstan" On Administrative Offences" dated by 5^th of July 2014, "issue by a payer of value-added tax of invoices in an electronic form with violation of the deadline set by the tax legislation of the Republic of Kazakhstan", - commented on the current situation the member of the Board of NCE RK "Atameken" Dana Zhunusova.

It should be understood that these types of penalties are provided for each document issued out of time, and this enormous additional burden on businesses for violations, which occurred against their will.

At the same time the Ministry of National Economy of the Republic of Kazakhstan has an effective administrative tool in the form of the Order of the Minister of Economic Development, the precedent of the use and effectiveness of which was demonstrated in 2016. This order allows local entrepreneurs to carry out delivery of goods to the Republic of Kazakhstan on WTO discounted rates in the absence of a supranational document.

"Department of Economic Integration analyzed and, based upon data of 2016, calculated the minimum amount of savings of entrepreneurs during import of goods from the List at reduced import duties.
In total during 2016 under the WTO rates were imported goods worth more than 400 million USD, representing about 25% of total imports according to trade subheading, where WTO rates are lower than Common Customs Tariff rates within the limits of 1-5%.

Thus, the savings amounted to an average of 400 thousand USD per month for 1347 commodity subheading for 1960 taxpayers, importing goods under the WTO rates.
It should be noted that the presented above savings amount is calculated according to the lower boundary of the interest margin, while for a number of subheadings the percentage difference is above 1%, that is the potential savings amount, in practice, can be much higher", - said the director of the Department of economic integration of NCE RK "Atameken" Dolores Tyulebekova.

In addition, if you count the absence of the possibility of applying reduced rates in January and February of this year, only for newly introduced commodity subheadings the financial losses of entrepreneurs are more than 200 000 US dollars, based on the calculations for 2016.

"Kazakhstani business bears huge losses now due to lack of opportunity to deliver goods by WTO rates, according to the obligations of the Republic of Kazakhstan.

Entrepreneurs have already addressed to us, who because of the lack of a document establishing the WTO rates for 2017, are forced to pay rates in accordance with the CCT, that is much higher than the rates agreed for Kazakhstan in the framework of the WTO. Moreover, some importers are waiting for the entry into force of the Internal Order of MNE or supranational decisions without customs clearance of goods at the rates of CCT. Indeed, the margin of difference in rates is part of the income of business. Now they pay every day waiting for the signing of the Internal Order of MNE, since the process of adopting a supranational document is delayed ", - said the deputy chairman of the Board of NCE Dana Zhunusova.

However, despite the emphasis on the need to support the business of the country, which was made by the President of the Republic of Kazakhstan N.A. Nazarbayev in his Address to the people of Kazakhstan on 31^st of January  2017 "The third Modernization of Kazakhstan: global competitiveness", now the Ministry of National Economy of Kazakhstan occupied the position of a passive player. This translates into a daily substantial financial damage to the domestic business due to unavailability of the WTO reduced rates.

In addition, NCE RK "Atameken" considers it necessary to revise the term of the extension of the draft decisions, amending the list of exceptions – to the date of entry into force of the Decision, without spreading to legal relations arising from 1^st of December 2016, as the retroactive effect of the Decision makes possible imposition of penalties on entrepreneurs due to the obligation of filling an electronic invoice for customs clearance for goods from the list of exemptions.
In this situation, the Kazakhstani business is doomed not only to failure to use legal rights due to lack of the necessary legal framework, but also be penalized for acts that they did not commit.