January 1, the Treaty on the Eurasian Economic Union EAEU has become effective. The Treaty confirms the creation of an economic union that provides for free movement of goods, services, capital and labor and pursues coordinated, harmonized and single policy in the sectors determined by the document and international agreements within the Union.
The Treaty on the EAEU was signed by the Presidents of the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation on May 29, 2014, in Astana. Apart from the three states, the Union members will also include the Republic of Armenia that signed Treaty on Accession to the Union on October 10, 2014 and the Kyrgyz Republic that signed similar Treaty on December 23, 2014.
The Eurasian Economic Union is an international organization for regional economic integration. It has international legal personality.
The Union is to create an environment for a stable development of the Member-States' economies in order to raise the living standards of their population, as well as to comprehensively upgrade and raise the competitiveness of and cooperation between the national economies in the conditions of the global economy.
The EAEU operates within the competence granted by the Member-States subject to the Treaty on the Union, based on the respect to the established principles of international law, including the principles of Member-States' sovereign equality and territorial integrity; based on the respect to the specifics of the Member-States' political order; based on the promotion of mutually beneficial cooperation, equal rights and the Parties' national interests; based on application of the principles of market economy and fair competition.
Governance of the Union is entrusted to the Supreme Eurasian Economic Council (SEEC) comprised of the Heads of the Member-States. The SEEC sessions are held at least once a year. The SEEC structure is formed by the Intergovernmental Council at the level of the Heads of the Governments, the Eurasian Economic Commission and the Court of the Union.
The Supreme Council is the EAEU supreme authority composed by the Presidents of the Union's Member-States.
The Intergovernmental Council is a Union body in charge of strategically important issues of the development of the Eurasian economic integration remained with no consensus when discussed in the Commission Council.
The Court of the EAEU is the Union's court of justice that ensures that the Member-States and the Union's bodies uniformly implement the Treaty on the EAEU and other international agreements within the Union.
The Eurasian Economic Commission is the Union's permanent supranational regulatory body formed by the Commission Council and Commission Board. The Commission's key tasks are to create environment for the Union's operation and development, as well as to develop proposals for economic integration within the EAEU.
The Commission Council includes the Prime-Ministers of the Union's Member-States.
The EEC Board is comprised of its Chairman and Ministers.
Key functional novelties of the Treaty on the EEU as compared to the stages of the CU and SES:
The Treaty on the EAEU secured the Member-States' agreement to pursue a coordinated energy policy and form common energy markets (electric energy, gas, oil and oil products) based on common principles. The document contemplates that such task will be implemented in several stages and completed by 2025: formation of single market of electric power is planned to be completed by 2019, and single market of hydrocarbons—by 2025.
The Treaty on the EAEU determines regulatory treatment of the turnover of pharmaceuticals and medical devices. By January 1, 2016, single market of pharmaceuticals and single market of medical devices (devices for medical purposes and medical equipment) will be created within the Union.
The Treaty establishes new long-term priorities of transport policy in the territory of the Eurasian Economic Union. The parties agreed on a step-by-step liberalization of transport carriages in the territory of the will-be Union, which pertains primarily to motor and railroad transport.
An agreement has been reached on the formation and implementation of a coordinated agricultural policy. It is not insignificant that policies in other areas of integration interaction, including application of sanitary, phytosanitary and veterinary measures to agricultural products, will be pursued in view of the goals, tasks and areas of the coordinated agricultural policy.
The Eurasian Economic Union operation would be unimaginable unless a coordinated macroeconomic policy were pursued, which provides for development and implementation of the Union Member-States' joint activities to achieve a balanced economic development. Subject to the Treaty, key areas of the coordinated macroeconomic policy include formation of single principles of the Union Member-States operation, their efficient interaction and development of common principles and benchmarks to predict the Parties' social and economic development.
To ensure coordinated regulation of financial markets, based on a step-by-step harmonization of the legislations, the EAEU Member-States agreed to establish by 2025 a single supranational body for financial market regulation.
The Treaty on the EAEU presupposes that, as of January 1, 2015, single services market will start operating in a number of sectors determined by the Union Member-States. National treatment will be the basis, i.e. the state will have to adopt full-fledged national treatment of service providers and partner-countries—there can be no restrictions. Later on, the Parties will seek to expand the sectors as much as possible. In particular, by way of a step-by-step reduction of deletions and restrictions, which will undoubtedly strengthen the Eurasian integration project.
Subject to the Treaty on the EAEU, the single services market within the Union shall operate in the sectors approved by the Supreme Council based on the coordinated proposals from the Member-States and the Commission. Based on the Treaty, Decision of the Supreme Eurasian Economic Council dated December 23, 2014 confirmed the lists of services sectors wherein the single market will start operating as of January 1, 2015. At the moment, following the proposals of Belarus, Kazakhstan and Russia, the list of services may include over 40 services sectors (construction services, wholesale/retail trade services, agricultural services, including sowing, processing and crop harvesting, etc.). The list of sectors wherein the rules of the single services market should be followed is subject to a step-by-step and coordinated expansion. In the services sectors where the single services market does not operate, providers and receivers of services are subject to national treatment and most favored nation treatment, and no quantitative or investment restrictions shall be applied thereto.
As of January 1, 2015, single labor market will start operating in the territories of Armenia, Belarus, Kazakhstan and Russia; the freedom of movement of labor will be exercised. The citizens of these states will work in equal conditions: workers from the EAEU Member-States won’t need work permits to work within the Union. Once the common labor market is created, the EAEU citizens will be able to experience directly the benefits of the Eurasian Economic Union. Education degrees will be mutually recognized automatically, starting off January 1, 2015. Taxes on incomes of individuals, the EAEU citizens, will be paid according to the domestic resident rate as of the first days of employment. The EAEU Member-States' citizens will no longer have to fill in migration cards when crossing internal borders between the EAEU countries, unless they exceed a 30 day period of stay from the day of entry. Besides, workers and their family members will be relieved of the obligation to get registered with law enforcement authorities for a period not exceeding 30 days.
Another most important novelty of the Treaty on the EAEU is a possibility to apply national treatment to the citizens of all the four countries in what regards social security, including health care. In each EAEU country all health-care services provided by the state will be equally accessible for all the citizens of the Union countries. (Primarily, free ambulance services are meant).
Regarding pensions, the Treaty on the EAEU contains a commitment to solve the issue of pensions export and crediting of total seniority accumulated in another Union country. At the moment, the EEC, jointly with the Parties, elaborates an Agreement on pension coverage that will become effective after 2015.