Eurasian Economic Union to protect itself from anti-Russian sanctions

The Eurasian Economic Union (EAEU) will find effective mechanisms of protection from anti-Russian sanctions that affect other member states of the association, First Deputy Head of the Russian Government Office Sergei Prikhodko said ahead of the session of the Eurasian Inter-Governmental Council.

"At the previous session of the Eurasian Inter-Governmental Council on July 27 in St. Petersburg, the Eurasian Economic Commission was tasked with analyzing the international practices of using collective measures in response to the actions of a third country," Prikhodko said. "At the upcoming meeting in Minsk [on November 27], the report prepared by the Comission will be considered. On its basis, work will continue on the most effective mechanisms of protection from sanctions and minimizing their impact," he added.

"As the first concrete step, the Russian side proposes to discuss the implementation of Article 40 of Agreement on EAEU 'Response measures to a third party'," Prikhodko continued.

He noted that "the problem of how anti-Russian sanctions impact Russia's economy and consequently other member states of the Union is in the center of attention." "This topic was discussed at sessions of the Supreme Eurasian Economic Council in October 2017 and in May 2018 in Sochi. We think it is important to adopt a systemic approach to this issue," he said.

Transactions in national currencies

The share of transactions in national currencies between EAEU member countries reached 70% in the first half of 2018, Prikhodko continued. "In the first half of 2018, the share of transactions in national currencies between member countries of the Eurasian Economic Union has exceeded 70%. This indicator will further grow if the following factors are present - ensuring macroeconomic and financial stability, creating the common financial market and harmonizing legislative regulation in the financial sphere," he said.

He added that most transactions in national currencies occur in trade with Russia, with Russian ruble being the most popular currency in use.

According to Prikhodko, the possibilities of increasing the share of transactions in national currencies depend on the development of trade relations between EAEU member countries.

Common oil and gas market

The Russian government hopes that all issues pertaining to forming the common oil and gas market in the EAEU will be resolved soon, Prikhodko said.

"One of the main spheres of integrational cooperation of the five countries [EAEU member states - Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia] in energy is forming a common market for oil and oil products, as well as gas," Prikhodko said. "This topic has already become traditional at meetings of heads of government," he added. "We hope that soon no such questions will be left up for discussion," he noted.

Talking about the agenda for the upcoming session, Prikhodko said that heads of government of EAEU member states will discuss financial market concepts. "It should start functioning from 2025, but we are already working on preparing necessary documentation," he added.

The official reminded that Russia chairs EAEU this year. "The Russian side proposed removing hurdles on the Union's internal market as the main priority. At the session, a detailed report of the Eurasian Economic Commission on this issue will be presented. This topic is under special control since different restrictions remain that hamper the normal operation of the Eurasian Union," he said.

Another important topic is the implementation of the digital agenda, Prikhodko said adding that government structures, businesses and individuals are already proposing different initiatives in the sphere of digitalization. "Our task is to create necessary institutional and infrastuctural conditions for the launch of these projects. In particular, we plan to develop a concept of implementing special regimes (regulatory 'sandboxes') in the framework of implementing EAEU's digital agenda," he said.

Expanding EAEU

The official said that no talks are currently held about expanding the Union. "We are currently not talking about expanding the Union," Prikhodko said. He reminded that Russian chairmanship's main priority is to deepen and strengthen integration, particularly when it comes to removing existing hurdles and restrictions on the common market. "EAEU's expansion never was an aim in itself for coutries participating in the integration association," he noted. "The tasks are instead rather pragmatic. We are focusing on those practical benefits that our countries receive from deepening economic integration," the official added.

Prikhodko noted that this includes increasing trade turnover, improving its structure (by boosting the share of high value-added goods), lifting obstacles on the way of movement of capital, services, labor, as well as strengthening the overall social-economic stability in the region. When developing relations with third countries, EAEU "uses a flexible approach and different formats of cooperation," he said. In order to involve other countries that are not interested in becoming an EAEU member for various reasons but still want to receive information about integration processes in the Union, the association created a status of an observer state. Moldova became the first observer state in EAEU.

"If other partners, including among CIS [Commonwealth of Independent States] countries, will demonstrate their interest, we are open for a constructive dialogue," Prikhodko said.