United Nations ECE/CTCS/2017/5 Economic and Social Council Distr.: General 29 March 2017 English Original: English and Russian only Economic Commission for Europe Steering Committee on Trade Capacity and Standards Third session Geneva, 12-13 April 2017 Item 5 (b) of the provisional agenda Country follow-up to ECE studies on regulatory and procedural barriers to trade Report on implemented and planned reforms for removing regulatory and procedural barriers to trade as per ECE’s recommendations: The Republic of Kazakhstan Submitted by the Government of the Republic of Kazakhstan Summary The Government of the Republic of Kazakhstan is implementing reform measures for removing regulatory and procedural barriers to trade identified in ECE’s joint study with the International Trade Centre, which was carried out in 2012. The reform measures follow closely ECE’s recommendations, as articulated in Part I of the study. The Government wishes to brief the Steering Committee on Trade Capacity and Standards on achievements to date in implementing the recommendations. This document is presented to the Steering Committee for decision. GE.17-05024(E) ECE/CTCS/2017/5 I. Introduction 1. Non-tariff measures (NTMs) have come to play a prominent role in determining the flow of goods and services across the globe. This increased importance is mainly due to the continuous reductions in import tariffs within the context of negotiations under the multilateral trading system negotiations. Regional trade agreements constitute another factor, especially those envisaging duty-free access among member countries. 2. NTMs could have a negative impact on trade flows, especially on the export side, by rendering it more difficult for enterprises to access new markets and/or diversify their products. In such situations, NTMs result in restrictive non-tariff barriers (NTBs), which undermine trade and economic development. 3. ECE, together with the International Trade Centre, conducted a study on regulatory and procedural barriers to trade in the Republic of Kazakhstan in 2012. The study identified non-tariff barriers and other obstacles to trade at the most detailed level – by products and by trade partner. 4. The study was based on a comprehensive evaluation methodology, which included questionnaires targeting traders and government agencies involved in supporting foreign trade. It covered main export sectors, including metals and primary metal products, chemicals, non-electric equipment, agriculture and the food industry, wearing apparel, furniture, and transport equipment; all of which are leading industrial sectors. 5. As a result of the assessment, ECE presented practical recommendations that were implemented at both the national level and the regional level of the Eurasian Economic Union (EAEU). Generally, this study was of great help during the elaboration and planning of legislative amendments, including those pertaining to the simplification of procedures throughout the international supply chain: improvement and further automation of the system of permits, improvement of the customs administration system, wider application of risk management in customs operations, and the harmonization of technical requirements and regulations throughout the EAEU territory. 6. This report provides an overview of key reform measures in the Republic of Kazakhstan aimed at eliminating the non-tariff trade barriers identified in the study. 7. It is worth mentioning that the Government attaches great emphasis to the consolidation of a favorable business environment, which is reflected in Kazakhstan’s improved ratings against World Bank's Doing Business indicators and the World Economic Forum (WEF) Global Competitiveness Index. II. Trade facilitation 8. The coming period will see improved trade facilitation conditions, which will be brought about by the new Customs Code of EAEU that will enter into force on 1 July 2017 to replace the 2009 Customs Code of the Eurasian Customs Union. The new Code is meant to set the foundation for transiting towards uniform customs regulations and procedures in the EAEU territory. 9. The new Code includes novel approaches to automating customs operations and introduces streamlined processes for governing the interaction between the business community and government agencies; all of which minimize paperwork and physical contact with customs officials. The new Code also stipulates comprehensive harmonization of all customs operations between EAEU members. 2 ECE/CTCS/2017/5 10. Upon the new Customs Code entry into force, the Eurasian Economic Commission will be defining the value and volume ceilings for duty-free access into the EAEU territory. Such ceilings will be adopted by all member States. Member States can, at their own discretion, set lower national duty-free ceilings for duty-free import of goods from foreign online stores as well as goods transported by express carriers into the EAEU territory 11. The main features and objectives of the EAEU Customs Code are summarized below: (a) The EAEU Customs Code is focused on promoting electronic data interchange, with priority given to consolidating an electronic customs declaration system. Customs declarations in hard copies will be only requested in exceptional cases. (b) Possibility for automating all customs operations starting with the registration of customs declaration and ending with the release of goods without customs officer participation. (c) Possibility of submitting electronic customs declarations without the support documents. “Customs authorities can request traders to submit support documents only if the risk management system reveals certain risks and submission of documents is meant to either confirm or refute the risk”. (d) The authorized economic operator scheme has been considerably improved. (e) The Code envisages comprehensive harmonization of the transit procedure (conditions for placing goods under this procedure, associated administrative procedures, responsibilities of carriers and other provisions). (f) The Code contains provisions for reducing customs control over conditionally released (preferential) goods. According to the Code, customs control over all conditionally released goods imported before 1st of July 2010, including goods used in subsurface operations will be terminated. These goods, which are under customs control and cannot be sold without payment of previously granted benefits, will be recognized as EAEU goods. (g) The new Code envisages the possibility of submitting advance notification, in the form of e-documents with digital signature, for: • Notice of Arrival; • Placing goods in temporary storage under customs supervision; • Transit declaration; • Declaring imported vehicles. In these cases, the carrier submits the e-documents to Customs only once, and subsequently the documents can be used for all customs operations. The Code contains provisions that allow using information by other border control agencies for expediting control operations. (h) Another improvement is the possibility of filling in (drawing up) customs declarations by the Customs authority without involving customs brokers. It is planned that Customs authorities will perform the whole range of customs services, including filling in customs declarations. This gives traders the possibility to choose between Customs and brokers, leading to considerable cost reductions. (i) Another measure for simplifying administrative procedures involves allowing traders to defer payment (possibility of payment in installments) of customs duties and taxes on imports: 3 ECE/CTCS/2017/5 • Release of goods with differed payments of up to 1 month is possible – for all traders, if a guarantee is presented and interest accrued during the period of delay is paid; • Release of goods with differed payments of up to 6 months is possible – without paying interest in exceptional cases – when importing goods intended for responding to humanitarian crisis such as natural and man-made disasters as well as unforeseen crisis, in case of delays in budget funding, support of agricultural activities, etc. (j) The draft Code envisages the possibility of selling goods in duty-free shops to nationals from EAEU member states traveling within the EAEU territory to another EAEU member state. Such practice is widely used in EU duty-free stores – the dual pricing system. This amendment is needed to develop duty-free trade and is aimed at expanding shopping options for individuals. (k) As far as the statutory terms for completing customs clearance is concerned, the existing Customs Code of the Customs Union sets a time frame of 1 working day. To expedite customs operations, the draft Customs Code of EAEU reduces this time frame to 4 hours from the moment of submitting the customs declaration. Besides, work is underway to implement post clearance control. 12. Therefore, preparation of the draft Customs Code of EAEU is done in a comprehensive manner and is aimed at improving and modernizing customs operations in the EAEU. In addition to the benefits that will be brought about by the new Customs Code, the past few years have seen the implementation of a number of reforms with direct positive impact on trade facilitation conditions in the country. Below is a brief summary of these reforms. A. Customs clearance and documentary requirements 13. A series of reform measures have been implemented in the area of customs administration to create a modern, transparent, and predictable system and speed up customs clearance. 14. In order