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Legal Regulation of Oil and Petroleum Products Export from the Russian Federation under Intergovernmental Agreements with the EAEU Member States
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Legal Regulation of Oil and Petroleum Products Export from the Russian Federation under Intergovernmental Agreements with the EAEU Member States
Annotation
PII
S231243500028027-7-1
DOI
10.61525/S231243500027977-2
Publication type
Article
Status
Published
Authors
Lev A. Nakonechny 
Occupation: Head of Legal Support for Customs and Tariff Regulation Gazpromneft Expert Solutions, LLC
Affiliation: Gazpromneft Expert Solutions, LLC
Address: Russian Federation, St. Petersburg
Edition
Issue 3
Pages
78-89
Abstract

The article examines in detail the agreements between the Government of the Russian Federation and the other EAEU member states on cooperation in the supply of crude oil and petroleum products. The author reviews different ways of regulating supplies of these goods and current problems of implementing the agreements in practice, as well as disagreements between customs authorities and customs applicants. Based on the analysis of the relevant problems, the author proposes adjustments and updates to the legal regulation of supplies of crude oil and petroleum products to the other EAEU member states. In the author’s opinion, the procedure for official publication of indicative balances and protocols in the Russian Federation (or information on the scope of export of goods stipulated in these documents) should be regulated. Moreover, in order to allow participants of foreign economic activity to plan their economic activities in advance, it is necessary to provide for real-time publication of information on the current state of the possible scope of export of crude oil and petroleum products specified in indicative balances and protocols.

Keywords
energy law, export of energy resources, export of crude oil and petroleum products, EAEU, customs declaration, intergovernmental agreements
Received
15.05.2023
Date of publication
12.10.2023
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9
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116
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1 So far, there is a trend of intensifying legal research in various areas of energy law. Attention should be paid to monographs, educational publications, and doctoral theses. [1] In addition, special features of legal regime of energy resources, including energy resources as objects of foreign trade, are considered. [2] Meanwhile, many issues, such as the international legal regulation of relations on the export of crude oil and oil products, deserve further research for strengthening international energy law order. In the Eurasian Economic Union, in accordance with Article 79 of the Treaty on the Eurasian Economic Union of May 29, 2014 (hereinafter referred to as the EAEU Treaty), the main types of energy resources include electricity, gas, crude oil and petroleum products, for which the member states are gradually building common markets of energy resources.
2 One of the objectives defined in Article 1 of the EAEU Treaty is to ensure free movement of goods, which is also reflected in the term “common (single) market”, which means a range of economic relations within the Union, in which free movement of goods, services, capital, and labor is ensured.
3 The provisions of clause 3 of Article 28 of the EAEU Treaty stipulate that “within the functioning of the internal market in mutual trade of goods the member state shall not apply customs duties (other duties, taxes and charges having equivalent power), non-tariff measures, special protective, antidumping and countervailing measures, except otherwise provided in the EAEU Treaty”.
4 As regards crude oil and petroleum products produced from it, the common markets are currently being formed in stages, taking into account the provisions of the Protocol on the Procedures, Management, Operation and Development of Common Markets for Oil and Petroleum Products, which is Annex No. 23 to the EAEU Treaty.
5 Thus, the Protocol stipulates, inter alia, that bilateral agreements concluded between member states in the field of crude oil and petroleum products supply, assessment and procedure for the payment of export customs duties (other duties, taxes and charges having equivalent effect) shall be valid until the entry into legal force of an international agreement for the formation of common markets of crude oil and petroleum products of the Union (Article 12 of the Protocol).
6 The importance of these goods in mutual trade and their influence on the development of national economies determines the answer to the question about the complexity of the formation of common markets for crude oil and petroleum products.
7 According to the 2016 Report of the Eurasian Economic Commission Barriers, Exemptions and Restrictions of the Eurasian Economic Union, [3] the importance of the energy sector for the EAEU member states’ income and the sensitivity of the economy to energy resources supply, the dynamics of energy prices lead to a large number of exemptions in nascent common market formation.
8 As a result, according to the above Protocol, there are currently the following concluded bilateral intergovernmental agreements in crude oil and petroleum products supply (hereinafter referred to as the Agreements):
9 • The Agreement between the Government of the Russian Federation and the Government of the Republic of Kazakhstan on Trade and Economic Cooperation in the Field of Crude Oil and Petroleum Products Supply to the Republic of Kazakhstan of December 9, 2010. [4]
10 • The Agreement between the Government of the Russian Federation and the Government of the Republic of Belarus on Measures to Regulate Trade and Economic Cooperation in Exports of Crude Oil and Petroleum Products of January 12, 2007. [5]
11 • The Agreement between the Government of the Russian Federation and the Government of the Republic of Armenia on Cooperation in the Field of Supply of Natural Gas, Oil Products and Rough Natural Diamonds to the Republic of Armenia of December 2, 2013. [6]
12 • The Agreement between the Government of the Russian Federation and the Government of the Kyrgyz Republic on Cooperation in the Field of Supply of Crude Oil and Petroleum Products of June 6, 2016. [7]
13 The above Agreements provide for two main ways of regulating the supply of crude oil and petroleum products.
14 The first way is to approve indicative balances and protocols, which determine the scope and nomenclature of domestic consumption of crude oil and petroleum products by another EAEU member state and the scope of mutual supplies of these goods (or only crude oil and petroleum products supplies from the Russian Federation to the EAEU member states).
15 Thus, while the intergovernmental agreements of the Russian Federation with the Kyrgyz Republic and the Republic of Armenia stipulate that the Agreements determine the terms and conditions of supplies from the Russian Federation to these countries, the agreement with the Republic of Kazakhstan stipulates that the subject matter is the scope of mutual supplies of crude oil and petroleum products. Despite the fact that the Agreement between the Russian Federation and the Republic of Belarus does not directly specify the manner in which the supply of crude oil and petroleum products is regulated, it is possible to draw a conclusion about it on the basis of the legal consequences of preparing indicative balances and protocols, i.e., the prohibition to export crude oil and petroleum products from the Russian Federation to the Republic of Belarus except for the scope specified in the indicative balances and protocols, which is directly stipulated in Article 1.1 of the Agreement.
16 Another legal consequence of approving indicative balances and protocols occurs under the Agreements with the Republics of Kyrgyzstan and Armenia, according to which Russia does not collect export customs duties only on the scope of crude oil and petroleum products specified in the indicative balances and protocols. Therefore, there is no prohibition to export crude oil and petroleum products in excess of the indicative balances, and customs duties are payable on such goods exported in excess of the scope stipulated in the indicative balances. At the same time, the Agreement with the Republic of Kazakhstan, which refers to the non-application of export customs duties, in clause 9 of the methodology of counter-supply of crude oil to the Russian Federation for petroleum products imported from the Russian Federation to the Republic of Kazakhstan, establishes the right of Kazakhstan to refuse to supply crude oil and petroleum products in excess of the scope authorized by the indicative balance of petroleum products, after notifying Russia of this decision.
17 And this, perhaps, is the point, where we face the first and most important problem of the first way of regulating crude oil and petroleum products supply: the procedure for customs applicants exporting crude oil and petroleum products to receive information on (i) the content of indicative balances and protocols for the next year, (ii) the status of scope of indicative balances and protocols in the current year, (iii) the refusal of the EAEU member states to supply goods in excess of the scope authorized in indicative balances, since there is no procedure for disclosure of this information, which directly affects the rights and legitimate interests of participants of foreign economic activity engaged in the export of crude oil and petroleum products to the EAEU member states.
18 Meanwhile, according to clause a) of Article 2, Article 3 and Article 30 of Federal Law No. 101-ФЗ on International Treaties of the Russian Federation of July 15, 1995, indicative balances and protocols can be considered as documents signed by representatives of the Russian Federation and another EAEU member state and regulated by international law, in particular, by the Agreements, subject to publication in official editions.
19 The above provisions of the Federal Law are a consequence of the principle formalized in Part 3 of Article 15 of the Constitution of the Russian Federation, according to which “...any regulatory legal acts concerning human rights, freedoms and duties of man and citizen may not be used, if they are not officially published for general knowledge”.
20 It is logical to conclude that this requirement also applies to international treaties, including interdepartmental indicative balances and protocols stipulated in agreements, since the Constitution of the Russian Federation is the supreme regulatory legal act in the legal system of the country and international treaties are a part of the legal system.
21 The Plenum of the Supreme Court of the Russian Federation in its Ruling No. 5 of October 10, 2003, [8] also offers the courts to apply only published treaties: “In the context of Parts 3 and 4 of Article 15 of the Constitution of the Russian Federation and Part 3 of Article 5 of the Federal Law on International Treaties of the Russian Federation, the courts may directly apply those international treaties that have entered into force and have been officially published in the Corpus of Legislative Acts of the Russian Federation, in the Bulletin of International Treaties or posted on the Official Internet Portal of Legal Information (www.pravo.gov.ru) in the manner prescribed by Article 30 of the above Federal Law. Interdepartmental international treaties of the Russian Federation shall be published by decision of federal executive authorities or authorized organizations, in whose name such treaties are concluded, in the official editions of these bodies”.
22 Similarly, the Plenum of the Supreme Commercial Court of the Russian Federation in its Ruling No. 8 of June 11, 1999, [9] states that “the Commercial Court shall apply valid and duly published international treaties of the Russian Federation being international legal agreements concluded in writing by the Russian Federation with one or more foreign states or with an international organization, either in one or in several related documents, whatever the same may be called”.
23 In addition, the Supreme Commercial Court in Ruling of the Presidium No. 1851/02 of May 15, 2002, has already indicated the possibility of applying only officially published agreements in relation to the Agreement between the Government of the Russian Federation and the Government of the Kyrgyz Republic on the Principles of Collecting Indirect Taxes in Mutual Trade of October 10, 2000: “Invalidating customs requrement No. 1-в of February 15, 2001, the Commercial Court based its decision on the fact that the Agreement was not published in the prescribed manner when it was submitted by customs and therefore it could not serve as a basis for collecting VAT on imports of goods from the Kyrgyz Republic”.
24 Therefore, the above provisions of the Federal Law on International Treaties of the Russian Federation and the Constitution of the Russian Federation are equally applicable to the indicative balances and protocols adopted under the Agreements that allow the export of goods without customs duties or require the payment of customs duties or prohibit the export of goods by customs applicants, and thus have a direct impact upon the rights and obligations of the participants of the said entities engaged in the export of crude oil and petroleum products.
25 Failure to publish indicative balances and protocols creates legal uncertainty for participants in foreign economic activity: whether customs duties are payable on goods intended for supply to the EAEU member states, or whether it is permissible to supply goods in the quantities specified by the customs applicant (and if not permissible, “in which quantities is it possible?”), or whether such supply is not prohibited at all.
26 In accordance with Ruling No. 16-П of the Constitutional Court of the Russian Federation of November 11, 1997, [10], the tax payment in the context of Article 57 of the Constitution of the Russian Federation should be considered as a payment, which at the same time has the following features:
27 - It is a monetary form of alienation of property on the basis of statutory provisions in order to secure the expenses of the public authority;
28 - It is carried out on the basis of the principles of obligation, irrevocability, and individual gratuitousness;
29 - Such payment is transferred to a special budgetary fund.
30 According to the position repeatedly expressed by the judicial authorities both on tax payments [11] and customs payments [12] (since the latter, according to the above opinion of the Constitutional Court of the Russian Federation, have the features of tax payments), for the purpose of planning economic activities, including foreign economic activities, customs applicants should know in advance the composition and content of their fiscal obligations so that they can consider the related expenses beforehand within the cost of economic activities.
31 Fiscal charges should not be sudden. Nor should prohibitions and restrictions on foreign economic activity.
32 Ignorance of participants of foreign economic activity as to the status of indicative balances prevents bona fide participants of foreign economic activity from understanding the obligations to pay customs duties and, therefore, violates the constitutional principle of stable legal conditions of economic management as per Articles 8 (Part 1), 34 (Part 1), 35 and 57 of the Constitution of the Russian Federation (Determination of the Constitutional Court of the Russian Federation No. 111-O of July 1, 1999).
33 Although economic freedom does not guarantee a certain result of economic activity, it nevertheless implies protection from risks associated with arbitrary decisions and actions of public authorities that violate the existing conditions of economic activity and do not allow business entities to timely adapt to new conditions.
34 Indicative balances, protocols and decisions of the participating states on refusal to move goods determine the content of the rights of business entities and their obligations to pay customs duties. They are directly integrated into public law relations and cannot show their effect other than the legislative acts on taxes and duties.
35 According to the author of the article, it is necessary to regulate the procedure for official publication of indicative balances and protocols in the Russian Federation (or information on the scope of export of goods stipulated in these documents). In addition, it is necessary to provide for real-time publication of information on the current state of possible scope of export of crude oil and petroleum products stipulated in indicative balances and protocols, so that participants of foreign economic activity could plan their business and production activities in advance.
36 The fact that the authorities of the Russian Federation have made attempts to publish the relevant information further confirms the validity and expediency of this approach to disclosure:
37 - Information on duty-free supplies of energy resources to Abkhazia, South Ossetia, Tajikistan, Armenia, Kyrgyzstan and Kazakhstan for 2021 [4] and 2022 [5] posted on the website of the Ministry of Energy of the Russian Federation;
38 - Information on the declared scope of duty-free supplies of energy resources under indicative balances and protocols for 2022 in accordance with intergovernmental agreements [15] posted on the official website of the Federal Customs Service of the Russian Federation in the Customs Statistics section.
39 However, it should be noted that as of 2023 the website of the Ministry of Energy has no information on the duty-free scope of energy resource supplies for 2023, including to the Republic of Belarus. Besides, the information on the declared scope as of March 1, 2022 was posted once on the website of the Federal Customs Service of the Russian Federation, and currently this section is not updated.
40 With regard to the refusal of the EAEU member states to supply goods in excess of the scope authorized in indicative balances, the author believes that it is necessary to introduce the procedure for official publication of this refusal in the Russian Federation, since it affects the rights and obligations of Russian citizens and organizations. It is also necessary to introduce the procedure for introduction into force of this refusal in the Agreements. As part of such entry into force of the refusal, it is necessary to take into account the general approach, which means that it should not affect earlier legal relations. Thus, as a condition for not extending the refusal to earlier legal relations, it is possible to use the approach previously formalized in Resolution of the Government of the Russian Federation No. 1392 on Imposing Temporary Quantitative Restrictions on the Export of Certain Types of Sulphur and Amending Certain Acts of the Government of the Russian Federation of August 6, 2022, or Resolution of the Government of the Russian Federation No. 2353 on Imposing Temporary Quantitative Restrictions on the Export of Certain Types of Fertilizers of December 20, 2022, which stipulates that these Resolutions shall not apply to goods released under customs procedures allowing for export of such goods from the customs territory of the Eurasian Economic Union (in this case, from the territory of the Russian Federation) and if, prior to the date of adoption of the respective restriction, there is an order for loading on a sea vessel or if they are accepted by Russian Railways Open Joint-Stock Company (or another carrier) for transportation. The problems arising from the application of conditions similar to the above Government Resolutions, i.e., such conditions do not take into account the provisions of clause 3 of Article 7 of the EAEU Customs Code, will not occur in this case, since the possibility of temporary periodic declaration of the Agreement is limited. The author reminds that if two or more goods declarations are submitted (which corresponds to the provisions of Article 102 of Federal Law No. 289-ФЗ on Customs Regulation in the Russian Federation and on Amendments to Certain Legislative Acts of the Russian Federation on Temporary Periodic Declaration), prohibitions and restrictions, measures of customs tariff regulation, protection of the domestic market, as well as other legislative acts of the EAEU member states on taxation apply on the day of registration of the first goods declaration (in this case, a temporary customs declaration).
41 It should also be noted that the Agreements with the participation of the Russian Federation stipulate no obligation on the part of the authorized bodies of the Russian Federation and the EAEU member states to draw up indicative balances and protocols covering the whole range of crude oil and petroleum products. In this regard, one should be guided by the approach that goods for which indicative balances have not been signed and adopted are not exempted from export customs duties (the Agreements with the Kyrgyz Republic and the Republic of Armenia) or their export is prohibited. This approach is formalized in the court practice, in particular, in cases No. A40-171938/15 and A40-43744/16, [16] where the courts have determined that the goods classified in the disputed commodity sub-items of the unified Commodity Nomenclature of Foreign Economic Activities of the EAEU (hereinafter referred to as the EAEU CN of FEA) are not included in the list of goods supplied according to the indicative balances approved under the Agreement between the Russian Federation and the Republic of Armenia, and therefore there are no grounds for extending the exemption from customs duties to the goods exported by the customs applicant. Similarly, the courts interpret the situation when the indicative balances for the current year are adopted on the basis of the year-end results: consequently, customs duties are payable on goods that were exported during the year, but were not included in the indicative balances (see cases No. A46-14830/2018 and A55-17543/2018).
42 At the same time, Article 3 of the Agreement between the Russian Federation and the Republic of Kazakhstan provides for exemption from customs duties in mutual trade in crude oil and petroleum products, but does not link this exemption to the scope determined by the indicative balances. In this respect, it seems permissible to apply the exemption even to goods that are not included in the indicative balances.
43 The second way to regulate the supply of goods under the Agreements (in addition to the indicative balances and protocols) is to determine the list of goods that are prohibited or restricted for export. In practice, only the Agreement between the Russian Federation and the Republic of Kazakhstan has such a mechanism.
44 Thus, in accordance with Article 6.1 of the Agreement between the Russian Federation and the Republic of Kazakhstan, the protocol drawn up on May 6, 2019, between the Ministry of Energy of the Russian Federation and the Ministry of Energy of the Republic of Kazakhstan approved the list of petroleum products prohibited or restricted for export from the Russian Federation to the Republic of Kazakhstan and the list of petroleum products prohibited or restricted for export from the Republic of Kazakhstan outside the customs territory of the EAEU.
45 In addition to the fact that the above protocol establishes a list of goods, indicating the EAEU CN of FEA code and the name of the goods, it also establishes fixed quantitative exceptions to it, within which the duty-free supply of petroleum products is allowed (Notes 2, 3 and 5 use the wording “in the scope of up to X thousand tons per year”). Taking into account the fact that Note 4 to the list establishes an exception for residual oil supplied to the Republic of Kazakhstan to meet the needs of Baikonurenergo Industrial and Energy Association SUE in the amount specified in the indicative balances, it seems consistent to conclude that the scope specified in Notes 2, 3 and 5 are fixed for each year and do not need to be formalized in the scope of the indicative balances.
46 It should also be noted that the above problem of the lack of officially published information on the status of amounts of goods for export in the current year also applies to the current status of sampling of fixed amounts of exceptions according to the list.
47 Although according to Note 1 to the list, for the purposes of application of this list the goods are defined exclusively by codes in accordance with the unified EAEU CN of FEA, and the name is given only for convenience of use, one cannot but pay attention to the fact that Note 5 establishes an exception for a specific name of the goods, “oil tar”, without specifying its EAEU CN of FEA code. At the same time, the content of the term “oil tar” is not defined by the EAEU CN of FEA, notes and explanations to it, interstate standards, and the Agreement with the Republic of Kazakhstan.
48 The Chemical Encyclopedia [17] defines tar as follows: tar (in Russian “гудрон” from French “goudron”) is “a residue formed as a result of distillation of fractions boiling up to 450–600°C (depending on the type of crude oil) from crude oil at atmospheric pressure and under vacuum. Tar is a viscous liquid or solid asphalt-like product of black color with shiny fracture. It contains paraffin, naphthenic or aromatic hydrocarbons (45–95%), asphaltenes (3–17%) and oil resins (2–38%). Depending on the type of crude oil and the degree of extraction of gas oil fractions, the density of tar is from 0.95 to 1.03g/cm3. It is used for the production of road, roofing and construction bitumen, high carbon coke, lubricating oils, combustible gases and motor fuels”.
49 Article 181 of the Tax Code of the Russian Federation has a slightly different value for tar density: more than 930 kg/m3.
50 At the same time, in the national standard of the Republic of Kazakhstan ST RK No. 3337-2018 tar is a residual product of vacuum and/or atmospheric-vacuum distillation of crude oil, petroleum products and/or unstable gas condensate, as well as heavy residues of catalytic cracking. According to the ST RK, it should comply with the physical and chemical value of density from 940 to 1,050 kg/m3, as well as other values not specified in the above documents.
51 In addition to the ambiguity of the content of the term “tar” resulting from the above, it is necessary to take into account the problematic distinction of the said goods from oil bitumen (commodity code 2713 20 000 0 of the EAEU CN of FEA), which, according to the explanatory notes to commodity item 2713 of the EAEU CN of FEA, is also usually obtained in the form of a residue from the distillation of crude oil.
52 Volume 6 of the Explanatory Notes to the EAEU CN of FEA [18] provides a definition of “oil bitumen”. It is a product with the following characteristics:
53 1) Setting point determined by the ASM D 938 method, equivalent to the ISO 2207 method, is no less than 30°C;
54 2) Density is no less than 0.942g/cm3 at 70°C according to EN ISO 12185; and
55 3) Penetration index (needle method) at 25°C determined according to the EN 1426 method is less than 400.
56 In this regard, if the residue from the distillation of crude oil meets the characteristics specified for bitumen, then in terms of CN of FEA, it will be “bitumen” and will have commodity code 2713 20 000 0 of the EAEU CN of FEA, and if its physical and chemical characteristics differ from the above (at least one: setting point, density, or penetration), then the product should have another code 2713 90 900 0 of the EAEU CN of FEA and should be defined as “tar”.
57 The need to distinguish between bitumen and tar is also due to the fact that the product “oil bitumen” with code 2713 20 000 0 of the EAEU CN of FEA is completely prohibited for export from the Russian Federation to the Republic of Kazakhstan according to the above list.
58 In the opinion of the author, the above ambiguity of the term “tar” should be resolved in the following manner:
59 • Specification of the physical and chemical characteristics of the product “tar” in exception 5 to the list;
60 • Adoption by the Russian Federation and the Republic of Kazakhstan of a single interstate standard defining the physical and chemical characteristics of tar;
61 • Adoption by the Eurasian Economic Commission of a decision on how to classify tar specifying the physical and chemical characteristics of tar.
62 Reviewing the ways of regulating the supply of crude oil and petroleum products to the other EAEU member states and the problems arising in this regard, we note that the agreements with the Kyrgyz Republic, the Republics of Armenia and Kazakhstan stipulate that goods of group 27 of the unified EAEU CN of FEA are subject to customs clearance in the Russian Federation for accounting purposes as if exported outside the customs territory of the Eurasian Economic Union. The agreement with the Republic of Belarus provides for specific commodity items, subitems and codes of the EAEU CN of FEA. Goods classified under such codes are subject to customs clearance.
63 As a general rule, customs duties are levied on customs operations related to the release of goods by customs authorities (Article 37 of Federal Law No. 289-ФЗ on Customs Regulation in the Russian Federation and on Amendments to Certain Legislative Acts of the Russian Federation of August 3, 2018).
64 Despite the fact that all the Agreements state that the parties in mutual trade shall not apply customs duties to amounts defined by indicative balances and protocols, there is no direct reference in the Agreements to exemption from customs duties for customs clearance operations.
65 At the same time, Resolution No. 529of the Government of the Russian Federation of July 1, 2011, is in effect, which was adopted before the Agreement was supplemented with provisions on the need to declare goods of group 27 and which provides for the need to declare the goods supplied to the EAEU member states classified under EAEU CN of FEA codes 2709 00, 2710, 2711, 2712 (with the exception of codes 2712 90 110 0, 2712 90 190 0), 2713 11 000 0, 2713 12 000 0, 2713 20 000 0–2713 90 900 0, as if these goods were exported from the Russian Federation outside the customs territory of the Eurasian Economic Union without payment of customs duties for customs operations.
66 Although at present customs authorities do not collect customs duties for customs operations from customs applicants exporting goods of group 27 of the EAEU CN of FEA classified under CN of FEA codes other than those specified in the above Resolution of the Government, it seems reasonable to eliminate this legal deficiency by making appropriate adjustments to the Resolution of the Government in order to extend its effect to all goods of group 27 of the EAEU CN of FEA specified in the Agreements. As a result, customs applicants currently face the risk that customs authorities may demand payment of customs duties not only for upcoming shipments, but also for shipments already made (within the period of customs control, of course) in respect of goods not specified in the Resolution of the Government, but included in group 27 of the EAEU CN of FEA and exported to the EAEU member states.
67 It should also be noted that currently most of the Agreements, with the exception of the Agreement between the Russian Federation and the Republic of Kazakhstan (which is pending ratification of the relevant amendments by the state authorities of the Republic of Kazakhstan), limit the possibility of applying temporary periodic customs clearance to petroleum products.
68 Temporary periodic customs clearance, according to Article 102 of Federal Law No. 289-ФЗ on Customs Regulation in the Russian Federation and on Amendments to Certain Legislative Acts of the Russian Federation of August 3, 2018, means that in situations when it is not possible to provide precise information on the quantity and/or customs value of goods when exporting them, it is possible to first submit a temporary customs declaration and after the actual export of goods a full customs declaration. Thus, according to Ruling of the Presidium of the Supreme Commercial Court of the Russian Federation No. 4574/08 of July 8, 2008, and Determination of the Constitutional Court of the Russian Federation No. 631-0-0 of November 7, 2008, the procedure for temporary periodic customs clearance is a single scope of legal relations between customs authorities and customs applicants, where customs applicants submit both temporary and full customs declarations to customs authorities.
69 According to information published in open sources, the need to cancel temporary periodic customs clearance was explained by A. Bondarenko, Deputy Minister of Energy of Russia:
70 “The cancellation of temporary periodic customs clearance is necessary to ensure the dynamics of deliveries when exporting goods from the Russian Federation.
71 Under the old system, a company could declare the entire permitted volume of goods deliveries, but not export them in full, which prevented the Russian Federation from fulfilling its obligations under the intergovernmental agreement.
72 A similar model of customs regulation already exists for the export of goods to Belarus, Kyrgyzstan, Tajikistan, Armenia, as well as South Ossetia and Abkhazia”. [19]
73 Taking into account that temporary periodic clearance does not provide for the obligation of the customs applicant to export the quantity of goods declared in a temporary declaration, but only restricts the possibility of exporting a larger quantity of goods, the relevant statements and the necessity of the adopted amendments to the Agreements seem reasonable, since they are aimed at limiting the possibility for customs applicants to abuse their rights (without actually exercising them in terms of movement of goods) to the detriment of the interests of other business entities.
74 It is necessary to pay attention to another question: do the Agreements allow transportation of goods from the Russian Federation to third countries through the territory of the Republic of Belarus and/or the Republic of Kazakhstan, if the import of such goods from the Russian Federation to these EAEU member states is prohibited?
75 It seems that the answer to this question is to be found in the purpose of the Agreements under consideration and the prohibitions and restrictions established by them. As already mentioned above, these Agreements are concluded in order to regulate trade and business cooperation in the supply of crude oil and petroleum products from the Russian Federation to these EAEU member states due to the high degree of influence of these energy resources on the development of the national economies of the EAEU member states. In this regard, indicative balances and protocols are prepared, taking into account the production and consumption of crude oil and petroleum products in the territories of these EAEU member states.
76 At the same time, transportation of energy resources from the Russian Federation through the territories of the other EAEU member states does not affect the balance of trade, production and consumption of such goods in the EAEU member states. Therefore, it seems acceptable and correct to assume that the prohibitions and restrictions on the import of goods into the EAEU member states established by the Agreements do not apply to goods exported from the Russian Federation to third countries through the territory of such EAEU member states.
77 In the author’s opinion, the same approach should be applied to the issues of transportation of goods from the Russian Federation to the Russian Federation through the territory of the EAEU member states. The relevance of this issue has to do with geographical and logistical peculiarities, when in certain cases there are logistical and economic reasons for this kind of transportation of goods. Of course, it is advantageous for all parties involved in such transportation of goods, as it increases the economic efficiency of such transportation for Russian business entities and uses the transport infrastructure of the other EAEU member states.
78 The current wording of the customs transit procedure does not allow its application to goods transported under this procedure (Article 142 of the Customs Code of the EAEU). Thus, this Article stipulates that the customs transit procedure may be used for transportation of goods from one part of the EAEU through the territory of other states that are not members of the EAEU. However, in this case it is a question of transportation of goods from one EAEU member state through the territory of another EAEU member state to the territory of the same EAEU member state.
79 Taking into account the impossibility for customs applicants to apply for the customs transit procedure and the wording of the Agreements on the necessity to declare the export of all goods of group 27 of the unified EAEU CN of FEA from the Russian Federation to the other EAEU member states, it seems appropriate to supplement the Agreements with a reference that their provisions do not apply to relations in crude oil and petroleum products supplies carried out by one party through the territory of the state of the other party to third countries or back to the territory of the first party.
80 This addition at the level of the Agreements seems necessary to ensure a uniform understanding and application of the provisions of the Agreements both by the customs authorities of the Russian Federation and by the customs and other state authorities of the other EAEU member states.
81 Another problematic issue that the author proposes to consider is the export of petroleum products as supplies to the other EAEU member states. The peculiarity of the export of supplies from other goods exported without the obligation of reverse import is that supplies are necessary for the operation of the vehicle and are consumed in the process of vehicle movement.
82 At present, there is a divergence of practice as to whether the Agreement applies to petroleum products exported as supplies, in particular, whether it is necessary to declare such goods classified under group 27 of the unified EAEU CN of FEA. And while the Agreement with the Republic of Belarus contains a reservation that goods exported as supplies are not subject to customs clearance, the Agreements with the Republic of Armenia and the Kyrgyz Republic do not contain such a reservation. Amendments to the Agreement with the Republic of Kazakhstan on the exclusion of supplies from the scope of the Agreement have been prepared and are awaiting ratification by the state authorities of the Republic of Kazakhstan. [20]
83 Thus, the first approach suggests that the Agreements cover supplies, as crude oil and petroleum products classified under commodity group 27 of the unified Commodity Nomenclature of Foreign Economic Activities of the Eurasian Economic Union (hereinafter referred to as the EAEU CN of FEA) are subject to customs clearance in the Russian Federation for accounting purposes as if they were exported outside the customs territory of the Eurasian Economic Union (Ruling of the West Siberian District Commercial Court of June 15, 2020, in case No. A27-18102/2019, Ruling of the West Siberian District Commercial Court of March 17, 2020, in case No. A27-16974/2019). A similar opinion is also supported by the Ministry of Finance of the Russian Federation, which points out that the Agreements do not provide for any exceptions to the customs clearance of supplies. [21] In the opinion of the Ministry of Finance of the Russian Federation, the Agreements do not provide for exemptions in respect of supplies from the current regulation of Article 12 of Annex 23 to the Treaty on the Eurasian Economic Union of May 29, 2014, which stipulates that until the international treaty on the formation of common markets for crude oil and petroleum products of the EAEU comes into force, bilateral agreements concluded between the EAEU member states in respect of supplies of crude oil and petroleum products, as well as in the areas of determination and procedure for payment of export customs duties, are valid.
84 Taking a different approach, the courts examined the essence of the Agreements in question and concluded that the Agreements were entered into for the purpose of regulating trade and business cooperation and determine the terms of mutual supplies of crude oil and petroleum products in accordance with agreements (contracts) between business entities, and there are no grounds for extending their provisions on the necessity of customs clearance of supplies that are not exported for consumption in another state (are on board a vehicle in the amounts necessary for its operation and are not the subject of a foreign trade transactions) (Ruling of the West Siberian District Commercial Court of September 28, 2021 in case No. A45-32112/2020). The courts noted that the regulation in clause 4 of Resolution No. 529 should be applied to the extent that it does not contradict international treaties (the Treaty on the EAEU and the Agreement between the Russian Federation and the Republic of Kazakhstan), and the latter do not provide for exceptions to the general rule of free movement of vehicles (including aircraft) within the customs territory of the Eurasian Economic Union, inter alia, there is no indication that petroleum products needed for air, water or road transport movement are subject to clearance within the territory of the Eurasian Economic Union. Air transportation does not involve any foreign trade contracts, nor does it involve supplies of crude oil and petroleum products to the other EAEU member states, including the Republic of Kazakhstan. The refueling of aircraft on the territory of the Russian Federation and the subsequent consumption of fuel during the flight do not fall within the scope of the Agreement and should not be qualified as transportation of goods. According to the provisions of clause 49 of Article 2 of the Customs Code of the EAEU, the concept of a vehicle includes the vehicle itself, including aircraft, as well as spare parts, accessories, equipment, fuel and lubricants in the built-in fuel tank.
85 Despite the fact that the latter approach of the courts seems to be more reasonable, since the exported supplies do not and cannot affect the balance of production and consumption of the other EAEU member states, as they do not enter the domestic market of these countries, there is currently no uniform approach in the practice of customs authorities: some customs authorities refuse to release the goods on the basis of submitted customs declarations on the grounds that there is no need for customs clearance and there is a need for submission of statistical forms in respect of petroleum product supplies, while others insist on the need to declare such goods as if they were exported outside the customs territory of the EAEU. This problem seems to be solvable either by spreading and formalizing in court practice of a unified approach to the absence of the need for customs clearance of supplies, or by amending Resolution No. 529 of the Government of the Russian Federation of July 1, 2011, to establish that crude oil and petroleum products exported as supplies to the other EAEU member states are not subject to customs clearance.
86 In conclusion, the author draws attention to the fact that in accordance with the program on the formation of common markets for crude oil and petroleum products of the EAEU, approved by Decision of the Supreme Eurasian Economic Council No. 23 on the Formation of Common Markets for Crude Oil and Petroleum Products of the Eurasian Economic Union of December 6, 2018, one of the tasks is to eliminate quantitative restrictions and export customs duties (other duties, taxes and levies of equivalent value) in the trade of crude oil and petroleum products between the member states.
87 Thus, despite the fact that the Agreements under consideration are a temporary and transitional measure until such restrictions are removed, in the current conditions of 2023 the development, clarification and substantive interpretation of the provisions of the Agreements by law enforcement agencies are of particular importance, as they allow to meet the emerging needs in the export of energy resources, and for producers and suppliers of energy resources from the Russian Federation to properly plan their business and production activities.

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