Belarus begins the new year hoping to quickly resolve current uncertainty in relations with Russia. Problems began a year ago when the President and the Government of Belarus raised the issue of compensation for losses to the Belarusian budget due to a Russian tax manoeuvre as well as the issue of elimination of barriers in the EAEU market. The initial discussion later evolved into a controversy about the level of integration with Russia (Belarus and Russia are members of the Treaty on Creation of a Union State concluded in 1999 which for the most part remains unimplemented for the last 20 years).
Throughout 2019, Belarus and Russia negotiated on deepening integration, as a result of which 31 roadmaps were prepared in such areas as tax and industrial policy, plus electricity.
Negotiations with Russia and lack of understanding about the consequences of further convergence between the two countries has caused significant resonance in Belarusian society. Despite reassuring comments from the working groups that the roadmaps do not provide for political integration, lack of published texts of the roadmaps as well as news about possible unification of the Tax and Civil Codes of the two countries fuel fears about the threat to the sovereignty of Belarus. According to previous comments, all open issues are to be resolved at the beginning of 2020. Hence we expect details of integration to become clear and that uncertainty will soon be eliminated.
Against the backdrop of the crisis in relations with Russia, the President of Belarus approved the forecast for the country’s social and economic development for 2020, which forecast 2.8% GDP growth, whereas World Bank experts lowered their forecasts of economic growth for Belarus in 2020 from 1.8% to 0.9%.
The good news is the National Bank’s plan to conduct monetary policy in inflation-targeting mode, with the inflation rate not exceeding 5%. In addition, the National Bank plans to further diversify and strengthen the structure of the financial market as well as continuing to decrease dependence of the economy on foreign currency.
Meanwhile, the new Belarusian Parliament got to work. At present, it is considering bills «On Changing the Laws on Advertising», «On Changing the Law of the Republic of Belarus «On Medicines», «On Introducing Additions and Amendments to Some Laws of the Republic of Belarus on Business Companies», «On Personal Data Protection» and other bills. We will monitor the status of their consideration in our further reviews.
Changes in licensing legislation reduce the number of licensed activities and simplify licensing requirements
In early autumn 2019, the President signed Decree No. 326 «On Improvement of Licensing», which reduced the number of licensed activities and simplified licensing requirements.
According to the Decree, the following activities can be carried out without a license since 01.10.2019:
- wholesale and retail trade in fuel oil and petroleum bitumen;
- diagnosis, prevention of disease and treatment of animals;
- transportation of passengers by taxi;
- mobile telecommunication services (with the exception of cellular mobile telecommunications);
- broadcasting television programmes and sound programmes;
- trade in fire protection equipment;
- expert activity on development of fire safety certificates, calculations to assess fire safety;
- psychological assistance activities;
- storage and pledge of precious metals and precious stones;
- activities related to control of radioactive pollution;
- pathoanatomical diagnosis;
- primary health care;
- security of employees, facilities and property by a legal entity.
The Decree also defined the principles of licensing. These provide for inadmissibility of suspension and termination of a licence for minor violations and formal misconduct. However, the Decree does not establish the concept of «minor violations and formal misconduct»; hence it is currently not clear how the new approach will work in practice.
In addition, the Decree provided for changes to the list of licensing requirements and conditions for such activities as cryptographic information protection, medical activities, the retail trade in alcoholic beverages and/or tobacco products, and insurance activities.
For additional information, contact Alexey Anischenko, Head of the Competition & Regulatory Practice at Sorainen Belarus.
Conclusion of visa treaty with the EU and simplification of migration formalities
On 8 January the European Union and Belarus signed treaties on visa facilitation and readmission which had been under negotiation since 2014. The treaties mark an important step for Belarus, which currently remains one of the few European countries whose citizens need to obtain visas to visit the Schengen zone.
Against this background, a bill on amending the Law «On the Legal Status of Foreign Citizens and Stateless Persons in the Republic of Belarus» was approved in Belarus. One of the proposed changes would extend the deadline for compulsory registration of foreign citizens visiting Belarus to 10 calendar days from the date of entry. Previously, this period was 5 working days.
For additional information, contact Maksim Salahub, Head of the Migration & Relocation Practice at Sorainen Belarus.
Great Stone Industrial Park recognised as the fastest growing special economic zone
During the Summit of Free and Special Economic Zones in Monaco, organized by the World Federation of Free and Special Economic Zones (FEMOZA) and the United Nations Industrial Development Organization (UNIDO), the Great Stone Industrial Park was recognised as the fastest growing special economic zone in the world. The key factors in determining the winner were the Great Stone’s prospects for global investment and its rapid pace of development.
In addition, the Great Stone Industrial Park was listed in the following nominations for the FDi Free Zones of the Year 2019 rating, organised by The Financial Times:
- «Trade Facilitation» ‒ in connection with creation of a customs clearance point within the Industrial Park, allowing all customs procedures to be conducted there;
- «Expansion» ‒ due to opportunities for expansion of existing production facilities in the Industrial Park.
According to a statement by the Industrial Park, «this highly favourable independent assessment by international experts indicates the unique conditions for doing business in the Great Stone Industrial Park and allows us to consider it as a key point uniting the markets of the European and Eurasian Economic Unions».
For additional information about opportunities offered by the Great Stone Industrial Park, contact Maksim Salahub, Head of the Foreign Direct Investments Projects at Sorainen Belarus.
National Bank lowers the refinancing rate and short-term interest rates
On 20.11.2019, the National Bank of the Republic of Belarus reduced the refinancing rate from 9.5 to 9 per cent per annum, the overnight loan rate from 10.75 to 10 per cent per annum, and the overnight deposit rate from 8.25 to 8 per cent per annum.
The refinancing rate is the basic tool for regulating the level of interest rates in the money market and is used to set the level of a debtor’s liability in the case of default on a monetary obligation.
Minimum salary increase
According to the Government press service, at the beginning of 2020 the minimum monthly salary will increase by 45 Belarusian rubles (about 13.6%) and will amount to 375 Belarusian rubles (approximately 160 euros).
The minimum salary is the lowest legally permitted wage in the country.