On the Ratification of the Agreement on the Procedure for the Voluntary Approval by the Member States of the Eurasian Economic Union with the Eurasian Economic Commission of Specific Subsidies for Industrial Goods and the Conduct by the Eurasian Economic Commission of Proceedings related to the Provision of Specific Subsidies by the Member States of the Eurasian Economic Union

Home / RLA / On the Ratification of the Agreement on the Procedure for the Voluntary Approval by the Member States of the Eurasian Economic Union with the Eurasian Economic Commission of Specific Subsidies for Industrial Goods and the Conduct by the Eurasian Economic Commission of Proceedings related to the Provision of Specific Subsidies by the Member States of the Eurasian Economic Union

On the Ratification of the Agreement on the Procedure for the Voluntary Approval by the Member States of the Eurasian Economic Union with the Eurasian Economic Commission of Specific Subsidies for Industrial Goods and the Conduct by the Eurasian Economic Commission of Proceedings related to the Provision of Specific Subsidies by the Member States of the Eurasian Economic Union

The Law of the Republic of Kazakhstan dated March 14, 2018 No. 144-VI SAM.

To ratify the Agreement on the procedure for the Voluntary Coordination of Specific Subsidies for Industrial Goods by the Member States of the Eurasian Economic Union with the Eurasian Economic Commission and the conduct of Proceedings by the Eurasian Economic Commission related to the Provision of Specific Subsidies by the Member States of the Eurasian Economic Union, concluded in Kazan on May 26, 2017.

President

Republic of Kazakhstan

N. NAZARBAYEV

Agreement on the procedure for the voluntary approval by the Member States of the Eurasian Economic Union with the Eurasian Economic Commission of specific subsidies for industrial goods and the conduct by the Eurasian Economic Commission of proceedings related to the provision of specific subsidies by the Member States of the Eurasian Economic Union

The Member States of the Eurasian Economic Union, hereinafter referred to as the Member States,

guided by the provisions of The Treaty on the Eurasian Economic Union dated May 29, 2014 (hereinafter referred to as the Treaty),

in order to implement the provisions of article 93 of the Treaty and the Protocol on Common Rules for the Provision of Industrial Subsidies (Annex No. 28 to the Treaty) (hereinafter referred to as the Protocol),

Realizing the importance of creating conditions for the functioning and development of the Eurasian Economic Union (hereinafter referred to as the Union), as well as for the development of industrial production,

in order to increase transparency and predictability in the provision by Member States of State support to the industrial sectors of the economy,

Expressing its desire to ensure conditions for the creation of a transparent and predictable environment in the field of the provision by Member States of specific subsidies for industrial goods in relation to the assessment of subsidies implemented by Member States,

Taking into account generally recognized principles and norms of international law,

following the principles, norms and rules of the World Trade Organization,

have agreed on the following:

I. General provisions

Article 1

Subject of regulation

This Agreement regulates issues of interaction between the Member States and the Eurasian Economic Commission (hereinafter referred to as the Commission) in connection with the provision of specific subsidies by the Member States for industrial goods, defines the procedure for voluntary coordination with the Commission of the provision of specific subsidies by the Member States (hereinafter referred to as the coordination of specific subsidies), as well as the Commission's proceedings related to the provision of specific subsidies by Member States (hereinafter referred to as the proceedings).

Article 2

Responsible Department

The functions related to the procedure for approving specific subsidies and conducting proceedings are carried out by the structural unit of the Commission, whose competence includes issues of ensuring the implementation of industrial policy and industrial subsidies (hereinafter referred to as the responsible department).

Article 3

Definitions

For the purposes of this Agreement, concepts are used that mean the following::

An "insignificant subsidy" is a subsidy that, due to its small size, cannot have a significant impact on the Union market.;

"joint project" is a project involving Member States aimed at deepening industrial cooperation and cooperation and providing for the fulfillment of one of the following conditions:

conducting joint development work;

establishment of enterprises (production lines);

development of new types of technologies and provision of information related to these types of technologies;

formation of a joint innovation infrastructure;

"authorized body" means the executive authority of a Member State, whose powers include issues related to the implementation of this Agreement.

Other concepts used in this Agreement are applied in the meanings defined by The Treaty and international treaties within the framework of the Union.

II. The procedure for approving specific subsidies and making a decision by the Commission on the admissibility or inadmissibility of specific subsidies

Article 4

The procedure for approving specific subsidies

1. A Member State may apply to the Commission for the approval of a specific subsidy by submitting an appropriate application in accordance with the procedure provided for in Article 5 of this Agreement.

2. The approval of specific subsidies is carried out on a voluntary basis.

3. In accordance with paragraph 6 of the Protocol, Member States do not apply compensatory measures to subsidies, the terms, amounts and conditions of which are agreed upon by the Commission.

4. The procedure for approving specific subsidies includes:

1) conducting an analysis of a specific subsidy by the responsible department in accordance with Article 7 of this Agreement in order to determine whether a specific subsidy meets or does not meet the criteria provided for in Articles 10 and 11 of this Agreement (hereinafter referred to as the analysis);

2) holding consultations in accordance with Article 8 of this Agreement;

3) preparation, based on the results of the approval of specific subsidies, of an opinion on the compliance or non-compliance of a specific subsidy with the criteria provided for in Articles 10 and 11 of this Agreement (hereinafter referred to as the conclusion based on the results of the approval).

5. As part of the procedure for approving specific subsidies, the responsible department does not analyze whether there is material damage to a branch of the national economy, the threat of material damage to a branch of the national economy, or serious infringement of the interests of Member States due to the provision of a specific subsidy by one of the Member States.

6. Based on the results of the approval of a specific subsidy, the Commission shall decide on the admissibility or inadmissibility of a specific subsidy in accordance with Article 9 of this Agreement, with the exception of the case provided for in paragraph 4 of Article 9 of this Agreement.

Article 5

Consideration by the Commission of applications from Member States for harmonization

specific subsidies

1. Approval of a specific subsidy that is planned to be provided or provided is carried out on the basis of an application from the authorized body sent to the Commission for approval of a specific subsidy (hereinafter referred to as the approval application). The responsible Department shall inform the authorized bodies of other Member States of the receipt of the application for approval by the Commission within 5 working days from the date of its registration with the Commission.

2. The approval statement contains the following information:

1) information about the authorized body that sent the application for approval;

2) information about the authorized body (structure authorized by the Member state) responsible for the implementation of the subsidy;

3) information about the regulatory legal act (draft regulatory legal act) providing for the provision of a specific subsidy (details and name);

4) information confirming the specificity of the subsidy;

5) a description of the specific subsidy, the form and purpose of its provision;

6) information about the potential recipient and source of funding;

7) information about the industry and the product (indicating the code of the unified Commodity Nomenclature of Foreign Economic Activity of the Eurasian Economic Union (hereinafter referred to as the EAEU Customs Code of Economic Activity));

8) the period for which a specific subsidy is provided;

9) the amount of a specific subsidy;

10) information on the impact of a specific subsidy on the internal market of the Union.

3. The form of the application for approval and the procedure for filling it out shall be approved by the Council of the Commission.

4. If the authorized body that sent the application for approval submits the documents and information provided for in paragraph 2 of this article in full, the responsible department, within a period not exceeding 10 working days from the date of registration of the application for approval with the Commission, decides to initiate the approval procedure and sends a corresponding notification to the authorized bodies.

5. The notification of the start of the procedure for approving a specific subsidy must contain:

1) the name of the Member State that submitted the application for approval;

2) information about the administrative-territorial unit of the Member State in which a specific subsidy is planned or provided;

3) the name of the authorized body that sent the application for approval;

4) a brief description of the specific subsidy, information about the purpose of its provision and the potential recipient;

5) information about the regulatory legal act (draft regulatory legal act) providing for the provision of a specific subsidy (details and name);

6) information about the industry and the product (including the code Customs Code OF THE EAEU);

7) the period for which a specific subsidy is provided;

8) the amount of a specific subsidy.

6. If the authorized body that sent the application for approval fails to provide the documents and information provided for in paragraph 2 of this Article in full, the responsible department shall, within a period not exceeding 10 working days from the date of registration of the application for approval with the Commission, request the missing documents and (or) information from this authorized body. The request is considered received by the authorized body after 7 calendar days from the date of sending the request by mail.

The authorized body that sent the application for approval, within a period not exceeding 30 calendar days from the date of receipt of the specified request, submits the missing documents and (or) information.

If the authorized body that sent the application for approval is unable to submit the documents and/or information requested by the responsible department within the prescribed period, the specified period may be extended by the responsible department for 30 calendar days at the reasoned and written request of this authorized body.

The responsible Department, within 5 working days from the date of registration of the missing documents and (or) information with the Commission, decides to initiate the approval procedure and notifies the authorized bodies about it.

Failure by the authorized body to provide the missing documents and (or) information within the time period established by the second paragraph of this paragraph, or within the time period established by the responsible department in accordance with the third paragraph of this paragraph, is the basis for rejecting the application. In this case, the responsible department notifies the authorized body that sent the application for approval.

7. The application for approval may be withdrawn by the authorized body that sent it, before the decision is made by the Board of the Commission.

Article 6

Refusal to carry out the procedure for approving a specific subsidy

1. The responsible department refuses to carry out the procedure for approving a specific subsidy if there are any of the following grounds::

1) the provision by a Member State of a specific subsidy, which is the subject of the approval procedure, has resulted in material damage to a branch of the national economy of another Member State or the threat of material damage to a branch of the national economy of another Member State, proven in accordance with section V of the Protocol or section IV of this Agreement;

2) the provision by a Member State of a specific subsidy, which is the subject of the approval procedure, has led to a serious infringement of the interests of any of the Member States, proven in accordance with section V of the Protocol or section IV of this Agreement;

3) a specific subsidy, for the approval of which the authorized body has applied, is the subject of an investigation provided for in section V of the Protocol or proceedings provided for in section IV of this Agreement.

2. The responsible Department, within 10 working days from the date of registration of the application for approval with the Commission, notifies the authorized body that sent the application for approval and other authorized bodies of the refusal to approve a specific subsidy (indicating the grounds for refusal).

Article 7

Conducting an analysis

1. After making a decision to start the procedure for approving a specific subsidy, the responsible department conducts an analysis.

During the analysis, the responsible department ensures that consultations are conducted in accordance with Article 8 of this Agreement.

2. Authorized bodies may submit to the Commission additional information necessary for the Commission to analyze and decide on the admissibility or inadmissibility of a specific subsidy during the entire period of the approval procedure, including at the request of the responsible department.

3. The deadline for the responsible department to analyze and prepare an opinion on the results of the approval of a specific subsidy is 30 working days from the date the responsible department sends a notification to the authorized bodies about the start of the procedure for approving a specific subsidy.

4. Based on the results of the analysis, the responsible department prepares an opinion on the results of the approval of a specific subsidy (setting out the relevant evidence and recommendations (if necessary) regarding a regulatory legal act (draft regulatory legal act) providing for the provision of a specific subsidy).

Article 8

Conducting consultations

1. As part of the approval of a specific subsidy, the authorized body has the right to initiate consultations at the Commission's site by sending a corresponding proposal to the Commission. The responsible Department informs the authorized bodies of other Member States about this and ensures consultations.

2. If a representative of the authorized body of the applicant State is not present at the consultations, consultations will not be held.

The absence of representatives of authorized bodies of other Member States at the consultations, informed of the date, place and time of the consultations, is not an obstacle to consultations.

3. During the consultations, representatives of the authorized bodies may provide additional information and explanations confirming the position of the relevant authorized bodies on the issue under consideration.

The position of the authorized body is attached to the minutes of the consultations (if it is submitted to the Commission within 5 working days from the date of the consultations).

4. The consultation protocol is signed by the head (deputy head) of the responsible department and sent to the authorized bodies within 7 working days from the date of the consultation.

Article 9

Making a decision on whether or not a specific subsidy is acceptable

1. The decision on the admissibility or inadmissibility of a specific subsidy is made by the Board of the Commission on the basis of the conclusion based on the results of the approval of a specific subsidy.

2. If a specific subsidy meets the criteria provided for in Article 10 of this Agreement, the Board of the Commission shall decide on the inadmissibility of a specific subsidy.

3. If a specific subsidy does not meet the criteria provided for in Article 10 of this Agreement and meets one or more criteria provided for in Article 11 of this Agreement, the Board of the Commission shall decide on the admissibility of the specific subsidy.

4. If a specific subsidy does not meet the criteria provided for in Article 10 of this Agreement and does not meet any criteria provided for in Article 11 of this Agreement, a member of the Board of the Commission in charge of industry issues shall report this at a meeting of the Board of the Commission and no decision on the admissibility or inadmissibility of such subsidy shall be taken.

In this case, if there is a written request from the authorized body that sent the application, the responsible department conducts an analysis to determine whether there is a threat of material damage to the national economy due to the provision of such a specific subsidy.

The procedure for conducting the analysis provided for in the second paragraph of this paragraph shall be established by the Council of the Commission.

5. Based on the results of the analysis provided for in paragraph 4 of this article, the issue of determining other criteria for the admissibility or inadmissibility of a specific subsidy, according to which the Board of the Commission decides on the admissibility or inadmissibility of a specific subsidy specified in paragraph 4 of this article, is submitted in accordance with the established procedure for consideration at a meeting of the Eurasian Intergovernmental Council.

III. The permissibility or inadmissibility of a specific subsidy

Article 10

Criteria for the inadmissibility of a specific subsidy

1. The criterion for the inadmissibility of a specific subsidy is the content in the normative legal act (draft normative legal act) providing for the provision of a specific subsidy of provisions indicating the presence of prohibited subsidies defined in paragraphs 9, 11 and 14 of the Protocol.

2. The Eurasian Intergovernmental Council may define other criteria for the inadmissibility of specific subsidies.

Article 11

Criteria for the admissibility of a specific subsidy

1. A specific subsidy is acceptable if it meets one or more of the following criteria:

1) a specific subsidy is insignificant (in the amount of 100 thousand dollars per recipient (enterprise));

2) a specific subsidy is aimed at the implementation of a joint project, including in accordance with the main directions of industrial cooperation within the Union, approved by the Eurasian Intergovernmental Council. Such joint projects should be aimed at the production of products that are not produced or are produced in insufficient quantities in the customs territory of the Union.;

3) a specific subsidy is aimed at carrying out research and development activities, including joint ones, in order to stimulate high-tech industries;

4) a specific subsidy is aimed at innovation activities;

5) a specific subsidy is aimed at the production of industrial goods that have no analogues in the customs territory of the Union;

6) a specific subsidy is aimed at the production of an industrial product (the code of which is defined at the level of 10 characters Customs Code of the EAEU), which is produced in the customs territory of the Union in insufficient quantities;

7) a specific subsidy is aimed at compensating for material damage caused by natural disasters or any other emergency incidents, in the amount necessary to restore the damage caused.;

8) a specific subsidy is aimed at helping enterprises pay up to half the cost of consulting services, services for organizing participation in trade fairs, conducting basic research (including on a large scale), implementing applied industrial developments (up to 70 percent of their cost), and the cost of obtaining licenses and industrial property rights (in an amount equal to the cost of conducting scientific research, which resulted in obtaining such rights).

The average number of employees of such enterprises is established by the Council of the Commission;

9) a specific subsidy is aimed at helping to improve the professional qualifications of employees of enterprises. Subsidies for programs aimed at improving the overall level of professional training of employees of enterprises are set at 50 percent of their cost for enterprises with an average number of employees in the previous calendar year exceeding 250 people, and within 70 percent for enterprises with an average number of employees in the previous calendar year not exceeding 250 people.;

10) a specific subsidy is aimed at providing assistance to enterprises in an unstable or crisis financial situation and undergoing restructuring.

It is allowed to subsidize enterprises that have proven their unstable or crisis financial condition.

An unstable financial situation is characterized by a violation of financial discipline (delays in payment, use of funds from the reserve fund, etc.), interruptions in the flow of funds to the company's current accounts and payments, irregular revenue, lack of profit.

The crisis financial situation is characterized, along with the signs of instability indicated in the third paragraph of this subparagraph, by the presence of regular non-payments (overdue loans from banks, debts to suppliers for inventory, arrears in payments to budgets and extra-budgetary funds).

Organizations can receive subsidies for restoring financial stability and restructuring after 3 years from the date of their state registration.

The company's own financial contribution to the restructuring must be at least 25 percent, unless otherwise provided by a decision of the Board of the Commission.

Such a subsidy can be agreed for the period of the company's recovery from the crisis to a stable state, but not more than 5 years.;

11) a specific subsidy is provided for the purposes and on the terms provided for in section VII of the Protocol.;

12) a specific subsidy is aimed at providing assistance to enterprises that are in the initial stage of formation, if the subsidy level does not exceed 30 percent of the total amount of investments.;

13) a specific subsidy is aimed at providing assistance in order to adapt existing production facilities to Union standards:

reimbursement of the costs of testing products in order to assess their compliance with the requirements of the technical regulations of the Union;

reimbursement of costs for the construction and modernization of testing laboratories;

14) a specific subsidy is aimed at providing assistance in order to ensure that industrial products comply with the requirements of relevant international standards or interstate standards adopted on their basis that are identical to relevant international standards.;

15) a specific subsidy is granted in respect of industrial goods recognized as jointly produced by the Member States in accordance with the procedure determined by the Commission.

2. The conditions for the application of the criteria specified in subitems 1-4, 6-10, 12 and 15 of paragraph 1 of this Article shall be established by the Council of the Commission.

3. The Eurasian Intergovernmental Council may determine other criteria for the admissibility of specific subsidies.

Article 12

The procedure for obtaining information

1. In accordance with paragraph 6 of Article 93 of the Treaty, the Commission shall monitor and conduct a comparative legal analysis of the legislation of the Member States for compliance with the provisions of the Agreements regarding the provision of subsidies.

2. In order to monitor and conduct a comparative legal analysis of the legislation of the Member States for compliance with the provisions of Agreements on the provision of subsidies authorized bodies:

Every year, no later than July 1 of the year following the reporting year, they submit to the Commission a notification of the specific subsidies provided, agreed with the Commission.;

On a quarterly basis, no later than the 30th day of the month following the reporting quarter, regulatory legal acts adopted in the reporting quarter providing for the provision of specific subsidies are sent to the Commission and to each other.;

After the interdepartmental coordination, draft regulatory legal acts providing for the provision of specific subsidies to producers of goods classified as sensitive goods in accordance with the main directions of industrial cooperation within the Union, approved by the Eurasian Intergovernmental Council, are sent to the Commission and to each other by way of mandatory notification.

In respect of regulatory legal acts providing for the provision of specific subsidies and published in open sources, the authorized bodies send to the Commission information containing the details and sources of publication of such acts, and in respect of unpublished regulatory legal acts - the texts of such acts.

3. The Commission shall, in accordance with the established procedure, conduct a comparative legal analysis of the regulatory legal acts of the Member States providing for the provision of specific subsidies for their compliance with Article 93 of the Treaty and The protocol.

4. If a Member State fails to provide a specific subsidy agreed with the Commission during the reporting period, the responsible department shall notify the Member States accordingly.

5. A Member State may apply to the Commission with a proposal to conduct a comparative legal analysis of regulatory legal acts or draft regulatory legal acts of the requesting Member State providing for the provision of subsidies, with a view to their compliance with Article 93 of the Treaty and To the Protocol in accordance with the procedure determined by the Commission.

6. The notification provided for in the second paragraph of paragraph 2 of this Article shall specify:

1) details of the decision of the Board of the Commission on the admissibility of a specific subsidy;

2) criteria on the basis of which a specific subsidy is agreed;

3) the name of the regulatory legal act in accordance with which the specific subsidy is provided;

4) the period for which information is provided;

5) a description of the form of a specific subsidy and the purpose of its provision;

6) information about the recipient and the method of providing a specific subsidy;

7) the amount and duration for which a specific subsidy is provided.

7. The form of notification of the provision of specific subsidies agreed with the Commission, as well as the procedure for completing it, are approved by the Commission Council.

IV. Conducting proceedings

Article 13

Grounds for initiating proceedings

A Member State may apply to the Commission to initiate proceedings if there are the following grounds::

causing material damage to a branch of the national economy due to the provision of a specific subsidy by another Member State;

the threat of material damage to a branch of the national economy due to the provision of a specific subsidy by another Member State;

serious infringement of the interests of a Member State due to the provision of a specific subsidy by another Member State.

Article 14

Making a decision on the commencement of proceedings

1. The proceedings are conducted by the Commission on the basis of an application from the authorized body of the Member State for the commencement of proceedings, submitted to the Commission in confidential or non-confidential versions (if the application contains confidential information) (hereinafter referred to as the application for the commencement of proceedings).

2. The application for the commencement of the proceedings shall specify:

1) the name of the authorized body of the applicant State;

2) the name and description of the subsidized product;

3) a list of regulatory legal acts on the basis of which a specific subsidy is provided;

4) information about the nature and amount of a specific subsidy;

5) information about the manufacturers of the subsidized product;

6) information about national producers of similar goods;

7) information on changes in the volume of imports of subsidized goods into the territory of the applicant State for the 3 calendar years preceding the date of filing the application;

8) information on changes in the volume of exports of similar goods from the territory of the applicant State to the territories of other Member States for the 3 calendar years preceding the date of filing the application;

9) information on the availability and volume of production of a similar product in the territory of the applicant state (in quantitative and monetary terms) for the 3 calendar years preceding the date of filing the application;

10) information on the availability of production of similar goods in the territories of other Member States for the 3 calendar years preceding the date of filing the application;