November 26 – December 2, 2018
Belarus-Russia relations

Belarus is bargaining a compensation for the tax manoeuvre in Russia and threatening to revise the EEU agreement

The situation has not changed
Belarus is bargaining a compensation for the tax manoeuvre in Russia and threatening to revise the EEU agreement

Last week, Russo-Belarusian relations were affected by the seizure of Ukrainian ships by Russia and, accordingly, by the threat of a military conflict: in these circumstances, Belarus chose not to interfere. As for negotiations about a compensation for the tax manoeuvre in the Russian oil industry, Belarus has put forward a new argument – a threat to withdraw from the EEU agreement on the division of import duties.

Amid the conflict in the Kerch Strait, the Belarusian leadership remained silent for some time, and when it became clear there would be no rapid escalation of the conflict, it made several conciliatory statements. Belarus is really interested in avoiding interference in the Russian-Ukrainian conflict, and, accordingly, in achieving peace or freezing it.

In turn, President Lukashenka gave an interview to Russia 24, a Russian TV channel, speaking about the Kremlin in a flattering and allied manner, albeit remembering to lament Russia’s “national egoism” in the EEU. That said, he backed his complaints with a strong argument at the meeting of the EEU Prime Ministers in Minsk on November 27th: Lukashenko declared that Belarus disagreed with the distribution of import customs duties and would not support the extension of the agreement in its current form. This was a new and weighty argument in Belarus’ disputes with Russia, which strengthened Belarusian negotiating positions in other areas. For example, such as Belarus’ claims for a compensation from the tax manoeuvre in the Russian oil industry. Russian economists have estimated that Belarus will lose about USD 8 billion before 2024. Losses in 2019 will be about USD 300 million, and according to Russian Deputy Finance Minister Belkovets, the state budget for 2019 does not envisage a compensation due to the slow progress in negotiations.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.

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