June 17 – June 23, 2019
Belarus-Russia relations

The Union State and a tax maneuver

The situation has not changed
The Union State and a tax maneuver

At a meeting in Minsk, the heads of Belarusian and Russian governments failed to agree on an integration road map, and, judging by a joint press conference, prime ministers decided to abandon the document altogether and instead, agreed to have numerous integration ‘road maps’, each referring to a concrete sphere of interaction. In other words, the integration ambitions are progressively subsiding.

On June 21st, Siarhei Rumas and Dmitry Medvedev held a regular meeting to discuss the results of the working groups’ efforts on the integration program. It was assumed that during this meeting the parties would agree on the integration concept and road map. The concept, which should lay out the integration principles, was not even discussed. The parties were unable to agree on the road map and apparently decided yet not to do so. Instead, they appear to have decided to agree on road maps for specific integration areas, e.g. tax and budget policy, regulatory sphere. The parties hope to complete the work by November.

Former Russian Ambassador to Belarus, Mikhail Babich, has become a Deputy Minister for Economic Development in charge of all post-Soviet integrations and state programs, gaining access to a powerful integration instrument.

The Druzhba oil pipeline had to suspend operations for 24 hours due to the newly discovered contaminated oil – different than that discovered in the spring of 2019. It was decided to postpone until late 2019 the decision on the full amount of the compensation by Transneft. Apparently, the parties aim to include this issue in the talks on the terms of oil transit and supplies for 2020, including the compensation for the tax maneuver. Equally, the very terms of the tax maneuver in Russia may be reviewed closer to the year-end.

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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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