Experts from the Baikal Lobridge Analytical Center have prepared a study on the development of e-commerce regulation in the Eurasian Economic Union (EAEU).
E-commerce has become one of the fastest-growing segments of the EAEU economy in recent years. As the market expands, a new regulatory framework is emerging, covering customs administration, taxation, technical regulation, consumer protection, statistical reporting and digital interaction between market participants. Many of these changes are still being developed. The rules being shaped today, however, will determine the conditions under which marketplaces, sellers, logistics providers and other market participants operate in the years ahead.
The study looks at the key EAEU initiatives at the supranational level, their current status, the main areas of regulatory development and the potential impact on business.
The Vedomosti newspaper has published an article based on the research findings. The full text of the study is available here.
Here are the main findings.
E-commerce has become one of the fastest-growing segments of the EAEU economy in recent years. As the market expands, a new regulatory framework is emerging, covering customs administration, taxation, technical regulation, consumer protection, statistical reporting and digital interaction between market participants. Many of these changes are still being developed. The rules being shaped today, however, will determine the conditions under which marketplaces, sellers, logistics providers and other market participants operate in the years ahead.
The study looks at the key EAEU initiatives at the supranational level, their current status, the main areas of regulatory development and the potential impact on business.
The Vedomosti newspaper has published an article based on the research findings. The full text of the study is available here.
Here are the main findings.
E-commerce is becoming a distinct area of regulation
The rapid growth of e-commerce has created a need for specific rules at the supranational level. The EAEU is gradually putting in place a comprehensive framework covering customs, taxation, technical regulation and consumer protection.
The changes are being introduced through amendments to three existing international agreements within the EAEU, the adoption of one new agreement, and amendments to dozens of acts adopted by the EEC Council and the EEC Board. The process is guided by a roadmap for the development of e-commerce. Of the 14 measures set out in the roadmap, eight have already been implemented, four are at the final stage, and two are still being prepared.
The changes are being introduced through amendments to three existing international agreements within the EAEU, the adoption of one new agreement, and amendments to dozens of acts adopted by the EEC Council and the EEC Board. The process is guided by a roadmap for the development of e-commerce. Of the 14 measures set out in the roadmap, eight have already been implemented, four are at the final stage, and two are still being prepared.
Customs regulation remains the most developed area
Amendments to the EAEU Customs Code, which the industry is still waiting to see fully ratified, provide for a dedicated regime for e-commerce goods. The amendments introduce new categories of goods, establish the status of an e-commerce operator, provide for a separate customs declaration and set out special customs administration procedures.
They also define the duty-free import threshold and customs duty rates for goods above that threshold, while opening the door to the introduction of VAT on cross-border e-commerce.
They also define the duty-free import threshold and customs duty rates for goods above that threshold, while opening the door to the introduction of VAT on cross-border e-commerce.
Common rules for the internal market are still taking shape
The Agreement on E-Commerce in Goods, which is expected to be signed soon, is intended to become the main document governing e-commerce between EAEU member states.
It will establish common rules for sellers and marketplaces, consumer protection, electronic document management and pre-trial dispute resolution.
It will establish common rules for sellers and marketplaces, consumer protection, electronic document management and pre-trial dispute resolution.
Tax rules are moving toward the destination principle
The proposed changes would require VAT to be paid in the country where the buyer is located and where the goods are actually consumed. The aim is to bring e-commerce tax rules across the EAEU closer together and reduce tax disparities between member states.
Technical regulation remains the most sensitive issue
One of the main challenges is finding the right balance between supporting cross-border e-commerce and ensuring product safety.
Amendments to the EAEU Treaty are currently being discussed to put this approach into practice. The proposed model would introduce a notification-based procedure for most goods, while maintaining stricter requirements for certain categories of “sensitive” products.
The final regulatory framework has not yet been agreed, and discussions are continuing.
Amendments to the EAEU Treaty are currently being discussed to put this approach into practice. The proposed model would introduce a notification-based procedure for most goods, while maintaining stricter requirements for certain categories of “sensitive” products.
The final regulatory framework has not yet been agreed, and discussions are continuing.
E-commerce statistics are becoming a new tool for regulators
Without comparable statistics, regulators see only parts of the market in individual countries. This can leave decisions on taxation, duty-free thresholds and technical regulation based on an incomplete picture.
A new source of data is already being introduced for external trade: customs declarations for e-commerce goods. This should improve the quality of customs statistics.
Statistics on e-commerce between EAEU member states, however, remain less developed. Without a common methodology, it is difficult to assess actual trade flows within the Union and the impact of regulation on individual countries. The EEC is therefore developing a new methodology.
A new source of data is already being introduced for external trade: customs declarations for e-commerce goods. This should improve the quality of customs statistics.
Statistics on e-commerce between EAEU member states, however, remain less developed. Without a common methodology, it is difficult to assess actual trade flows within the Union and the impact of regulation on individual countries. The EEC is therefore developing a new methodology.
The importance of supranational GR continues to grow
Some elements of e-commerce regulation are still being developed at the EAEU level. Key parameters of the future rules are therefore being shaped through discussions between the Eurasian Economic Commission (EEC), EAEU member states and business representatives.
For companies, this makes effective engagement with the supranational regulatory agenda an increasingly important part of protecting and advancing their interests.
For companies, this makes effective engagement with the supranational regulatory agenda an increasingly important part of protecting and advancing their interests.
Conclusion
EAEU institutions are becoming the place where the future rules for e-commerce are being shaped. Government authorities, national regulators, marketplaces, manufacturers, traditional retailers and consumers all have interests at stake in this process.
As a result, issues that are often viewed in Russia as domestic debates over taxation, product safety or consumer protection are already being discussed in a broader Eurasian context.
The success of the new regulatory framework will depend on finding the right balance between effective regulation and creating room for e-commerce to grow. It will also depend on the extent to which businesses take part in the expert dialogue at the supranational level.
As a result, issues that are often viewed in Russia as domestic debates over taxation, product safety or consumer protection are already being discussed in a broader Eurasian context.
The success of the new regulatory framework will depend on finding the right balance between effective regulation and creating room for e-commerce to grow. It will also depend on the extent to which businesses take part in the expert dialogue at the supranational level.
