Russian style: demand for compensation

The Kremlin wants two large Belarusian enterprises as a compensation: in such a way Russia hopes to cover losses for oil product export duties that its budget did not receive for exports of Belarusian solvents made from Russian oil, news agency Interfax reports. The agency referred to an anonymous source close to the process of bileteral negotiations, which were being held on March 11 in Moscow.

Creeping coup

According to the source, Moscow has set sights on Grodno Azot (producer of chemicals) and Minsk Automobile Plant (MAZ). Joint manufactures are highly likely to be organised on the basis of the both enterprises.

Russia believes that in 2011 – 2012 Belarus exported petrol made of imported Russian oil under the guise of solvents. According to the regulations of the Customs Union one should not pay duties to the Russian budget when exporting solvents. But Belarus allegedly added some component to petrol, and that is why it could be regarded as a solvent, but later it was “turned” to petrol again. Russia repeatedly expressed concerns that Belarus could be avoiding duty payments by declaring the supplies as solvents.

Russia won’t forgive

As the losses of its budget amount to appr. $2.5 bn, Moscow is thirsting for compensation. Belarus may state that everything was done according to the letter of the law but the export of solvents did increase ninefold and exceeded 2 mln tons in 2011. In July 2012 Russian Prime Minister Dmitry Medvedev said that Belarus should right its wrong to the Russian budget if any violations occurred.

Moscow has formally put an end to the negotiations concerning Russian oil exports to Belarus in 2013. Belarus would like to gain 23 mln tons of oil but the Russian side is driving a hard bargain: they are ready to supply Belarus with only 21 mln upon condition of more intensive integration. The issue is to be tackled on March 15 at the sittings of the Supreme Council of the Union State.


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