ABOUT THE EURASIAN ECONOMIC UNION (EEU)

The Eurasian Economic Union (EAEU or EEU is an economic union of states located primarily in northern Eurasia. A treaty aiming for the establishment of the EEU was signed on 29 May 2014 by the leaders of Belarus, Kazakhstan and Russia, and came into force on 1 January 2015. Treaties aiming for Armenia’s and Kyrgyztan’s accession to the Eurasian Economic Union were signed on 9 October 2014 and 23 December, respectively. Armenia's accession treaty came into force on 2 January 2015. Kyrgyzstan's accession treaty came into effect on 6 August 2015. It participated in the EEU from the day of its establishment as an acceding state.

The Eurasian Economic Union has an integrated single market of 183 million people and a gross domestic product of over 4 trillion U.S. dollars. The EEU introduces the free movement of goods, capital, services and people and provides for common transport, agriculture and energy policies, with provisions for a single currency and greater integration in the future. The Eurasian Economic Commission is modelled on the European Commission and serves as the regulatory agency for the Eurasian Customs Union, the Single Economic Space and the Eurasian Economic Union.

Structure

Supreme Eurasian Economic Council

Important decisions for the Eurasian Economic Union are addressed by the Supreme Eurasian Economic Council, which is composed of the Heads of State of the Member States. The Supreme Council determines the strategy, direction and prospects of integration and takes decisions aimed at achieving the goals of the union. It also approves the budget and the distribution of the contribution of the Member States. The Eurasian Commission can take decisions on not only the customs policy of the union, but also on the macro-economy, the competition regulations, the energy policy and the fiscal policy of the Eurasian Economic Union. It has strict anti-corruption laws.

Council

The Council is composed of the Vice Prime Ministers of the Member States. The Council of the Commission oversees the integration processes in the Union, and is responsible for the overall management of the Eurasian Commission. It monitors the Commission by approving the draft budget of the Union, the maximum number of personnel, and the qualification requirements for the Commission's employees. The Council convenes once every quarter. It also considers issues of customs cooperation, trade and development of Eurasian integration. The Council regularly holds discussions on the important aspects of the EEU and meets with business representatives of the Member States.

Collegium

The Collegium is composed of twelve Commissioners, one of which is the Chairman of the Board. Each Member State provides three Commissioners to the Collegium of the Eurasian Commission who carry out the operational management and oversee the everyday work of the Eurasian Commission. All twelve Commissioners are appointed by the Supreme Eurasian Council for a four-year renewable term. The Commissioners also receive the status of federal ministers in their respective countries.

The Collegium of the Commission is the executive body of the Commission. It convenes once every week at least, and is responsible for the day-to-day running of the Eurasian Economic Union. It has a wide range of activities, including monitoring the implementation of treaties, submitting annual progress reports and making recommendations. The Board of the Commission also assists Member States in the settlement of disputes, and carries out the draft of the Union's budget. Part of its activities include being the intermediary between the Departments of the Commission and the Heads of State of the Member States.

A number of Departments are headed by the Commissioners. The lower rank staff is composed of 84% Russian officials, 10% Kazakhs and 6% Belarusians, proportional to the populations of the Member States. The Departments enable the Board of the Eurasian Commission to make decisions not only with regard to customs policies, but in such areas as macroeconomics,  regulation of economic competition, energy policy and financial policy. The Commission Departments are also involved in government procurement and labor migration control.

Parliament

As of 2015, the EEU has no directly or indirectly elected body. In 2012, the creation of a Eurasian Parliament was under consideration. However, it was considered too premature, and Member States have instead begun harmonising national laws and legal codes. Russian President Vladimir Putin has upheld the idea of creating a Parliament for the Union.

Court of the Eurasian Economic Union

The Court of the Eurasian Economic Union replaced the Court of the Eurasian Economic Community (EurAsEC Court) in 2015. It is in charge of dispute resolution and the interpretation of the legal order within the Eurasian Economic Union. Its headquarters is in Minsk. The Court is composed of two judges from each Member State, appointed by the Heads of Government of the Member States. Their term of office is nine years.

Perspective for an EEU-EU Free Trade Area

The gains that could be derived from an EEU-EU free trade area are substantial, especially for the EEU countries and Eastern Member States of the EU. Even greater effects could be achieved if other CIS countries were part of this cooperation, not just EEU states. The net effects are not only positive, they are of a magnitude that represents a substantial impact on the people’s purchasing power, especially in the EEU states. While there are some redistributional effects associated with a potential free trade agreement, these could be effectively mitigated by well-thought out transitional strategies.

A free trade area between the EU and the Eurasian region would have considerable potential to deescalate tensions and create a basis for cooperation. 

The EU has so far failed to develop a clear policy on the EEU. In matters of trade, the EU has been reluctant to establish relations with the Eurasian Economic Union. Regardless of its geopolitical underpinnings, the EEU has a commercial reality: EU businesses cross EEU customs borders and interact with EEU rules and institutions as well as Russian ones. Bilateral relations with the EEU Member States need to be developed, and their interests should not be marginalised, it will be beneficial to maintain a certain minimum level of relations with the EEU. Such relations should begin with small and selective actions and be flexible and gradual. It is essential that the EU (and its Member States) invests in a better understanding of Eurasian integration processes (within the EEU as well as within the region more generally) and formulates with greater clarity the potential costs and benefits of its options for cooperation.