Meeting with Cabinet Members.Part 2
January 9, 2007
The Kremlin, Moscow
Совещание с членами Правительства
9 января 2007 года
Москва, Кремль
I very much expect that all these agreements will be executed both by Russian and Belarusian parties with the awareness of what Russia is doing to support the Belarusian economy.
And now, Viktor Borisovich, could you explain the recent problems connected with the deliveries and transport of Russian oil through Belarusian territory. What exactly do these problems consist in?
VIKTOR KHRISTENKO: If we talk about the essence of the dispute, then the crux of the matter or the problem is the regime for collecting export duties on crude oil.
I will perhaps briefly touch on the history of this issue. As part of the integration process, in 1995 the Russian Federation waived export duties on crude oil being delivered to Belarus and we signed an agreement with our Belarusian colleagues which stipulates that while the crude oil export duties amount to zero we will both establish a regime whereby the export duties collected on oil products will be syncronized. Therefore, as of 1995 the Russian export duties on oil products were automatically calculated at the western border of Belarus. Along with this, in these same agreements, in the agreements that were signed, the financial means received from export duties on oil products were divided in the following way: 15 percent was put into the budget of the Republic of Belarus and 85 percent into the budget of the Russian Federation. Such as regime has been signed and has been in effect as of 1995.
In 2001 the Belarusian party unilaterally left this agreement.
VLADIMIR PUTIN: In which year?
VIKTOR KHRISTENKO: In 2001, and as of then the Belarusian party established a regime for export duties on oil products independently. In practice, for example last year, 2006, this rate was two to three times lower than the Russian duties on oil products.
VLADIMIR PUTIN: And this resulted in the situation whereby our oil companies began to export crude oil for processing on Belarusian territory. Is that right?
VIKTOR KHRISTENKO: As a matter of fact, this resulted in a situation, in a certain offshore, a vacuum if you want, which created advantages exclusively for Belarusian oil refineries in an absolutely unfounded way and significantly distorted the whole system for the economic regulation of streams of oil and oil products in general for the Russian Federation and for the Union State as well.
VLADIMIR PUTIN: In 2001 the Belarusian partners unilaterally left the agreement, is that right?
VIKTOR KHRISTENKO: Yes.
VLADIMIR PUTIN: Why did you not introduce an export duty on crude oil at once?
VIKTOR KHRISTENKO: First of all, I must say that we certainly expected that our Belarusian colleagues would return within the framework of the 1995 agreement and we therefore undertook the corresponding steps with our Belarusian colleagues.
Secondly, it is certainly true that all this was considered in the context of forming the entire Customs Union.
And finally, probably as a third point one must point out that such long negotiations actually amount to additional support for the Belarusian economy as a whole and, truth to tell, support during the election campaign that touched on many political issues in Belarus. To a certain degree this process is also a tribute to these circumstances.
VLADIMIR PUTIN: And these negotiations lasted five years?
VIKTOR KHRISTENKO: Yes, the negotiations had varying degrees of success or, more precisely, lasted five years without any tangible success.
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