Publication: Monitor Volume: 4 Issue: 142

Alyaksandr Lukashenka yesterday lashed out at Russia for imposing an import duty surcharge on goods coming to Russia via Belarus. “Moscow should not have acted without consultation with Minsk. It is the umpteenth time that Russia takes unilateral steps. We won’t run to them anymore. We are fed up with such a policy,” Lukashenka declared. He warned that Belarus “reserves the right to take response measures” and that “Russia’s budget won’t come out the winner.”

A Slavic solidarity festival was the ironic venue of Lukashenka’s sally. Moscow Mayor Yuri Luzhkov, appearing with Lukashenka at the festival in Vitsyabsk (Vitebsk), similarly attacked the Russian government for the move which “risks splitting the Customs Union” and “turns agreements into paper scraps.” (Russian agencies, Russian TV, July 23)

The Russian government had on July 20 announced the introduction of the 3 percent surcharge as a general measure, effective August 15, 1998 through December 31, 1999, for desperately needed budget revenue. The measure does not exempt the goods entering Russia from Belarus. Russia is to collect the duties at its own border with Belarus, thereby hitting at Belarus’ illicit income from the transit trade. Both had grown massively after the CIS Customs Union and the Russia-Belarus Union erased the Russia-Belarus customs border. Belarus was supposed to tax at its own Western border the goods bound for Russia and then to turn the revenue over to Moscow. In practice, however, Belarus kept the lion’s share of the revenue. Russia had until now tolerated the practice as an indirect subsidy to its ally.