FOREIGN TRADE IN GOODS
- According to the lastest available data of the Statistical Office of the Republic of Serbia, in 2017, the total foreign trade in goods with the Russian Federation amounted to USD 2,579.3 million. Total export in 2017 amounted to USD 993.1 million, and on the list of the countries to which Serbia exports, the Russian Federation was ranked 4th (5.7% in the total exports). The total import in 2017 amounted to USD 1,586.2 million and the Russian Federation was on the 4th position in the total Serbian imports (7.3 % in the total imports). The coverage of import by export in 2017 was 62.48%.
- If compared to 2016, the export and import increased, in 2017, by 25.12% and 5.51% respectively, which was a result of the reduction of the net import of 16.4%. The components of export are the increase in export of thights by 24.6%, paper and cardboard layed by even 275%, retail medicines by 48%, pheumatics by 171% and circular pumps by 26%, despite the reduction in sale of apples by 4.7%. The import rose by virtue of a growth in import of energy sources in a such way that in relation to 2016 the import of oil decreased by around 10%, whereas the import of natural gas increased by nearly 33%. The import of aluminium grew by 12.8%, of cigarettes and tobacco extracts went up by 18%, the import of copper wire doubled, whereas the import of mineral fertilizer reduced by araound 40%.
- The economic exchange in the first three months of 2018 records positive trends, thus the export to the Russian Federation amounted to USD 280.4 million, which is higher by 25.8% when compared to the same period of the last year when it was USD 223 million. The import records a growth of 26.6% in the first three months of 2018 and amounts to USD 554.4 million, whereas in 2017, the import stood at USD 438 million.
Foreign trade in goods between Serbia and the Russian Federation in the period 2013-2017 (in million USD)
|COVERAGE OF IMPORT BY EXPORT (%)||55.97||44.09||41.67||52.75||62.48||50,57|
The most important exporting and importing goods (in million USD)
|ТOP 10 EXPORTING PRODUCTS|
|1||0808108000 - Apples, fresh, others||114.8||12%|
|2||6115210000 - Pantyhose and tights of synthetic fibres, knitted or crocheted, measuring per single yarn <67 decitex||85.8||9%|
|3||4811590090 - Paper and paperboard, plastic-coated, other||50.2||5%|
|4||3004900091 - Оther medicaments, for retail sale||45.6||5%|
|5||4011100000 - New pneumatic tyres for cars||44||4%|
|6||8413703000 - Glandless impeller pumps for heating systems and similar||22.1||2%|
|7||0406108000 - Fresh cheese (unripened) and curd, other||20.2||2%|
|8||0809309000 - Peaches, fresh||19.9||2%|
|9||0810100000 - Strawberries, fresh||19.7||2%|
|10||0809301000 - Nectarines, fresh||19.5||2%|
|ТOP 10 IMPORTING PRODUCTS|
|1||2711210000 - - Natural gas in gaseous state||443.6||28%|
|2||2709009000 - Petroleum oils and oils obtained from bituminous minerals, crude oil||403.6||26%|
|3||2601120000 - Agglomerated iron ores and concentrates||76.9||5%|
|4||7601100000 - Aluminium, not alloyed, unwrought||75.6||5%|
|5||7408110000 - Wire of refined copper, with a maximum cross-sectional dimension of > 6 mm||59.9||4%|
|6||3102101000 - Urea, containing > 45% nitrogen in relation to the weight of the dry product||42.4||3%|
|7||2803000000 - Carbon "carbon blacks and other forms of carbon", n.e.s.||33.3||2%|
|8||3902100090 - Polypropylene, in primary forms, other||23.8||2%|
|9||8802300000 - Aeroplanes and other powered aircraft of an unladen weight > 2.000 kg but <= 15.000 kg||23||1%|
|10||2402209000 - Cigarettes, containing tobacco, other||20.5||1%|
According to the data of the Ministry of Finance of the Republic of Serbia – the Customs Administration, the total of 1.647 economic entities in Serbia run a business with the Russian Federation.
- The number of economic entities only exporting to the Russian Federation - 741
- The number of economic entities only importing from the Russian Federation - 789
- The number of economic entities trading in goods in both directions - 117
ECONOMIC ENTITIES WITH THE MAJORITY RUSSIAN CAPITAL IN SERBIA
According to the data obtained from the Serbian Business Registers Agency of the Republic of Serbia, the total of 851 active economic entities are registered in the territory of the Republic of Serbia, whose majority owners are the citizens of the Russian Federation, i.e. legal entities registered in the Russian Federation.
The largest number of economic entities is registered with the following activities:
- Professional, scientific, innovative and technical activities (80)
- Manufacturing industry (74)
- Construction industry (53)
- Administrative and supporting service activities (49)
- Information and communications (43)
POTENTIAL FOR COOPERATION IMPROVEMENT
The Russian Federation is a significant exporter of raw materials, mineral fuels and lubricants. The Russian Federation exports almost USD 4 billion of raw materials to China, which is logical taking into account the close economic connectivity and cooperation of the two economies.
Chemical products records the import of over USD 27 billion, the most important importing products in this sector recording a deficit are medicaments and various pharmaceutical products, soaps and cosmetics.
Belarus is the main food exporter to the Russian Federation, which is likely a result of the vicinity of the market and the sanction imposed to Russia, since a substantial quantity of goods in this sector is observed in Belarus to be re-exported. The second important partners are Brasil and China.
The export of animal fats and oils from Serbia to the Russian Federation is interesting since Russia is the leading exporting country of these products to Turkey, Belarus and Kazakhstan, which are potentially good markets for Serbian products.
The Serbian economy has potential to export the supporting program of the building material to the Russian Federation such as floor coverings, windows and doors. The great potential also lies in agriculture, especially in the export of fruit, fodder and food industry.
Both the USA and EU has imposed the sanctions to Russia as a response to the Ukrainian crisis. The first round of sanctions, out of four, was imposed on 17 March 2014, whereas the last one was imposed on 18 December 2014. In addition to these measures, Russia is suspended from the Group 8 and Council of Europe.
In the second round, EU adviced EIB to suspend its investments in the Russian Federation. In the fourth round, the USA imposed new sanctions on 9 December 2014. It included the largest Russian bank Sberbank. The property of five Russian defense technological companies was blocked and export ban was imposed on goods, services and technology supporting research or production for Russian deep sea, Arctic coast or projects with potential to produce oil, which hits mainly these five companies – Gazprom, Gazprom Nјeft, Lukoil, Surgutneftegas and Rosnjeft. Serbia has not imposed sanctions to the Russian Federation.
As of 2014, the National Bank of Serbia has changed the calculation methodology of foreign direct investments in accordance with the guidelines of IMF and within the EU accession procedure. The FDI methodology is in accordance with the sixth edition of the IMF Balance of Payments Manual and international investment position, according to which the increase of assets (investments of residents abroad) and liabilities (investments of non-residents into Serbia) are recorded with positive projection (and vice versa). FDI net is the balance between assets and liabilities, which means a negative amount of FDI net indicates on higher inflow of non-resident investors into Serbia in relation to the outflow under the investments of residents abroad. According to this methodology, the total net investments of Russian residents into Serbia, in the period 2010-2018, amounted to EUR 1.350 billion and the Russian Federation is ranked the 4th among the countries as the largest investors in Serbia.
|Foreign direct investments, net (balance of assets and liabilities) – in mill. EUR -|
The largest investments of Russian companies in Serbia
The Development Agency of Serbia keeps its records by country of origin of the company which invested and according to the researches of the Development Agency of Serbia on foreign direct investments (FDI) by companies and companies’ reports themselves on the amount of investments. Since there is no any legal regulation on reporting on the amount of investments, the following data can be taken only as indicative values. In this respect, the records neither include investments of all companies nor all invesments of individual companies.
|No.||NAME OF COMPANY||SECTOR||MUNICIPALITY / TOWN|
(in million EUR)
|Number of jobs|
|1.||Gazprom Neft / NIS a.d. Novi Sad||Oil industry||Novi Sad||947,0||3.992*|
|2.||Lukoil / Lukoil Srbija a.d. Serbia||Oil industry||Oil industry||210,0||155*|
|3.||GSK Krasniy Treugolnik / Vulkan gume d.o.o.||Automotive industry||Niš||3,5||197*|
|4.||Sogaz & Srbijagas / Sogaz a.d.o.||Insurance||Novi Sad||3,1||20*|
|5.||C-Project / Srpsko ruska trgovinska kuća d.o.o.||Food industry||Nova Crnja||2,5||7*|
|6.||Sberbank / Sberbank Srbija a.d. Belgrade (nekadašnja Volksbank a.d.)**||Finances||Novi Beograd||Not available||685*|
|7.||ICL Services||IТ||Beograd||Not available||15*|
|8.||Mikro Finans Invest /Valetta d.o.o.||Food industry||Kotraža|
|9.||Expobank CZ Marfin banka Srbija||Finances|
Note: Since there are no official data on investment amount by individual companies, the mentioned data are calculated according to the researches conducted by RAS and they cover both realized and planned investments. Although RAS makes all its efforts to provide as precise information on investments as possible, the Agency does not take any responsibility for eventually incorrect or incomplete data.
LEGAL AND REGULATORY FRAMEWORK
The Free Trade Agreement was signed between Russia and Serbia on 28 August 2000 with the aim to deepening and upgrading the mutual trade economic cooperation. Besides some members of the Commonwealth Independent States (ICS), Serbia is the only country in Europe, which has the Free Trade Agreement with Russia. The Agreement prescribes that the goods for which it can be proved to originate from Serbia (with over 50% of content from Serbia) does not require the payment of customs duty when it is for the market of Russia, unless it is excluded from the free trade regime. The list of products to which the free trade regime is not applied is being changed every year. The new Protocol on exceptions from the free trade regime and rules for determining a country of origin of goods was signed between the Governments of the Republic of Serbia and Russian Federation on 22 July 2011 and since then it has been applied provisionally. This Protocol replaced the previously valid Protocol from 2009.
In relation to the list of the excluded products, which was valid up to now, the products such as starch, insulin, glucose syrup, carpets and other floor coverings, cash registers, monitors, wooden furniture are excluded from the list of exceptions, which means that that they can be the subject of preferential trade/export from Serbia to Russia. However, the list of exceptions is extended in relation to the previous one, because some products are added on the list due to Belarus and Kazakhstan such as: cheese, various tyres, cotton textile, various categories of motor and passenger vehicles and other. .
The free trade regime is applied on condition that products with origin are directly bought from an entity duly registered as a legal entity in the Parties to the Agreement and that they are diretly delivered in the territory of the Parties to the Agreement, whereby the transit through territories of other countries, as well as termporary storing, reloading and other are allowed, which depends on geographic, transport, technical or economic circumstances.
The condition for obtaining a preferential origin is unchanged (value of material without origin is not higher than 50% of the price of a product), but material of Kazakhstan and Belarusian preferential origin are considered to be materials with the origin in terms of cumulation of origin.
As the evidence that delivered product has got its preferential status, you have to submit the certificate on origin on form CT-2. The Certificate is valid for 12 months from the date of issuing. Small consignments whose value does not exceed USD 5.000 can be proved by the declaration on origin, which an exporter gives on commercial or other supporting documents.
CUSTOMS, TAXES AND REGULATIONS
Taxes and customs tariffs are constantly revised and are subject to changes without prior announcements.
The Russian Federation constantly provides regular adjustements of its national import regime, including customs and licensing. Levies are mainly set up according to ad valorem values and estimated at the price of the insurance with I freight (CIF) and Incoterms 2000 to the place of border crossing with the Russian Federation. The Russian customs authorities very often makes goods customs clear by kilograms, with intention to prevent from avoiding paying the cutoms duty via double invoicing.
As a member of the Euroasian Economic Union with Belarus, Kazakhstan, Armenia and Kyrgyzstan, Russia is a part of the economic area covering over 180 million people. EAEU was officially established on 1 January 2015 as a political and economic union. It introduced the free movement of goods, capital, services and people. Besides the common market of goods, services, capirtal and labour force, the member states will create the common economic and regulatory policies and will establish Euroasian economic council, Euroasian development bank, as well as the Euroasian parliament.
The requirements of the Russian customs authorities are often complicated and long-lasting. In general, a Russian company is responsible for customs procedures.
The import customs duties cover the majority of products. In addition to the general customs requirements, the import permit and special permits for import that are necessary for a wide range of products, including food products, medicines, and industrial equipment and etc. Sometimes, it is needed to carry out technical examination (at the expense of an exporter) prior to the delivery.
CERTIFICATION OF PRODUCTS, LABELLING AND PACKAGING
Labelling and marking
All products being sold in Russia have to contain relevant data on products, even bulk goods. The information has to be in the Russian language.
Goods have to be packaged in accordance with the Russian standards, taking into consideration extreme climate conditions and handling of goods during the transportation (via truck, railway and ship). Complete documentation is very significant in Russia. A failure in the submitted documents (which is not in accordance with the requirements of an importer/partner) may cause long postponements and additional costs.
A wide range of products requires the certificate on compliance with the Russian standards in order to ensure customs clearance. Some of these requirements are obligatory and some are voluntary. Certification has to be carried out according to the Russian standards via accredited bodies. Alternatively, certification can be done when goods are delivered to Russia via local service providers, although this can mean postponing customs clearance.
Value added tax (VAT) of 18% is applied to the majority of products, 10% on food products and baby equipment that are taxed at border if they are imported. Additional excises are prescribed for tobacco product, alcoholic beverages, automobiles and other “luxury” goods. Personal income tax amounts to 13%, while contributions for mandatory social insurance borne by employers amount to 30%. Corporate income tax is 20%.
The most important interstate agreements relating to the economic cooperation between the Republic of Serbia and the Russian Federation are the following:
- Declaration on strategic partnership between the Republic of Serbia and the Russian Federation, signed on 24 May 2013;
- Agreement between the Government of the Republic of Serbia and the Government of the Russian Federation on granting of the state financial loan, April 2013;
- Agreement between the Government of the Republic of Serbia and Government of the Russian Federation on the cooperation in the area of railway transport, April 2013;
- Free Trade Agreement between the Government of the Federal Republic of Yugoslavia and the Government of the Russian Federation, signed in August 2000; the last Protocol between the Government of the Republic of Serbia and the Government of the Russian Federation on exemptions from the free trade regime and rules on determining the originating country with the Free Trade Agreement, was signed on 14 July 2011;
- Agreement on Air Traffic between the Government of the RS and the Government of the RF, signed on 21 October 2011, came into force on 12 March 2012
- Agreement on International Road Transport between the Government of the Republic of Serbia and Government of the Russian Federation, signed on 23 March 2011, came into force on 9 December 2011;
- Agreement between the Government of the Republic of Serbia and Government of the Russian Federation on the cooperation in the area of tourism, signed on 23 March 2011, came into force on 8 November 2011;
- Agreement between the Government of the Republic of Serbia and Government of the Russian Federation on the cooperation in the area of oil and gas industry, signed on 25 January 2008, came into force on 30 September 2008;
- Memorandum on trade-economic cooperation between the Government of the RS and the Government of Moscow, signed on 26 May 2004;
- Agreement between the Federal Government of the FRY and Government of the RF on fostering mutual investment protection, signed on 10 October 1995, came into force on 19 July 1996;
- Treaty for the avoidance of double taxation relating to income and property tax, between the Federal Government of the FRY and Government of the RF, signed on 10 December 1995, came into force on 7 September 1997;
- Agreement between the Federal Government of the FRY and Government of the RF on the cooperation in the area of agro industrial complex, signed on 31 October 1996, came into force on 10 March 1998;
- Agreement between the Federal Government of the FRY and Government of the RF on the cooperation and mutual assistance of customs officers, signed on 6 November 1996, came into force on 20 August 1997;
- Agreement between the Federal Government of the FRY and Government of the RF on establishing an Intergovernmental Yugoslav-Russian Committee for trade, economic and scientific-technical cooperation, signed in August 1994, ratified on 1 March 1995, came into force on 10 July 1996;
- Agreement between the Federal Government of the FRY and Government of the RF on trade and economic cooperation, signed in August 1994, ratified on 1 March 1995, came into force on 10 July 1996.
- Agreement between the Federal Government of the FRY and Government of the RF on fostering and mutual protection of investments, signed on 10 October 1995, ratified in December 1995, came into force on 19 July 1996;
- Treaty for the avoidance of double taxation relating to income and property tax, between the Federal Government of the FRY and Government of the RF, signed on 12 October 1995, ratified in December 1995, came into force on 9 July 1997.
CCIS ACTIVITIES ON THE PROMOTION OF THE COOPERATION
The prospects for the cooperation with the Russian Federation can be found in higher export potential of Serbian companies, which requires the organization of a combined offer of Serbian products to big retail chains, opening of distribution centres in Moscow or in the Moscow District, and expanded product range and structure of mutual commodity trade. In addition, there is a possibility for expansion of investment cooperation, participation in the implementation of investment projects by Russian companies and encouraging the cooperation on the level of SMEs. In this part, it is very important to underscore strengthening of the regional cooperation through more intensive communication on the level of regional chambers of commerce and industry.
- The Chamber of Commerce and Industry of Serbia signed the Cooperation Agreement with the Chamber of Commerce and Industry of the Russian Federation (CCIRF), on 16 May 2005.
- Agreement on exchange of business information between CCIS and CCIRF was signed in November 2005.
- Cooperation Agreement between CCIS and CCI Moscow District, from 2005.
- Cooperation Agreement between CCIS and CCI Kursk District.
- CCI Vojvodina signed the Cooperation Agreement with the CCI Vladimir District and CCI Podolsk.
- RCCI Valјevo signed the Agreement with CCI Vladimir District, in 2005.
- RCCI Kragujevac signed the Agreement with CCI Smolensk District, in 2005.
- RCCI Užice signed the Cooperation Agreement with CCI Mozhaisk District, from 2005.
- RCCI Sombor signed the Cooperation Agreement with CCI Orenburg District in 2005.
- RCCI Niš and CCI Novgorod District, from 2005.
- RCCI Leskovac and CCI Ryazan District, from 2005.
- RCCI Pančevo and CCI Kaluga District, from 2005.
- RCCI Novi Sad and CCI Leningrad District.
- RCCI Novi Sad and CCI Sankt-Petersburg, from 2005.
- RCCI Požarevac and CCI Tversk District, from 2005, and subsequently the Agreements were signed with CCI Pavlovsk and CCI Pushkin.
- Cooperation Agreement between the CCIS and CCI Krasnodar District was signed in February 2008.
- Cooperation Agreement between the CCIS and CCI Moscow was signed in March 2009.
According to the Protocol from the sixth session of the Inter-governmental Serbian-Russian Committee for Trade, economic and scientific-research cooperation, one of the decisions in the part of Development of the cooperation between CCIS and CCI Russian Federation was to establish a Business Council for the cooperation of the two countries, aimed at achieving better quality and dynamics of the bilateral economic relations of the two countries, closer cooperation of big business entities from the RS and RF. According to this, on 14 November 2008, in Moscow, the Russian part of the Business Council was formed, and on 20 November 2008, in Belgrade, the Serbian part of the Business Council was established.
The Business Council is a mechanism for ensuring direct contacts among businesspeople of the two countries, and as instrument for recommendations and concrete initiatives of companies to the administrations of both countries. The role of the Business Council is important because it can influence with its proposals the authorities of both countries, aimed at removing barriers to business dialogue and thus contributing to more efficient development of trade and economic cooperation between the Republic of Serbia and the Russian Federation.
ACTIVITIES IN 2017:
- Business missions enable businesspeople to learn more about each other, about the specificities of the markets and contribute to future deals. Only in 2016, CCIS organized the visits of the representatives of the Russian Federation Regions, the City of Moscow, Yaroslavl District, Penzen District, Chelyabinsk District, Smolensk District and the Republic of Moldova to Serbia.
- The cooperation of the capital cities and presentation of Belgrade within the event “Days of Belgrade in Moscow” were carried out at the end of May 2017.
- The Chamber of Commerce and Industry of Serbia organized the participation of Serbian companies in two international food fairs in Moscow in 2017, in February «Prodexpo», and «World Food“ in September this year – in its 2016 edition, Serbian companies/exhibitors contracted business deals worth over 34.7 mln EUR. In addition, the participation of the Serbian construction industry was organized in the Construction Fair Mosbuild, in April.
- The International Economic Forum in Sankt Petersburgu, held in the period 1-3 June 2017, is one of the most prestigious business events in the world and, this year, it gathered about 14,000 representatives of the highest international business circles from 143 countries. The State-Business Delegation, headed by the Serbian leadership, line ministries, Chamber of Commerce and Industry of Serbia and Serbian Development Agency, worked on the improvement of the business environment and promotion of business of the most important Serbian companies with the Russian Federation
- Traditionally, in the period 15-17 March, at the Metropol Hotel, the fourth business event and exposition of Russian companies „Zarubežekspo“ was held.
XV jubilee session of the Council of the leaders of the Chambers of Commerce and Industry of the Commonwealth of Independent States (CIS) member countries was held on 27 October 2017, in Bishkek, R. Kirgizstan, on the topic „Role of chambers in the development of trade and economic cooperation of countries“.
- Leaders of the Chambers of Commerce and Industry of Armenia, Belarus, Kazakhstan, Kirgizstan, Moldova, the Russian Federation, Tajikistan, and representatives of the diplomatic and consular missions and embassies of CIS countries participated in the work of the Council, whereas Director of the CCIS Representative Office in Moscow participated as an observer.
- In the period 17-20 October, the CCIS Representative Office in Moscow organized, together with the CCIS Association of textile, garment, leather and footwear industry, a visit of the experts of the Russian garment distributer „Shopping Live“, interested in placement of women’s footwear of Serbian producers.
- The Fifth International Business Forum „Sankt Petersburg and the Slavic World“, organized by the Sankt Petersburg Administration and CCI Sankt Petersburg, was held at the beginning of December, on the topic „Green Technologies“, with the participation of CCIS and experts in the area of environmental protection.
ACTIVITIES IN 2018:
- In the period 3-6 April 2018, in Moscow, the Construction Industry Fair Mosbuild was held, with the participation of about 40 Serbian companies in the area of project design, engineering, construction works, manufacturers of insulation material, floor cladding, joinery and ironmongery.
- A Deputy of the State Duma of the Federal Assembly of the Russian Federation –Aleksey Kobilјev, and Director of the Representative Office of the CCI Russian Federation –Vladimir Grishin, visited the CCI Serbia, on 19 April 2018. The conclusion was made to continue the activities on further liberalization of trade, to create a platform for the cooperation of chambers of the two countries, and to produce the guides for doing business and investing in Serbia and the Russian Federation, to coordinate the activities on information and institutional support to business of SMEs.The Political-Business Delegation from the Arhangelsk District, headed by the Governor Orlov, visited the Belgrade Chamber of Commerce and Industry, on which occasion Business Forum and B2B meetings were organized.
- On 28 May 2018, the CCIS was visited by the high delegation of the CCI Serpuhovsk, from the Moscow District. The Delegation was headed by Anatolij V. Jakushev, President of the Serpuhovsk CCI.