21 January 2018, Sunday, 19:56

Foreign cars will become more expensive in Belarus


Car business players are expecting the introduction of licensing on car imports tomorrow.

Ezhednevnik wondered how the possible restrictions would impact the country’s car market.

On his blog the chairman of the board of the Intellect company group Siarhiej Varivoda reported of the readiness of the government of Belarus to limit the imports of motorized vehicles, belonging to the 8701-8706 groups of goods, in which fall cars. According to the expert, the limitations were discussed at the meeting of the Council on Entrepreneurship Development chaired by Piotr Prakapovich. It is presumed that the term of them being in force may go up to half a year.

In case the licensing of car imports from beyond the Customs Union is introduced, the chairman of the board of the Belarusian Automobile Association Siarhiej Mikhnievich is convinced, car dealers will have more work and greater uncertainty of tomorrow.

“At first you need to appeal to the Ministry of Industry, - the expert presumes. – In the draft resolution general conditions are outlined: the list of the documents (a letter, justifying the need of a license and an application for a license), the term of processing (3 working days) and the free-of-charge nature of the procedure. None of the documents outlines the conditions, allowing the applicant to count on approval. This means that the Ministry of Industry gets full freedom in introducing any conditions or restrictions, under which it grants the permission for imports”.

In Mikhnievich’s opinion, the importers of Ukrainian beer recently found themselves in a similar situation. After the licensing of beers, imported from beyond the Customs Union, was introduced on 1 May, Ukrainian beers were imported under one-time licenses, issued by the Ministry of Trade, which were based on an agreement on minimum retail prices in Belarus. Having not agreed on retail prices, the importer did not get a license.

The next step is getting an license from the Ministry of Trade. “In essence, this institution finishes the formalities of the decision, taken by the Ministry of Industry at the previous stage, - Mikhnievich explains. – In order to obtain a license, it is needed to submit an application, already agreed upon with the Ministry of Industry, its electronic copy, the copies of the foreign trade agreements and attachments to them, a copy of the document of the fiscal registration. Then it is necessary to pay the state duty for the issuing of the one-time license in the amount of one basic fiscal unit, and wait until your application gets processed within 15 working days”.

The time of expectation will amount to about a month. “It is the most favorable case, - Mikhnievich gets indignant, - I did not take into account hurdles on the part of the Ministry of Industry that may emerge!”

The representative of the importer-company agrees with Varivoda: the licensing of imports will lead to the development of transit shipment arrangements through Russia.

“This means that cars that were previously imported directly to Belarus with the payment of customs duties into the budget, will now be importer via the neighboring country”, - the expert concludes.

Again the importers beware of gray importers joining the game. Much more flexible than official dealers, they will fast establish new shipment schemes.

“Licensing will reduce the amount of customs duties, the profit tax, VAT and utilization fee, - Mikhnievich summarizes. – The price on cars in the domestic market will grow due to the imports via Russia. This will affect general inflation figures around the country. At the same time imports of cars, accompanied with outflow of foreign currency, will keep going at both the official and shadow markets. There is no effect to introducing the licensing practice”.

One last thing. Due to time wasting on obtaining a license importers will miss the deadlines to the contracts already signed with clients and will violate the agreement on the running time for foreign trade operations. But these are not the problems of Belarus’ state institutions.