Eurasian Economic Commission

Legal basis: “Договор о Евразийской экономической комиссии”. Art.1, Art.2, Art.3

Composition/structure:

The composition of the Eurasian Economic Commission is based on a two-level separation, consisting of Council of the Eurasian Economic Commission and Board of the Eurasian Economic Commission (Art.18(1) EAEU Treaty). The composition of the Council of the Eurasian Economic Commission consists of 5 commissioners on the whole, each one being delegated from respective member states (Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia). The Council’s Presidency rotation is executed annually among all the deputy Prime Ministers appointed by each member state of the EEC. The same structural composition applies for the Board of the Eurasian Economic Commission, except that each member state appoints 2 commissioners for the execution. Among all ten, one of the commissioners is selected as the Chairman of the Board and the Commission. The appointment timeline for each member of the Board of the Commission is elongated to four years, with a potential for the extension if ordered so by Heads of States of the member states.

Key functions/jurisdiction:

The Article 3 of the Treaty on the Eurasian Economic Commission (uphold in November 18, 2010) defines the key competences and scope of functions of the Commission. On executive basis, all the power regulations within the framework of the Custom’s Union Commission are assigned to the Eurasian Economic Commission (the functional basis of the current ratified changes can be observed in the Treaty of the Eurasian Economic Union). That is, the Commission functions as a regulator of the EAEU (Art.18). Mainly, each competence field is delegated separately to each Board member for a supervision of functional industry areas and various forms of economic activity. Along with the above-mentioned, the EEC arranges a successful implementation of international treaties, thus originating a comprehensive legislative basis of the Customs Union, Single Economic Space and Supreme Eurasian Economic Council. In comparison to European Commission, the Eurasian Economic Commission has a right to adopt legislative acts in the fields highlighted in the Treaty.

Decision-making rules:

The mechanism of decision-making of the EEC is described as “close, phased and coordinated” cooperation by the EAEU Brochure (2015). The procedure of decision-making for preparation and formalization of decisions and recommendations of the Commission, instructions and decisions of the Supreme Eurasian Economic council, Eurasian Intergovernmental council and EEC Council differ from that of international acts. Initially, particular structural EEC unit takes an initiative into consideration by drafting a legal act, which later will be submitted to a session of the specialized Consultative Committee. This draft regulatory legal act is to be examined by a specialized Consultative Committee along with commissioners from the EEC and authorized bodies of the Parties. Further, the discussion leads to implementation of all amendments, considering opinions and positions of the Parties. This draft legal act will later proceed to the considerations of the Board of the Commission by a specialized Minister in charge. Respective copies of decisions, recommendations and instructions of the EEC Council on the matter will be sent to the Ministries of Foreign Affairs and the Governments of the Parties. Almost the same procedure applies for the international acts with the exception that during the last procedure, a draft international act undergoes signature procedure by the person authorized to sign it and enters the depository of international acts. In the framework of its above-listed competences, the EEC circulates non-binding documentary tools such as recommendations, as well as decisions that are binding to the Parties. Both the Board and the Collegium of the Commission execute decision-making through special majority or consensually (Art.7).

Inter-institutional dynamics and accountability:

With due respect to the industry-focused content of the Treaty on the EAEU, the Union is claimed to care about harmonization of its institutions as well. The Eurasian Economic Commission, being a supranational regulatory body of the Union, mainly acts on a sovereign basis. Yet, the inter-institutional dynamics can be observed in that the EEC acts as a budgetary administrator of the EAEU, as well as acting in courts (by drafting proposals) and confirming civil-law contracts, which further is approved by the Council. In addition, with the Supreme Council’s direction, the Commission represents interests of the EAEU institutions with third countries and associations. (EAEU Brochure, 2018).

Part Two:

Research question:

Upon its launch in 2015, the EAEU received a specter of critical views on its functionality and transparency. Some may deride it as a fictional project in favor of Russia’s geopolitical motives, and the other half perceives EAEU and EU cooperation as a pragmatic diffusion of rigidity in-between Russian & European relations. Whereas the institutional constitution of EAEU is claimed to be a duplicate of the EU (Tatiana Valovaya, Minister of EEC, 2012), the functionality of institutions is far from perfect, or near perfect. A key independent institution, the Eurasian Economic Commission, is a delegating regulator of most of the integration processes within the Union. Formally, the EEC is proclaimed to be independent from members states, commissioners’ decisions mainly highlighting common welfare of the Union rather than each individual state. On this ground, the given essay will attempt to answer the research question “To what extend is the Eurasian Economic Commission independent?”. The used means are an analysis of respective literature and review of the legal findings from a prism of a principal-agent theory and direct effect of decisions. The findings suggest that the functionality of EEC is not fully independent and, being tied to the supreme approval, is unable to impose the direct effect on the member states.

Literature review

Below are the reviews for four academic works, which discuss EEC partially from institutional structure and more extensively from a legislative prism. The article to initiate is “Eurasian Economic Union Deals, Rules and the Exercise of Power” (2017) by Rilka Dragneva and Kataryna Wolczuk, associate professors from Birmingham University. The analytical work preserves an extensive and authenticated assessment of the EAEU. Among several chapters of discussing different constituents of the Union, the authors argue that that EEC lacks appropriate institutional governance. However, even though the authors agree that the absence of commitment to “deep economic integration” is the cause of slowed progress of the integration process along with poor institutional management, they do not provide sufficient data to reflect it. Yet, their analysis of the Commission provides a clear ground for the evaluation of the Commission’s work by comparing legal documents and amendments. The authors’ conclusion that the Union’s initial grand narrative is least expected to be fulfilled, due to diversified preferences of member countries and hesitant work of institutions, is rather superficial, due to the absence of foreseeable data.

The next article called “Mechanism for Challenging Decisions, Actions (Inactions) of Eurasian Economic Commission” is written by Aleksandr Kovalyov, a Russian lawyer. In the work, the author examines challenging constituents of decision-making and applicability of actions (inactions) of the EEC in order to demonstrate its functioning order. In the analysis, the author determines the legal mechanisms of challenging decisions and actions (inactions), reveals the essential factors such as the legal status of claimants challenging the decisions. Along with this, Kovalyov also identifies the presence of differentiated approach in regard to different categories of applicants, whose claims are to-be-reviewed or not. Consequently, this highlight of “out-of-court settlements” in legal disputes suits the formal evaluation of decision-making in the EEC. As a result, the author identifies so-called loopholes in decision-making mechanisms that are in potential to cause possible negative after-effect in a way of neglecting the right of an external applicant to challenge the legal decisions of the EEC. Kovalyov’s proposal about the practicability of enhancing the mechanism to level the inconsistencies that can exist in reality are helpful in improving the implementation of this mechanism of challenging the legal decisions in the EEC. The author’s discussion on the inconsistencies found in the legal decision-making mechanism supports the argument of dependent performance of duties in the Commission; accordingly, its excerpts can be used in the analytical part of this essay.

The following literature is the “Comparative Institutional and Political Analysis of the European and Eurasian Integration” by Glittova Yana. The comparative article focuses on the identification of similar and distinctive features of the integration processes both relating to the EU and EAEU, in the means of political aims and institutions. In her comparative analysis, the distinguishable and similar characteristics of European and Eurasian integration processes lead to political compartmentalization. As the basis, comparison includes the conceptual framework, the integration method, the degree of dynamics, the sovereignty of member states, the socioeconomic factor, institutional, legal and political frameworks, respectively. The article also reveals a detailed description of the institutional structure of the EAEU, including the Commission itself. The author narrates about integration in a rather positive way, claiming that the Eurasian Union could adopt the concept of the European Union to comparative degree only. This theoretical analysis is based on a more descriptive manner than a critical assessment of the effectiveness or inefficiency of practices that are implemented within the European Union. Nevertheless, this discussion of the hierarchical warehouse of the decision-making process provides the necessary ground for the development of an argument that the Commission predisposes only a vertical warehouse of decision-making.

The last work is “The Legal Character of the Decisions of the Eurasian Economic Commission and Its Application in Domestic System of the Republic of Kazakhstan” drafted by PhD fellows from KazHLU. The report carries forth a qualitative study of the Eurasian Economic Commission’s legislation. The authors examine the Eurasian Economic Union's origins and competences, above which is the evaluation of the elements of the Union's supranationalism and its institutions. The initial selection of this article was mainly motivated for it to be one of the few available legal analyzes of the Commission. The analysis is quite superficial, not providing a room for a critical assessment of the work of the Commission and legal entities in the courts. Yet, the deliberate examination of legal norms and the decision-making mechanism of the Commission, written by Kovalev, is an excellent counterpart to this work, as it speaks of practical inconsistencies and shortcomings in the mechanism of adopted legal acts.

Analytical framework

The principal-agent model is a probabilistic framework that aims to define core variables for identifying and describing delegation and control processes in politics. According to Tallberg, it helps researchers to consider how and why certain actors (principals) assign authority to other actors (agents) to execute a specific function. This model is defined by the principal's act of delegation and can be viewed as a contractual arrangement between a principal and an agent. Most of the delegated activities within the EAEU are formalized in the EAEU Treaty, where Member States assign competences and powers to the respective EAEU institutions. When the Commission has legislative rights granted by the EAEU Treaty and is delegated by the Council to execute process of foreign negotiations is one of the examples of the model. In such manner, a macro-delegation is mainly accompanied by a number of micro-delegation activities which take place in regular decision-making processes of the Union (Dür and Elsig, 2011).

Analysis

The Eurasian Economic Commission is the main body of the Union responsible for overseeing further integration. In the EAEU’s official website, the EEC is claimed as “a permanent supranational regulatory body”. The legislative data shows that the Commission’s decisions are to be directly applicable in member states (Art.1 of Commission Regulations, EAEU Treaty). In practice, despite the Commission’s possession of particular supranational characteristics, some main features are curtailed. This results in a weakened direct effect of decisions on the member states.

One of the evident elements of intergovernmentalism in the work of the EEC can be observed in the Art.3 of the EAEU Treaty, which deems the Commission’s principle of work as based on “ensuring mutual benefit, equality and respect for the national interests of the Member States”, instead of interest of the Union. Along with that, the General Provision also claims the Commission’s competences and decisions to have a “binding effect for the Member States, organisational and administrative dispositions”, as mentioned above. The PA theory is applicable here, since most of the delegated activities within the EAEU are formalized in the Treaty, where Member States assign competences and powers to the respective EAEU institutions. However, this delegation of power results in poor autonomy of the Commission from member states. Mainly, within member states, the domestic decision-making is concentrated with little respect to the EAEU institutions. In case of disagreement with the Commission’s decisions, member states can appeal to the higher bodies such as Supreme Council, a phenomenon recently discovered as “Belarussian elevator system” (Dragneva, Wolzcuk, p.15). It is part of a decision-making structure comparable to the hierarchical organization of administrative authority in the Member States, commonly referred as the vertical system. In this regard, Sean Roberts, an associate professor at George Washington University, states that the EEC is limited in powers of settling disputes. “If the problem gets too big, it will go to the level of the Supreme Council for resolution, which means Putin (alongside the other heads of state)” (EurasiaNet.org). In elaboration, it would mean that there is no space or opportunity for the Commission to take important decisions within the bureaucratic and politized structure of the EAEU; rather, it appears to draft decisions for the higher bodies, including Heads of States or government. In some way, abrupt statement of Sergei Abashin, a Central Asia expert at the Russian Academy of Sciences, has a relevance here: “In a community it is always the selfish interests of each country that takes priority ,…, not by the institutions, but presidential administrations”. Thus, it is high-level policy that largely decides the intensity and vision of integration, leading to impractical timetables and top-down priorities being imposed on the Commission and undermining its powers (Dragneva, Wolzcuk, p.16).

By the same token, the Treaty of Astana limited the Commission’s supranational capacity by withdrawing some of its former powers to control the Member States' enforcement. Namely, the Art.20 of the Treaty of Eurasian Economic Commission entitled the EEC with competence to bring a member state before the Court in case of a non-compliance (EACU & SES phases, e.g.), which is not a case anymore with the ratification of the Astana Treaty. When the collegium addressed the question of Commission’s inability to control the degree of compliance by a member state, the complaint led to nothing more than an appeal for intervention. One example of such inconsistency is the dispute between Russia and Belarus on the ground of meat product regulations. The Minister of the EEC Sergei Sidorskii admitted that the Commission finds Belarussian meat products consistent with requirements, but there is no such procedure to control domestic institutions of a non-compliant member (Russia's food safety agency, in this case) to remove punitive measures it had enforced towards Belarussian meat products. On top of that, in the legislative data, the EAEU Treaty does not clarify the legal relationship between the Union activities and national legislation; it is rather the member states deciding this relationship on the domestic level (Karliuk, 2015, p.12). Thus, based on their own constitutions, member states decide the applicability of legal decisions of the EAEU institutions on the domestic level.

To conclude this analysis essay, the creation of an unified economic zone as the ultimate integration outcome indicates a clear aim to consolidate a shared regime. Yet, as seen from the analytical evaluation above, the Astana Treaty revealed little degree of independence of the Commission, when contrasted with the intervening term of the Treaty of EEC. The desires of Member States to retain influence of their obligations ensures the supranational ethic of the EAEU is restricted. In contrast, this status quo allows the member states various benefits. As Dragneva and Wolzcuk conclude, the main advantage of member states is “the flexibility to tailor integration to their changing preferences” (p.17). Despite that, there is little forecasted change for the functionality of the EAEU, mainly being a proclaimed duplicate of the European Union in Eurasia, with respective pros and cons in developing the integration process.

References

Daulenov M., Irzhanov A., Oralova E. (2015) The Legal Character of the Decisions of the Eurasian Economic Commission and Its Application in Domestic System of the Republic of Kazakhstan. Institut Zakonadatel’stva I Pravovoi Informacii Respubliki Kazakhsta,n 5(41)

Dür, A., & Elsig, M. (2011). Principals, agents, and the European Union’s for- eign economic policies. Journal of European Public Policy, 18(3), 323–338.

Glittova Ya., Kosov Yu. V. (2016) Comparative institutional and political analysis of European and Eurasian integration [Sravnitel’nyi institutsional’no-politicheskii analiz evropeiskoi i evraziiskoi integratsii]. Administrating consulting [Upravlencheskoe konsul’tirovanie]. #7. P. 27–40. (rus)

Karliuk, M. (2015). The Eurasian Economic Union: An EU-Like Legal Order in the Post-Soviet Space? SSRN Electronic Journal. doi: 10.2139/ssrn.2664519

Kovalyov, A. (2016). Mechanism for Challenging Decisions, Actions (Inaction) of Eurasian Economic Commission. Актуальные Проблемы Российского Права. doi: 10.17803/1994-1471.2016.70.9.168-175

Nugent, N. (2010). The Government and Politics of the European Union, 475–476. doi: 10.1007/978-0-230-36611-4

Schermers, H. G., & Blokker, N. (2011). International Institutional Law. Leiden: BRILL.

Tallberg, J. (2002). Delegation to supranational institutions: Why, how, and with what consequences? West European Politics, 25(1), 23–46.

Valovaya, T. (2012), ‘Eurasian Economic Integration: Origins, Patterns and Outlooks’, EBD Eurasian Integration Yearbook.

Wolczuk, K., & Dragneva, R. (2017). The Eurasian Economic Union: Deals, Rules and the Exercise of Power. (pp. 1-15). Chatham House. https://www.chathamhouse.org/sites/files/chathamhouse/publications/research/2017-05-02-eurasian-economic-union-dragneva-wolczuk.pdf

Links for legal documents:

http://www.eaeunion.org/?lang=en#about-administration

http://www.eurasiancommission.org/en/nae/news/Pages/16-05-2014-5.aspx

http://www.eurasiancommission.org/ru/act/trade/Documents/Договор%20о%20ЕЭК.pdf

http://www.eurasiancommission.org/ru/Documents/2797_1_EEK_ЦИФР_англ__sait_rasv.pdf

http://www.eurasiancommission.org/ru/Documents/broshura26Body_ENGL_final2013_2.pdf

https://www.un.org/en/ga/sixth/70/docs/treaty_on_eeu.pdf