English

Legal loopholes that enabled “solvent and diluent” schemes have been closed, ambassador says

 

The loopholes in Customs Union regulations that enabled Belarus to run “solvent and diluent” schemes have been closed, Russian Ambassador Aleksandr Surikov told BelaPAN on Monday.

Belarus is believed to have used the schemes to export diesel fuel and other petroleum products under the guise of solvents, diluents and lubricants.

Belarus, Kazakhstan and Russia solved this problem earlier this month, Mr. Surikov said.

Contracts on the supply of crude oil from Belarus to Belarus have been signed on a quarterly basis this year to prevent the resumption of such practices, but now the precaution is no longer necessary, he said. The next contract will cover the period between July and December, he added.

Since 2011, Russian oil exports to Belarus have not been liable to duty. The price of oil sent to Belarus is based on the principle of equal profitability: Russian suppliers’ revenue from deliveries to Belarus should be equal to the revenue that would be derived from the export of petroleum products if the oil were refined in Russia.

When petroleum products made from Russian oil are exported outside the Customs Union of Belarus, Kazakhstan and Russia, Belarus is required to transfer the amount it collects in export duty to Russia. The duty rate for the export of gasoline is currently $377 per ton.

Russian officials have repeatedly expressed concern about a dramatic increase in the export of solvents from Belarus, saying that Belarus may be exporting diesel fuel and other petroleum products under the guise of solvents, diluents and lubricants in order to avoid transferring the export duties it collects to Russia.

Russia`s Federal Customs Service reported that Belarus` export of solvents and diluents had jumped 8.6-fold from 242,000 tons in 2010 to 2,073,000 tons in 2011, whereas Russia had exported only 16,900 tons.

According to official data, in the first half of 2012, the export of solvents and diluents increased 4.9-fold year-on-year and that of lubricants 47 times.

Belarusian government officials insist that the export of solvents and lubricant was ended in August.

Moscow demanded that Belarus pay $1.5 billion to compensate Russia for its "losses."