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The Eurasian Economic Union (EAEU) has reached fundamental agreements on the draft Agreement on Electronic Commerce of Goods in the EAEU, which establishes uniform requirements for the operation of EAEU trading platforms. The EAEU includes Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia and occupies a geographical area between Eastern Europe and Western China. Its population is 183 million people, and its GDP is $2.4 trillion.

The agreement provides that tangible and digital goods, as well as services related to e-commerce, will move freely in the countries of the Eurasian "five", and member states will not introduce tariff, non-tariff or other restrictions for sellers of goods and trading platforms that are not provided for in the Union treaty. At the same time, trading platforms should not create discriminatory conditions for sellers and buyers from other EAEU countries. "The main objective of the agreement is to reduce the risks of barriers to the free movement of e-commerce goods due to the lack of a comprehensive Union law in this area and the active development of its own regulatory framework in the member states," said Alexey Slepnev, Minister for Trade of the Eurasian Economic Commission.

It is expected that within the framework of the agreement, the EAEU countries will approve a set of supranational rules. Public offers, product cards, order information, and returns of goods and funds will be processed according to general rules. It is assumed that sellers and trading platforms will be able to standardize their business processes on a single platform.

Consumer rights in e-commerce will be protected in accordance with the legislation of the country where the consumer is located, and a single standard for the return period of goods will be introduced for the EAEU - within 14 days.

The agreement will also include measures to limit spam mailings, mandatory protection of personal data, and the provision of tools for pre-trial dispute resolution based on associations of professional market participants and consumer protection societies.

According to Slepnev, the volume of the e-commerce market in the EAEU is about $82 billion, and by 2030 this figure will grow by 30% and amount to about $110 billion: “Currently, the total share (of e-commerce) in the EAEU retail is about 13%, but there is steady growth. And by 2030, we predict growth to 30%. We are clearly moving towards this forecast.”

There are 78 million regular retail Internet users in the EAEU. Synchronization of e-commerce regulation between the EAEU countries will likely give a significant boost to the development of multilateral trade within the EAEU.

Source: portal “Russia's Pivot to Asia”

On November 25, 2024, a meeting was held between the Chairman of the Board of the REAB Consortium Igor Kalinin and the President and Chairman of the Board of the Ural Chamber of Commerce and Industry Andrey Besedin. At the meeting, a partnership agreement was signed between the parties.

During a long constructive conversation, A. Besedin and I. Kalinin exchanged their vision of the prospects and directions of business development in the Ural region, its need to enter the international market, and also discussed practical ways of interaction between the consortium and the chamber to ensure this development. Specific projects from which this partnership could begin were also discussed.

Among the most popular options:

• assistance of the REAB consortium in the purchase of foreign companies for Russian businessmen as one of the most effective ways to enter the local market abroad;
• assistance of the REAB consortium in the sale of large businesses where the owners are retiring on an entrepreneurial pension, and the chamber's experts in an objective assessment of such a business;
• attracting foreign investors to business assets for sale in the Ural region and Russia as a whole.

For reference: The Ural CCI is one of the oldest and largest chambers of commerce and industry in Russia. In 2024, the UCCI turns 65 years old. The Chamber retains its status as a recognized leader in the Russian CCI system. It is among the TOP-3 chambers of commerce and industry of Russia, both in terms of the number of implemented public initiatives and the volume of services for business. More than 900 organizations of Yekaterinburg and the Sverdlovsk region are members of the Ural CCI. Hundreds business events are held in the Chamber and with the participation of the Chamber annually. In the field of international economic cooperation, the Chamber conducts and takes part in more than 20 business missions per year. Hundreds of foreign trade contracts are concluded and supported with the participation of the Ural CCI.

The Ural region is one of the most economically developed territories of Russia, where the wealth of natural resources is combined with developed industry, and the capital of the region, Yekaterinburg, is the third most developed metropolis in the country.

Belarus has become a partner of BRICS, the press service of the Ministry of Foreign Affairs of the Republic reported. "On November 5, 2024, President of the Republic of Belarus Alexander Lukashenko signed a letter addressed to the President of the Russian Federation Vladimir Putin on our country's readiness to join BRICS as a partner," the department noted.

An official response to a written invitation is a mandatory element of the procedure agreed upon by the member states for obtaining partner status, and it is from this moment that the country is officially considered a partner of the association.

As President Lukashenko pointed out in his message, since its formation, BRICS has been steadily strengthening multilateral cooperation, becoming not just a symbol, but one of the pillars of multipolarity. Not only member states, but also a growing number of countries of the Global Majority associate their hopes for a fair world order with this association.

The Belarusian leader thanked his Russian counterpart for his support, noting with particular satisfaction that the republic's participation in BRICS as a partner is being formalized during Moscow's chairmanship.

“Thus, Belarus confirmed its compliance with the necessary standards and criteria and agreed to follow the guiding principles of the BRICS partner countries model,” the country’s Foreign Ministry noted.

BRICS participants met in such an expanded format for the first time. The round table at Kazan Expo brought together not just partners, but, above all, like-minded people.

Taking into account the new members, BRICS accounted for more than a third of the world's GDP last year. More than the G7 countries. This growth is also fueled by mutually beneficial trade in natural resources. For example, selling oil and gas to China and India allows our country to maintain its leading position in the energy market.

One of the largest transport projects not only for BRICS, but for the entire world has become the international North-South corridor. It passes through Russian ports on the Baltic and Caspian Seas - to Iran, and then to India. This route, in fact, can become a cheaper and faster alternative to the Suez Canal. The main thing now is to attract investment. It was for such tasks that the New Development Bank was created.

Another proposal from the Russian side is the creation of a grain exchange. Currently, the main world platform for trading wheat, corn, and soybeans is located in Chicago, USA. Although the main producers and consumers of grain crops are the BRICS countries. An alternative trading platform will allow us to avoid the speculation of Western stock market players.

Today, more and more countries in the world understand that participation in BRICS brings real practical results. It is beneficial for the economy and safe for national interests. In this regard, the excitement that reigns around membership in the association is understandable. Currently, 9 countries are members of BRICS. At the summit, the participants agreed on a new status for a partner state of the alliance. 13 states are applying for it.

Summing up the summit, world leaders did not skimp on epithets. The President of South Africa called the current summit the most successful, the leader of Venezuela described it as historic, and the President of Bolivia gave the same assessment of the Kazan forum. The countries of the world majority are more open than ever to cooperation with Russia and our country reciprocates.

Source: Federation Council TV Channel

The BRICS countries have agreed to include 13 countries in the category of “Partner States” in the association. However, the entry of these countries has not yet been made official, as the newly established protocol in the procedure requires the country holding the current Chairmanship of the organisation (in this case, Russia, from 2025, Brazil) to hold consultations with the partner countries concerned. 

The new bloc of countries invited to join the BRICS as “Partner States” include Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkiye, Uganda, Uzbekistan, and Vietnam. 

According to diplomatic sources from the Brazilian delegation in Kazan, Venezuela was left off the list due to a veto by Brazil. 

Brazilian Foreign Minister Mauro Vieira stated that the leading BRICS countries have reached a consensus on the ‘criteria and principles’ that will guide the bloc’s future expansion, stating that “Our discussion focused on the criteria and principles for future BRICS expansion. Currently, there are 10 member countries, but there will be more in the future. These principles and criteria have been discussed, approved, and agreed upon. Regarding the list of new members, consultations will begin soon. The Russian Chair will consult with each current member, and we will announce the countries, if not by the end of the year, then in 2025, when the responsibility will pass to the Brazilian Chairmanship of BRICS.”

New BRICS Demographics

These potential new ‘BRICS Partners’ would change the overall BRICS dynamics in terms of global influence. In total, this expanded BRICS would account for just under 43% of global GDP, compared with the G7’s 30%. In population terms, the new BRICS, if all the proposed BRICS Partners joined, would account for about 57% of the total global population, as opposed to 10% for the G7.

In terms of simple demographics, the emergence of what may become the world’s largest multilateral organisation will start to make multiple countries think about the developing, new geopolitical dynamics and the implications. At present, it appears the West is not aware. But with another 20 countries having also applied to join BRICS, and not yet part of the overall structure — change to global geopolitics and trade flows is almost certainly arriving. The 2025 BRICS summit will be held in Brazil, when both these developments and continuing new ones will almost certainly have manifested themselves. The world is changing faster than many people realise.

Source: portal "Russia's Pivot To Asia"

The BRICS Pay system has been launched, with immediate implications for the future role of the US dollar, and the use of financial sanctions upon other countries. The system bypasses the US controlled SWIFT payments system, disregards the US dollar as a preferred currency and allows instant settlement in sovereign currencies instead.  It is likely to be followed, in time, by digital sovereign currencies.

BRICS Pay is a decentralised and independent payment messaging mechanism system under development by the BRICS member states, and is similar to the SWIFT payments interface. BRICS Pay is a joint venture between the BRICS member states to receive and make payments in their own local currencies.

It was originally launched in 2018 by the BRICS Business Council. The team that cooperatively runs BRICS Pay consists of financial, banking technology experts from the original founding nations of BRICS — Brazil, Russia, India, China and South Africa. The purpose of BRICS Pay is to make international payments less costly and complicated, encouraging international cooperation between the growing crowd of BRICS members. In January this year, the original five BRICS members were joined by Egypt, Ethiopia, Iran, and the UAE. More members — a further 30 countries have applied to join — are expected to bee announced at the 2024 BRICS summit which takes place from 22-24 October.  

According to the BRICS Pay website, numerous government, and respective technological, financial, legal, and consulting firms have united to form the BRICS Pay Consortium, operating under the principles of a decentralised autonomous organisation (DAO).

“The Consortium adheres to the regulations of each country where its members operate,” the website further states. “It is a network-based entity without a central headquarters. The Consortium’s membership is not publicly disclosed.”

According to BRICS Pay, “The Bretton Woods-era global financial system is undergoing a significant transformation. We are witnessing rising global debt, increasing wealth inequality, and the fragmentation of trade and finance systems. Our goal is to ensure equal access to financial technologies and global wealth, providing everyone with the opportunity to reach their full potential. Today, we begin building a new, fair, and decentralised financial system for the future.”

The BRICS Pay project aims to facilitate seamless transactions between member states and provide an alternative to existing global financial infrastructure dominated by Western systems like SWIFT. The key objective is to foster financial cooperation among the BRICS nations and reduce dependency on the US dollar in trade settlements, thus creating a multipolar financial world order.

It means that with a decentralised, autonomous system, users can bypass the use of the US dollar and Euro and use their own currencies. Transactions will be immediately settled at the prevailing currency exchange rate, with no additional mark ups, or need for corresponding banks. It means that a buyer in China can receive a QR code for payment from a Russian vendor, accept it, and the money then auto deducted in Chinese RMB Yuan from the Chinese account and instantly deposited in Russian Rubles to the Russian users account.

BRICS Pay accounts can be set up easily on your smart phone, linked to your respective bank account or other financial platform, while payments are made via an auto-generated QR code, and shown to the recipient who scans that and completes the transaction. 

This has obvious implications for the sanctions issued on countries such as Iran and Russia, who can now make payments in their respective sovereign currencies instead. These currencies — and those of most of the BRICS countries — are also based on real assets, rather than debt, which is the case in the United States. It is a parallel financial system that completely bypasses the need for U.S.-controlled financial institutions.   

The ultimate vision for the system is cross-border retail support across the BRICS+ bloc. Future plans are to examine business-to-business payments and then develop the BRICS+ UNIT, being the crypto proposition for the block.

The BRICS Pay system still needs to be rolled out however, with BRICS members banks, corporate and individual accounts all requiring connectivity. That process will take time, with the BRICS pay app on your phone probably not a useable feature until 2028.  However, there have been reports that in Russia, a BRICS Pay service for non-cash payments for foreigners may appear in Russia this year. BRICS Pay will make it possible to pay with Visa and MasterCard cards inside Russia and, in the future, with the MIR card beyond its borders. 

Source: portal "Russia's Pivot To Asia"

Syria has officially applied to join the BRICS group. According to Syrian Ambassador to Russia Bashar Jaafari, the country is interested in participating in the organization and has already sent the relevant written requests. The ambassador made this statement on the sidelines of the forum "North Caucasus: New Geostrategic Opportunities".

Russia welcomes Syria's desire to become a member of BRICS and will assist in this, Deputy Head of the Department Sergei Ryabkov said in April. According to the diplomat, "a queue for joining BRICS has already formed": at that time, more than 30 states had already expressed their desire to join the association.

Recall that Egypt, Ethiopia, Iran, Saudi Arabia and the UAE recently became new members of BRICS. Malaysia and Azerbaijan have submitted applications for membership, and Turkey also intends to join BRICS.

The next BRICS summit will be held in Kazan on October 22-24, 2024, where the issue of admitting new states to the union may be considered.

In signs that more wealth and capital is moving away from Europe to Asia as a result of Western sanctions, Soven 1 Holding Limited, an investor from the UAE, has signed an agreement to purchase the Austrian Raiffeisen Bank International’s 87.74% stake in the Belarus-based subsidiary Priorbank, and its subsidiaries. Raiffeisen’s core business has been built up over decades in developing financial services in the Commonwealth of Independent States (CIS) markets, yet it has been under intense political pressure to pull out of the Russian and other related markets by both the European Union and regulators in the United States, both who have threatened to sanction Raiffeisen if it does not comply.

Due to legal complexities in Russia – exiting Western banks need Kremlin approval, which has not easily been forthcoming – Raiffeisen have still not exited Russia. They will be hoping that the sale of their Belarus subsidiary will alleviate some of the Western political pressures it has been enduring.    

The Belarus transaction is subject to regulatory approvals and with closing expected in Q4 2024.

The UAE’s Soven 1 Holdings has effectively purchased cheap European money, as Raiffeisen are reported to have sold the Belarus entity at a discounted €300m, (US$334 million) being the difference between the purchase price and Priorbank’s real book value. This means that EU businesses are being pressured to exit markets at assets discounts of between 15-20% just to comply with their politicians demands. This haircut will also be felt by Austria’s public investors – Raiffeisen are listed on Austria’s Weiner Bourse. Austrian nationals are now having to take haircuts on what have been profitable businesses because of decisions made by their own politicians. It is Asian investors such as the UAE group who are now buying these discounted opportunities.      

Priorbank has been operating in Belarus since 1989 and is one of the largest Belarusian banks by assets. The move by UAE investors may be a trend for other, Russia-friendly investors to start picking off politically undesirable European-owned assets as sanctions threats now equate to discounted asset values. This illustrates that knock down M&A bargains are available in the Russian and CIS region.

Source: portal "Russia's Pivot To Asia"

A partnership agreement was signed between the REAB Consortium and the Eurasian Business Association in Moscow in the beginning of September 2024. On behalf of the EAAB, the document was signed by the association's president, Maxim Chistyakov, and on behalf of the REAB, by the consortium's president, Denis Devyatkin.

The Eurasian Business Association is a non-profit corporate organization that unites entrepreneurs from the member states of the Eurasian Economic Union (EAEU).

The purpose of the EAAB is to develop and strengthen Eurasian economic integration, coordinate entrepreneurial activities, and represent and protect the common property interests of the association's members.

Its main objective is to comprehensive assistance to the association members in sustainable, inclusive economic development, increasing competitiveness and scientific and production potential, increasing the volume of investment and innovation activity.

The implementation of the set tasks is carried out through the expansion of areas of economic cooperation, improvement of the regulatory environment, development of effective interaction in the B2B and B2G format, as well as with the EAEU bodies, participation in the development and examination of draft acts of the EAEU bodies and national legislation, assistance in eliminating barriers, restrictions and exceptions in the internal market of the EAEU.

Representatives of the association take part in the work of various advisory committees and working groups under the EAEU bodies, executive and legislative authorities.

By signing the agreement, the parties agreed on cooperation and partnership in the following areas:

• Exchange of business information
• Participation in public events held by the Parties
• Promoting economic development and interaction of the represented states, their business circles, development of partnership contacts, stimulation of investment activity
• Other ways of implementing the statutory goals of the Parties

During the dialogue, both parties agreed that this partnership creates new opportunities for promoting the interests of Russian business on the Eurasian continent and in friendly economic unions on the territory of the countries participating in them.

This was reported by the press secretary of the Ministry of Foreign Affairs of Azerbaijan Aykhan Hajizade.

On July 3, within the framework of the summit of the Shanghai Cooperation Organization in Astana, the "Joint Declaration on the establishment of a strategic partnership between the Republic of Azerbaijan and the People's Republic of China" was adopted.

According to paragraph 4.5 of the declaration, the Azerbaijani side expressed its desire to join BRICS, and the Chinese side welcomed Azerbaijan's participation in BRICS cooperation.

BRICS is an intergovernmental organization created in 2006, which includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.

The Russian President Vladimir Putin has met with Turkish President Recep Erdogan in Astana on the sidelines of the Shanghai Cooperation Organisation annual Heads of State meetings, with both sides also engaging in trade development talks. Current bilateral trade is running at about US$55 billion, with Alexei Yerkov, the Russian Ambassador to Turkiye, also present at the discussions, later stating that “Our two countries are aiming for US$100 billion in trade, a huge, but attainable number. Turkiye is a crucial trade partner for Russia over a wide range of industries. While construction is a trade lynchpin there is still room for more.”

Putin said that “All our large bilateral projects are being implemented on schedule. There are no delays. I would like to note that in 2023 the Russian tourist flow in Turkiye reached a record high with 6.3 million of our tourists visiting Turkiye. I would like to express my gratitude for the conditions the country has created for Russian tourists.”

Erdogan stated that “I can refer to the Akkuyu Nuclear Power Plant, which we are building together. We hope to put it into operation in the nearest future. With that, we have had contacts regarding the construction of another nuclear power plant in the city of Sinop. I believe we can and we will make serious steps. I want to point out that the Turkish Ministry of Energy and Natural Resources continues its contacts with colleagues in Russia. Following their meetings, I want to note that Botas and Gazprom continue their contacts.”

Turkiye is also interested in joining the BRICS group and will almost certainly be sending a delegation to Kazan in October, where the BRICS Heads of State annual conference will be held. Interestingly, about 50% of Kazan’s population are ethnically Turkic, with Tatarstan attracting about 25% of all Turkish investment into Russia. We previously discussed Turkiye’s trade with the BRICS members here.   

Erdogan also invited Putin for a state visit to Turkiye, with this likely to take place in the autumn.

Source: portal "Russia's Pivot To Asia"

The Indian government has approved a proposal for building a large deep water port on its western coast to connect it with major global trade networks and handle trade with Russia, New Delhi has announced. The port, to be built at Vadhavan in the Maharashtra state, would aid trade flow through the International North-South Transportation Corridor (INSTC) and the India Middle East Europe Economic Corridor (IMEEC). The facility will become a vital part of the International North-South Transportation Corridor for shipping goods via Iran and onto Russia and other destinations.

During his July visit to Moscow, Indian Prime Minister Narendra Modi stressed the importance of improving connectivity with Russia, which would mean developing the INSTC. The two countries have set a trade target of US$100 billion by 2030.

An agreement for the IMEEC corridor, which aims to improve connectivity and economic integration between Asia, the Persian Gulf, and Europe, was signed last year at the G20 summit held in New Delhi. However, the project has run into delays due to the conflict between Israel and militants in Gaza.

Including the acquisition of land, the Vadhavan port would cost 76,220 rupees (US$9 billion), Indian Ports, Shipping and Waterways Minister Sarbananda Sonowal told the Indian Parliament. The port will be developed through a public-private partnership led by the Jawaharlal Nehru Port Authority and Maharashtra Maritime Board, according to Sonowal, who expects the project to create one million jobs. The location is about 10 km from India’s National Railway grid and about 35-40 Km from National Highway 8, which leads to New Delhi. Both will develop spurs to reach Vadhaven.

The facility will handle 15 million TEU (twenty equivalent unit) containers after the first phase of construction is complete and 23.2 million TEUs after the commissioning of its second phase. Once completed, the port would rank among the world’s ten biggest container ports, and is expected to be operational by 2030. The Indian government currently operates 12 major ports across the country.

The move to develop Vadhaven Port is one of the most significant investments yet made by a foreign country to specifically assist the development of trade with Russian and is indicative that the country is considered a long-term growth prospect in the Global South.

Source: portal "Russia's Pivot To Asia"