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Russia ratifies deal on duty-free gas, oil product, diamond exports to Armenia

The agreement prohibits Armenia to re-export Russia’s oil product, natural gas and diamond supplies to third countries free of export duties

The Federation Council ITAR-TASS /Sergei Fadeichev

The Federation Council

© ITAR-TASS /Sergei Fadeichev

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MOSCOW, June 25. /ITAR-TASS/. The Federation Council has ratified on Wednesday an intergovernmental agreement with Armenia on cooperation in commodity supplies to the South Caucasus republic.

The document signed on December 2, 2013, stipulates Russia’s duty-free supplies of petroleum products, natural gas and natural uncut diamonds to Armenia before the ex-Soviet republic joins the Eurasian integration space based on the Customs Union of Russia, Belarus and Kazakhstan.

The agreement has been concluded for an indefinite term and has been temporarily applied 20 days after its signing. The provisions on the duty-free exports of natural gas, petroleum products and diamonds will be in effect until December 31, 2014, and may be extended upon the parties’ consent.

The agreement prohibits Armenia to re-export Russia’s oil product, natural gas and diamond supplies to third countries free of export duties. Otherwise, Russia has the right to demand compensation in US dollars equivalent to the value of export customs duties effective in Russia as of the date when such violations are exposed.

Such compensation may be substituted with the lower amount of commodities supplied to Armenia free of customs duties compared with the amount stipulated in the agreed delivery balance.

Russia has also the right to reduce or suspend duty-free commodity supplies to Armenia. The amount of compensation, which Armenia fails to pay to Russia, will be acknowledged as Armenia’s debt to Russia and will carry interest.

Upon termination of the agreement by either party, Armenia’s obligations to pay compensation to Russia and/or acknowledge unpaid amounts as its state debt to Russia will stay in effect until they are fully discharged by the South Caucasus republic.

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Armenia Oil & Gas Customs Union

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