Russia, Iran Agree to Zero Customs Duties

Russia and Iran have reached an agreement to lift customs duties on imported goods by March 2024, Kambiz Merkazemi, Member of joint Iran-Russia Chamber of Commerce, said.

Merkazemi also emphasized the pivotal role of this development in resolving issues related to customs, tariffs, and market competitiveness, IRNA reported.

"With the development of commercial relations between Iran and Eurasian Economic Union's member countries, the issue of operators in the field of customs, tariffs and competitive market will be solved by the end of March 2024," Merkazemi said on Sunday.

He outlined the key elements of this resolution, emphasizing the adoption of settlements in national currencies, fostering free trade, and the opening of Iran's customs borders with Russia, Armenia, and Belarus.

Merkazemi also noted that the infrastructure for realizing the free trade agreement is being built "at a rapid pace" due to the high level of understanding between Iranian and Russian negotiators.

The groundwork for this agreement was laid through the Iran-Russia collaboration within the Russia-led Eurasian Economic Union (EEU). An interim agreement, signed in 2018, marked the initial phase of establishing a free trade zone between the EEU and Iran.

This agreement led to reduced or zero import customs duties on an array of goods, setting the stage for a substantial boost in mutual trade.

The temporary arrangement was designed to relax existing customs regulations and encourage higher trade turnover. Following years of negotiations and cooperation, Iran and EEU solidified their commitment to a free trade zone in January 2023.

The agreement, which came into force at the end of September 2023, stipulates zero tariffs on 90% of goods, ushering in a new era of economic collaboration.

The EEU is an international integration economic union, established on the lines of the Customs Union and the common economic space in 2015. Its current members are Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.

The union's diverse membership reportedly underscores its global appeal, with over 40 countries and international organizations expressing interest in free trade agreements. Notable nations such as China, Indonesia, Israel, South Korea, Egypt, and India have engaged in negotiations with the EEU.

The agreement between Russia and Iran comes amid increasing cooperation between the two nations, driven in part by Western sanctions against both countries. Between January and October 2022, trade between Moscow and Tehran reached $4 billion, surpassing the figure for 2021.

According to Russia's Customs Service data, Russian exports to Iran surged by 27%, while imports from Tehran jumped by 10%.

Last year, the two countries reached several agreements, including for the purchase of aircraft equipment, joint construction of gas pipelines and gas field development.