Updated at 14:58,21-10-2016

Russia wants MAZ and Grodno Azot for solvent smuggling

13-03-2013, 20:48
Russia wants MAZ and Grodno Azot for solvent smuggling

Belarusian enterprises may be used as compensation for Russia's losses from solvent smuggling.

Interfax news agency learnt it from a source close to the negotiations on setting up joint ventures on the basis of MAZ and Grodno Azot.

The source notes that Russia expects no serious breakthrough in the talks with Belarus on the issues during a meeting of the Supreme Council of the "union state" scheduled for Friday.

"Russia suffered significant losses due to the solvent problem. The Russian side understands it cannot get money from Belarus, so their aim is to make Belarus more pliable in the talks on setting up joint ventures," he said.

The governmental agencies and enterprises of Belarus need special preparation to reach an agreement.

"The Russian side has information that no progress has been made in the projects under negotiation. I don't think anything will change at the Supreme Council meeting," the source added.

Belarusian first deputy prime minister Uladzimir Syamashka already held talks with Russian deputy PM Arkady Dvorkovich.

Dvorkovich's representative confirmed the talks had been held, but declined to give comments.

At the end of 2012, Russia and Belarus failed to sign an indicative balance of oil and oil products supplies for 2013. Minsk wants 23 million tonnes of oil in 2013, while the Russian side insisted on delivering 18.5 million tonnes of oil (by pipeline and by rail). The Russian side also insists on returning 2.1 million tonnes of oil products refined from the Russian oil, but Belarus notes that fuel supplies in the western direction are more profitable.

In late December 2012, the countries agreed on shipping 5.75 million tonnes of oil in Q1 2013.

The talks were complicated due to the solvent conflict with Minsk. Belarus produced solvents and thinners from Russian naphtha at the country's refineries in 2012. The crude oil was delivered to the country on a duty-free basis under the regulations of the Customs Union. The finished products were given another HS code that allowed exporting them without paying export duties to Russia. Russia estimates its losses at $1.5-2billion.

Dvorkovich said during his visit to Belarus in February that Russia and Belarus were discussing the MAZ/KAMAZ merger, Grodno Azot's possible integration with a Russian company, setting up joint ventures on the basis of Gomselmash plant and a Belarusian microelectronics company.