International technical assistance: particulars of registration and use

General provisions

Issues of obtaining and use of international technical assistance are currently regulated by Edict of the President of RB No. 460 dated October 22, 2003 On International Technical Assistance Rendered to the Republic of Belarus (hereinafter Edict No. 460),  Ordinance of the Council of Ministers No. 1522 dated November 21, 2003 On Certain Measures for Implementation of Edict of the President of RB No. 460 dated October 22, 2003 (hereinafter Ordinance No. 1522),  and Ordinance of the Ministry of Economy of RB No. 246 dated December 19, 2003 On Approval of the Regulations for Procedure of International Technical Assistance Projects (Programs) Registration in the Republic of Belarus, and Control of their Implementation (hereinafter Ordinance No. 246).

Today all aid received from abroad can be broken into the following 2 categories:

  • international technical assistance;
  • foreign gratuitous aid.

Rating of the received aid to the first or second category is of practical importance: it means registration in the Ministry of Economy (international technical assistance) or in the Department for Humanitarian Activity (foreign gratuitous aid). Moreover, sufficient tax remissions and customs preferences are offered for implementation of international technical assistance programs, while no preferences are established for implementation of foreign gratuitous aid programs, and may be rendered by the Administrative Department of the President individually upon agreement with the President of RB.

Edict No. 460 has established,  that international technical assistance (hereinafter ITA) is one of the types of assistance rendered to the Republic of Belarus on charitable basis by ITA donors with the aim to render support in the fields of social and economic transformation, preservation of the environment, elimination of the consequences of calamity at Chernobyl Nuclear Power Plant, infrastructure development through carrying out investigation, training, exchange of specialists, post-graduates and students, experience sharing, transfer of technologies and funds, supply of equipment and other goods (property) under approved projects (programs) of international technical assistance.

Types of international technical assistance

International technical assistance may be formalized as any of the following 2 kinds of documents:

  • the National Program of International Technical Assistance (hereinafter the National Program);
  • ITA project (program).

The National Program is a document developed by the Ministry of Economy and approved by the Council of Ministers. Such document contains programs proposed by the Republican public administration bodies that comply with either the social and economic development program of RB or with other governmental programs. Today the National Program of International Technical Assistance for 2001-2005 is in force (approved by Ordinance of the Council of Ministers No. 51 dated January 17, 2001).

All other projects and programs not included into the National Program may also receive the ITA status. But this will be done not on the centralized, but on the individual basis. Accordingly, responsibility for elaboration of such program shall be vested not in the Ministry of Economy but in the recipient of such assistance. Any project (program ) elaborated by such recipient shall be also subject to approval by the Council of Ministers.

Approval of programs of international technical assistance by the Council of Ministers

The main body that coordinates all issues related to ITA implementation is the Commission on International Technical Cooperation under the Council of Ministers of RB (hereinafter the Commission). The Commission consists of 9 members (representatives of the Ministry of Economy, Ministry of Foreign Affairs, Ministry of Taxes and Charges, GTC, Ministry of Justice, Ministry of Finances, and State Machinery); it is not a legal entity and uses mechanisms of the Ministry of Economy for its activity.

The Commission in particular has been vested with authorities to table to the Council of Ministers motions to approve the National Program and ITA projects (programs). In this connection, the respective proposals shall be submitted to the Commission. The National Program shall be elaborated and submitted to the Commission by the Ministry of Economy; all other ITA projects (programs) shall be elaborated and submitted to the Commission by its respective recipients (through the authorized governmental bodies).

The procedure of drawing up documents for submission of ITA project (program) to the Commission is labour-intensive enough. Implementation of such project may be initiated both by the donor and the recipient of such ITA,  but in any case the donor shall confirm its intention to allocate funds for financing appropriate projects (programs).

Moreover, ITA recipient shall get a decision on such project (program) conformity with the national interests of the Republic of Belarus. The question who is entitled to issue such decisions shall be decided depending on the initiator of implementation of each particular ITA project (program). Should any international organization be an initiator, such decision shall be issued by one of the Republican public administration bodies or any governmental institution which is subordinate to the government and has been identified as a directing agency involved in cooperation with international organizations. Should the project be initiated with any foreign states or their administrative-territorial units, such decision may be issued only by the Ministry of Foreign Affairs.

Though this is not expressly provided for with the legislation,  we can suppose that the recipient shall also prove that ITAs purpose corresponds to one of the purposes listed in Edict No. 460 (assistance which the aim is to render support in the fields of social and economic transformation, preservation of the environment, elimination of the consequences of calamity at Chernobyl Nuclear Power Plant, infrastructure development through carrying out investigation, training, exchange of specialists, post-graduates and students, experience sharing, transfer of technologies and funds, supply of equipment and other goods). If assistance is rendered with any other purpose, it shall not be deemed international technical assistance.

After the donors have confirmed their intention to allocate funds for financing ITA projects programs), and in case of compliance of such projects (programs) with the national interests of RB,  the recipients proceed to the next stage: preparation of the proper ITA project (program) and submission to the Commission together with the respective resolution of the Council of Ministers on its approval.

But only those bodies that are vested with powers to elaborate norms (standards) may apply to the Commission directly. Those ITA recipients that are the state-owned legal entities of RB shall submit their proposals to the higher Republican public administration bodies and other state-owned organizations subordinate to the government. The non-governmental legal entities and citizens of the Republic of Belarus shall apply to the regional executive committees and Minsk City Executive Committee at the place of their state registration. Only such above mentioned bodies are entitled to prepare the Council of Ministers draft resolution on this issue and submit it (in accordance with established procedure) together with such ITA project (program) to the Commission for consideration.

The Commission meets as required but at least once a month. Ordinance No. 1522 provides for opportunity to invite ITA recipients and donors to be present at the Commission meeting. The Commission considers ITA projects (programs) and presents them to the Council of Ministers for approval. The period of approval shall not exceed 30 days from the date of the Commission meeting. Denial should be justified and delivered by the Ministry of Economy to ITA recipient in writing within a week from the date when such decision has been made by the Commission.

Ordinance No. 1522 provides for 3 cases when the Commission is entitled to deny the project:

  • if such ITA project (program) does not comply with the national interests of the Republic of Belarus;
  • should it be impossible to confirm obligations of national co-financing of such ITA project (program) (if such national co-financing has been planned);
  • availability of provisions or obligations in the project that do not correspond to the Belarusian legislation; or are not in line with each other; or are mutually exclusive.

The mechanism of appeal of such decisions of the Commission has not yet been established in the legal standard acts.

Registration of international assistance programs in the Ministry of Economy

Approval of ITA project (program) by the Council of Ministers does not mean granting any tax remissions and customs preferences. Registration of such ITA project (program) in the Ministry of Economy shall be the next stage on the path to such remissions and privileges.

In order to register  ITA project (program) in the Ministry of Economy, the recipient shall submit:

  • Application (application form was established with the Ordinance No. 246);
  • original project (program) or certified copy thereof. Should such original be executed in a foreign language, its translation certified with the recipients signature shall be also submitted; 
  • the Ministry of Economy is entitled to request the recipient for additional written information and documentation related to approval or permission of such project (program) or its co-financing; as well as copies of the recipients constituent document and registration certificate, certified by the recipient.

The time for consideration of such documents by the Ministry of Economy shall be 5 days from the date of acceptance of documents. Should any additional information or documentation of the recipient be needed, the Ministry of Economy is entitled to extend the time for application consideration. Ordinance No. 246 does not specify the extended term to which the Ministry of Economy shall be entitled.

ITA projects (programs) shall be registered for the period of their implementation (such period is indicated by the Ministry of Economy on the first sheet of the project). Should the project (program) fail to specify any period of implementation, then the period indicated in the recipients application shall be assumed as a basis.

Registration shall be effected by the Office for cooperation with international organizations and coordination of technical assistance under the Department of Foreign Economic Relations of the Ministry of Economy, through filing in the Unified Register (Database of projects (programs)) and issue to the recipient an original or certified copy of such project (program),  with its first sheet stamped and its registration number indicated. In addition, each sheet of such project (program) shall be stamped with the stamp of this Department of the Ministry of Economy.

Ordinance No. 246 provides for entering changes in the program that has already been approved and registered. Should such changes or additions be entered in the project (program) in connection with change of or addition to the list of recipients, financing, goals, tasks and events of such project (program), the recipient, within ten days from the date of official formalization of such change or addition, shall apply to the Ministry of Economy for its registration.

Granting tax remissions and customs preferences

Registration of any project (program) as ITA is a basis for granting tax remission and customs preferences. According to Edict No. 460 the following shall not be deemed objects of taxation if received within the international technical assistance:

  • goods delivered to the customs territory of the Republic of Belarus as international technical assistance VAT, excise concession, and customs preferences;
  • funds and other property received as ITA income tax concession;
  • turnover from sales of goods (work, services) purchased (executed, rendered) in the territory of the Republic of Belarus with a view to carry our ITA local taxes and charges, VAT, charges and fees levied on receipts from sales of goods (work, services) and payable to the state special-purpose budget and off-budget funds;
  • property acquired at the expense of or received in the form of ITA for direct rendering of such assistance real estate tax for the period of its use for the stated purpose;
  • income received by natural persons income tax collected from natural persons.

The recipient shall undergo one more procedure in order to be granted such benefits: approval of the lists of goods (property), works, services rendered for implementation of ITA project (program). It is Commission that makes a decision, but all necessary documents shall be submitted to the Ministry of Economy. The following set of documents shall be submitted to the Ministry of Economy: 1) official application of an ITA recipient (in a voluntary form); 2) 4 copies of the list which shall include descriptions of goods (property, funds including), works and services (including units, quantity, and value), as well as names of ITA recipients. Such list shall be certified with ITA recipients signature and seal; 3) copies of documents on assigning a unified taxpayer number to ITA recipient; 4) originals and copies of property acceptance reports, contracts for funds reception, execution of work, rendering services within such project (program). Such documents shall only be submitted if goods (property) have been acquired, or funds have been transferred, or work has been executed, or services have been rendered by the time of submission. Ordinance No. 1522 provides for mandatory requirement to such submitted documents (contracts, reports, etc.): they shall contain reference to the project (program) registered in accordance with established procedure. All copies of the documents submitted to the Ministry of Economy shall be certified with ITA recipients signature and seal (or notarized if the ITA recipient is a natural person).

Within 10 days from the date of submission of all necessary documents expert analysis of the lists compliance with the goals and tasks of the project (program) shall be made. Such expert analysis shall be made by a workgroup which includes the representatives from the Ministry of Economy, Ministry of Foreign Affairs, Ministry of Taxes and Charges, GTC, Ministry of Justice, Ministry of Finances, and a representative of TACIS Program National Coordination Office in Belarus.

If the destination of goods (property, funds including), or work and services included into the lists, contradicts to the goals and tasks of ITA project (program),  the Ministry of Economy shall be entitled to demand from such ITA recipient for additional grounding of the list compliance with the goals and tasks of such project (program). In this connection the Ministry of Economy shall be entitled to extend the term of issue of the expert opinion until such additional document are submitted, and to put forward a proposal to reject the list approval. The Ministry of Economic shall get ready all materials necessary for the workgroup activity, and prepares the expert that which is subject to submission to the Commission together with the list. The Commission shall consider the list and the expert opinion at its regular sitting. The Commission shall be entitled to reject the list approval (and, consequently, granting benefits) in the following cases

  • incorrect making up  a list or availability of false data therein;
  • lack of registration of such ITA project (program);
  • availability of conflictive or mutually exclusive provisions, obligations in the contract;
  • failure to submit reports on ITA project (program) implementation within the time established by the legislation;
  • in case if the acceptance report, contract does not contain a reference to such ITA project (program).

Ordinance No. 1522 does not provide for a mechanism of appeal of the Commissions decision. The opportunity of repeated submission of document has been also unsettled. One may suppose, that the recipient is entitled to repeatedly apply for registration of the list after all drawbacks or inconsistencies are eliminated.

If the Commission decides to approve the list, the Ministry of Economy shall issue to ITA recipient an extract from the resolution of the Commission signed by its deputy chairman, and one copy of the list signed by the secretary of the Commission and sealed. Such list shall be kept by such ITA recipient. The remaining copies shall be delivered by the Ministry of Economy to the Ministry of taxes and Charges and GTC by on copy to each.

Only from this moment one may start speaking about actual granting of benefits within ITA project (program).

Validity of international treaties

Paragraph 1.6 of Edict No. 460 establishes, that if the norms on international treaties binding for the Republic of Belarus provide for the rules different from those mentioned in Edict no. 460, then the rules of such international treaties shall be applied. Ordinance No. 1522 provides for the mechanism of implementation of this norm:  according to paragraph 1.5 of this Ordinance the Ministry of Foreign Affairs shall ensure conformation of application of norms of such international treaties to which the Republic of Belarus is a party, should such international treaties provide for the rules different from those mentioned in Edict no. 460.

Accountability, responsibility and control

The ITA recipient shall submit to the Ministry of Economy the semi-annual statements (reports) on the course of implementation of ITA projects (programs) not later than by July 15 and January 15.  The form of such statement (report) was approved by Ordinance No. 246 and shall contain detailed information on all costs for the project (program) implementation, on achieved results after conduct of events within such project (program). The recipients are to submit similar statements (reports) to the Ministry of Economy within a month from the project completion date.

In accordance with paragraph 1.4 of Edict No. 460, control of special-purpose use of funds and other property within the ITA projects implementation shall be effected by CGC, Ministry of Taxes and Charges, GTC, and other governmental bodies. Under the other governmental bodies the National Bank and banking institutions may be meant, as they also carry out control of special-purpose use of foreign gratuitous aid  (though this was not directly provided for by the Decree of the President of RB No. 24 dated November 28, 2003 On Reception and Use of Foreign Gratuitous Aid).

Should the time limit for submission of statements (reports) on ITA projects (programs) implementation to the Ministry of Economy be repeatedly exceeded or should the authorized governmental bodies reveal ITA use not in accordance with its stated purpose,  the Ministry of Economy shall direct the appropriate information to KGK and put forward a proposal to declare registration of such project (program) invalid. In case the commission makes such decision,  the Ministry of Economy shall within five days direct an extract from the minutes f the sitting to KGK, Ministry of Taxes and Charges, GTK and the recipient.

According to paragraph 1.4 of Edict No. 460, should ITA be used not in compliance with the stated purpose, the benefits granted shall not be applicable to any funds (work, goods) received (executed, rendered) within such ITA, nor it shall be applicable to any other property. In this case all taxes, charges, fees and duties shall be paid (collected) together with charging penalty in accordance with the legislation.

Sergey ZIKRATSKY