Government Expands Criteria for Assessing Compliance by Free Economic Zone Residents

The Council of Ministers has, by Resolution No. 383 of July 29, approved new criteria for assessing whether residents of Belarus’ free economic zones (FEZs) comply with the conditions of their operations. The document was published today on the National Legal Internet Portal and enters into force upon publication.

Compliance with agreements governing operations in FEZs will now be assessed according to seven criteria:

1. investment in fixed capital in the amount and within the time frame specified in the business plan;
2. commencement of production activities within the time frame specified in the business plan;
3. employment of workers in newly created jobs in the number specified in the business plan;
4. implementation of plans to ensure that manufactured industrial products meet the requirements for classification as products made in Belarus, and obtaining the relevant supporting documents in accordance with the law;
5. ensuring that employees’ nominal accrued average monthly wages are no lower than the target wage indicator for the relevant region;
6. absence, as of January 1 of the year following the reporting year, of arrears on taxes, fees (duties) and other mandatory payments to the national and local budgets, as well as arrears on mandatory social insurance contributions to the Social Protection Fund;
7. fulfilment of obligations to make contributions to the FEZ development fund in accordance with the agreements.

Previously, only three criteria were used: investment in fixed capital, the launch of production and the number of employees hired for newly created jobs.

FEZ administrations have been instructed to incorporate the new criteria into agreements with residents. Compliance assessments are to be carried out annually by March 1.

The government has also defined indicators of inadequate compliance. These include fulfilling less than 80% of the requirements under criteria one to three, or failing to meet two or more of the requirements under criteria four to seven.

After completing the assessment, FEZ administrations will notify residents of any inadequate compliance with the terms of their agreements. Residents will then have 30 days to provide explanations for the reasons.