2023. vol. 18. No. 2

The European Union (EU) is getting ready for the implementation of СBAM — the world’s first carbon border adjustmentmechanism. This article explores the correlation between intra-European and international facets of СBAM as two sides ofthe same coin: while appending the EU Emissions Trading Scheme, it is equally an instrument of foreign trade, immediatelytouching upon EU relations with trade partners and specialized international organizations. Once such correlation is takeninto account, it becomes evident why the design of the European carbon levy remains capable of improvement as far as fightingclimate change goes.The concept of multilevel governance assists this research as the basis for analyzing СBAM. The institutionalist approachclarifies the specifics of the European carbon border adjustment mechanism. They are important in order to scopeout its true perspective. In particular, the MLG approach helps to expose the blurred lines between market regulation andtax policy in European governance practice.The ways, if any, that СBAM differs from a carbon tax and, at the same time, is similar to a carbon tariff are considered.A reappraisal made in the article of this hybrid measure makes it possible to draw a conclusion that, as envisioned bythe European Commission, it is meant to ensure more favourable conditions for investments in cost-intensive, low-carbontechnologies while suppressing competition from cheaper, high-carbon imports. At the same time, so as to avoid unleashingtrade wars, it is important for the Commission to assure the maximum possible conformity of СBAM to the World TradeOrganization’s (WTO) legal requirements. Compatibility with WTO law would enhance the ecological legitimacy of theregulatory mechanism in question. It would make sure that international partners would not regard СBAM as a form ofgreen protectionism.Further, the subtle aspects of preferences in terms of СBAM design are discussed, as held by the Commission, EUmember states, the European Parliament, and the representatives of European carbon-intensive industries. Particular attentionis paid to the discussion in the EU on the issue of connecting export rebates for inside producers to CBAM.

In the face of climate and environmental problems caused by carbon emissions, China is taking positive actions, such aspromoting the achievement of the emission peak of traditional energy sources, accelerating the optimization of industrial andenergy structures, promoting and improving the construction of the national carbon trading market, increasing investmentand scientific research work to develop new energy sources, and several other actions. The administrative approach plays animportant role in the development of Chinaʼs low-carbon economy. The carbon trading system also greatly promotes energyconservation and emission reduction, contributes to attracting investment in low-carbon technology and transforming theenergy structure and is becoming an important policy guarantee for Chinaʼs carbon emission reduction. However, at thesame time, Chinaʼs carbon trading market faces many practical challenges. For China, the task of reducing carbon emissionsthrough carbon trading alone is unrealistic. Chinaʼs current actions on carbon taxation are not broad enough to regulateemission reductions. With the implementation of carbon trading, there is a need to establish a carbon tax as a policy optionto further strengthen the regulation of emission reduction. The introduction of a carbon tax should consider the relationshipbetween economic and social development and carbon reduction and coordinate the relationship between the carbon tax andcarbon trading system on various aspects, including the field and object of taxation, tax rates, use of tax revenue and therelationship between the authorities regulating the two policies, to leverage their complementary roles.

This article was submitted 27.01.2023

With the Western Balkansʼ European integration completely stalled and its future uncertain, a new regional initiative waslaunched by Albania, Serbia and North Macedonia. Initially called Mini Schengen, it grew into the Open Balkan with anambitious goal to form a single market with unhindered movement of people, goods, services, and capital. Despite activeinvolvement of state leaders, the initiative lacks transparency, legal frameworks, and concrete plans to fulfill the strategicvision. It is also difficult to expect it to grow into a classic international organization given the failure to form an implementationbody. In addition, the U.S. only conditionally supports the Open Balkan by demanding the inclusion of all six WesternBalkan actors (which in practice proves to be impossible), while the European Union (EU) only cautiously welcomes activitiesleading to further regional integration, given that it initiated the competing Berlin process in 2014.This article examines the internal and external sustainability of the Open Balkan initiative, its prerequisites, andits projects. It also argues that without support from the U.S. and the EU, an authentic regional integration in the WesternBalkans is hardly feasible. Inter alia, the three countries have modest institutional capacities and incomparably small powerpotential.

Increasingly expanding international requirements in the field of combating money laundering and terrorist financing(AML/CFT) force the public and financial sector to seek a balance between the rising costs of their implementation andsanctions threats for non-compliance. A number of scientific publications describe regional AML/CFT cooperation in theEuropean Union (EU) as an example of such a balance. Some EU countries coordinate their actions within the frameworkof the Financial Action Tasks Force on Money Laundering (FATF), which is the methodological centre of the global antimoneylaundering movement. Russia is a member of the FATF and its two regional groups: Moneyval, organized by theCouncil of Europe, and the Eurasian Group (EAG) initiated by Russia itself, which unites Russiaʼs neighbouring, mainlyAsian, countries. This study covers the results of assessments of compliance by EU and EAG countries with FATF requirementsin order to study approaches to AML/CFT regional cooperation and to identify problems arising in this process andprospects for international cooperation. The methods of comparative and graphical analysis were used. The authors showthat deep regional integration of lawmaking is not in itself a fundamental factor in achieving equally high rates of compliancewith FATF requirements. Indifference to matters of monitoring compliance with approved regional anti-money launderingstandards allows particular EU countries to act in the national interest, contrary to the 40 FATF recommendations and thegoals of the global AML/CFT regime. On the contrary, the EAG countries demonstrate steady progress in the introductionof legislation and practical implementation of FATF requirements, which indicates their collective awareness of the benefitsfrom financial information transparency and the possibility of exchanging this information at the international level.

This article was submitted on 05.02.2023