Russian President Vladimir Putin signed a bill ratifying a temporary agreement on the formation of a free trade zone between the Eurasian Economic Union and Iran on Wednesday.

The bill, published on the official Internet portal of information department, was ratified by the State Duma and the Federation Council (two houses of the Russian Parliament) on November 15 and 23, respectively, Russian news agency TASS reported.

"[The deal] to ratify the interim agreement on the formation of a free trade zone between the Eurasian Economic Union and its member states, as well as the Islamic Republic of Iran signed in Astana on May 17, 2018," the document said.

The deal sets the main rules of trade between the EEU and Iran most closely to those of the World Trade Organization, which Iran has not yet joined.

It creates conditions for boosting the development of trade and economic cooperation between countries through the liberalization of trade rules. The document defines the obligations of the parties, providing for the reduction or elimination of tariffs and non-tariff barriers in relation to certain goods. The agreement also establishes preferential rates of customs duties that apply to such goods.

It is agreed that the party importer recognizes sanitary and phytosanitary measures of the exporting country as equivalent, even if these measures differ from its own or other measures used by third countries.

The deal establishes the rules for determining the origin of goods that are to be included in the preferential tariff regime.

The agreement enters into force 60 days from the date of receipt of the last written notice of completion by the member states of EAEU and Iran of the internal procedures necessary for its implementation.

The deal is expected to substantially increase trade between Iran and EEU.

Iran’s non-oil commercial exchanges with the five member states of the Eurasian Economic Union totaled 1.94 million tons worth $1.13 billion during the first seven months of the current Iranian year (March 21-Oct. 22), to register a 36.98% and 52.05% growth in tonnage and value respectively compared with last year’s corresponding period, latest data released by the Islamic Republic of Iran Customs Administration show.

Iran’s free trade with EEU members is especially important, as the US has reinstated sanctions against the Islamic Republic. By putting into effect the agreement, the two sides are hoping to make up for the loss of global markets as a result of economic restrictions imposed on Iran and Russia, the leading member of EEU, by the United States.

Iran’s exports to the EEU during the seven months under IRICA's review stood at 871,604 tons worth $325.05 million, indicating a 38.62% rise in tonnage and 16.93% in value year-on-year increase.

Imports amounted to 1.07 million tons worth $807.03 million, up 35.69% and 72.98% in tonnage and value respectively YOY.

Iran’s total commercial exchanges with Russia were the highest in terms of dollar value among the five member states of the bloc at 1.14 million tons worth $862.1 million, up by 20.98% in tonnage and 63.37% in value YOY.

Iran exported 238,395 tons of non-oil commodities worth $138.34 million to Russia, down 1.97% in tonnage and up 17.7% in value YOY, while it imported 906,363 tons of Russian goods worth $723.76 million in return, up 35.69% and 72.98% in tonnage and value respectively YOY.

The Russian Ministry of Industry and Trade has said that a full-fledged agreement will be concluded by early 2022.

According to the ministry, the interim agreement covers 50% of the trade between the parties and will come into force early 2019.