The European Union (EU) has filed a protest with the World Trade Organisation (WTO) over Russia’s vehicle recycling fees stating that they discriminate against imports. It is the first case the EU has filed against Russia at the WTO.
The tax, or ‘Utilisation Fee’, has drawn complaints from trade representatives from a number of states included in the World Trade Organisation. Under the system, which came into effect in September last year, each foreign import is subject to an up-front fee equivalent to 5% of the sale price of the vehicle to cover the cost of recycling.
The charge effectively takes import charges back up to the 30% imposed before Russia’s accession to the WTO, when the government agreed to drop import fees on vehicles to 25%, with a further reduction to 15% scheduled on full compliance by 2018.
According to the EU, the measures adversely affect exports of motor vehicles from the European Union to Russia. In contrast, domestic vehicles are exempted from that payment under certain conditions. An exemption is also available to vehicles imported from Belarus and Kazakhstan, which lie within Russia’s Customs Union. The EU said that vehicles imported into Russia from the EU are treated less favourably than domestic vehicles, or vehicles imported from Belarus and Kazakhstan.
The EU claims that the structure of the “recycling fee” appears to afford protection to domestic production.
For more on developments in Russia's complex customs and duty system, read our conference report from Automotive Logistics Russia.