The European Union filed a protest

A year after Russia joined the WTO, it faces its first trial within this organization. The European Union is dissatisfied with the current recycling tax on cars in Russia and demands equal rights for foreign and domestic manufacturers.

Photo: Sergey Kiselev, Kommersant / buy photo

On Tuesday, the European Union filed a protest with the WTO regarding the current recycling tax on foreign-made cars in Russia. Russia introduced this fee in September 2012. It applies to all vehicles, both cars and trucks, manufactured domestically and abroad. But there are exceptions to the general rule: certain categories of persons who have benefits for importing cars, as well as manufacturers who have accepted voluntary obligations to dispose of their cars, are exempt from paying the fee. All major Russian manufacturers fell into the last category. The European Union assessed this state of affairs as a violation of competition, contrary to WTO norms.

To remove the claims of Europeans, the government has prepared amendments to the law “On Production and Consumption Waste”, which extend the recycling fee to domestic producers. But by July 1, as stipulated in the agreements with the EU, the bill was not adopted. The State Duma went on summer vacation without even having time to submit the bill for consideration in the relevant committee.

“The problem is not the recycling fee itself, but the fact that Russian automakers do not pay it, which creates serious competitive preferences for them. Russian and European manufacturers must play by common rules, as required by WTO standards,” ITAR-TASS quotes a source in European institutions.

The Russian Ministry of Economy reported that they “expected such a development of events.” “So, according to the EU decision, we will now act within the framework of the formal dispute resolution procedure at the WTO,” noted Ekaterina Mayorova, deputy head of the ministry’s trade negotiations department.

However, WTO rules allow the parties to resolve the dispute out of court within 60 days. Thus, Russian deputies may have time to adopt amendments to the legislation before the start of the trial.

Why did the Russian Federation not manage to equalize the terms of payment of the recycling fee for domestic car factories and importers?

The bill, which will oblige domestic automakers to pay a recycling fee on cars on an equal basis with importers, will be considered by the State Duma in the first reading only in October. The State Duma Committee on Natural Resources, Environmental Management and Ecology included it in the “approximate program of legislative work during the autumn session.” Read more

Natalya Ilyina

Cars brought Russia to the WTO court