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Russia may initiate WTO inquiry into unlawful US sanctions

July 25, 2014, 3:26 UTC+3 GENEVA

"The U.S. actions can provoke a chain of unfortunate events which will ultimately undermine trust in the multilateral trade system," Russia’s representative to WTO said

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© EPA PHOTO KEYSTONE/Laurent Gillieron

GENEVA, July 25 /ITAR-TASS/. The U.S. sanctions against Russian companies and financial institutions imposed over Ukraine violate WTO rules and may force Russia to initiate an investigation, Russia’s representative to the World Trade Organisation said on Thursday.

“We regard the recent U.S. sanctions against Russian companies as a challenge to our trade and economic interests which are guaranteed by the WTO rules,” Gennady Ovechko said at the WTO General Council meeting.

“It looks as if we are being forced to demand the protection of our legitimate interests using WTO mechanisms,” he said.

Ovechko said that “the U.S. actions can provoke a chain of unfortunate events which will ultimately undermine trust in the multilateral trade system”.

He expressed concern about the fact that other WTO members had also imposed sanctions.

Argentina, Bolivia, Venezuela, Zimbabwe, Cuba, Nicaragua, and Ecuador supported Russia’s statement.

On July 16, the U.S. government announced further sanctions against Russian officials and companies in Russia and Ukraine, including State Duma (lower house of the Russian parliament) Deputy Speaker Sergei Neverov, Minister for Crimean Affairs Oleg Savelyev, presidential aide Igor Shchegolev, Federal Security Service Colonel-General Sergei Beseda, and one of the leaders of the self-proclaimed Donetsk People’s Republic, Alexander Borodai.

The sanctions list also includes the Donetsk and Lugansk People’s Republics, Russia’s Vnesheconombank, Gazprombank, Rosneft, Bazalt, Feodosia Oil Company, Radio-Electronic Technologies Concern, Sozvezdie Concern, Almaz-Antey machine-building company, Kalashnikov Concern, KBP Instrument Design Bureau, Uralvagonzavod, and Novatek.

On the same day, the European Union widened criteria for applying sanctions against Russian companies and included another 15 officials and 18 companies in the sanctions list to be announced by the end of Friday, July 25.

There are 72 individuals in the current sanctions list, including Russian politicians and government officials, and militia leaders in the Donetsk and Lugansk People’s Republics. They have been forbidden to enter the EU until November and their assets, if any, are to be frozen in European banks.

The list also includes two Crimean companies, which the EU said were illegally seized by Russia. If they place assets in Europe, they can also be frozen.

Russian Minister of Economic Development Alexei Ulyukayev said earlier that Moscow was planning to raise the question of U.S. sanctions in the WTO.

“We will certainly raise this issue in the WTO, in its General Council, most likely using dispute resolution procedures. We have so far refrained from such steps in hope that our American partners would assume a more balanced position. Unfortunately, our American colleagues failed to demonstrate that, leaving us no choice,” Ulyukayev said.

The minister said he was not prepared to discuss how serious the consequences of the American sanctions will be for the Russian economy. “We need to analyse this very carefully. The negative effect may not be so big. But what is important is that our American partners have overstepped a certain line and this cannot be left unnoticed. It is very important to form a qualitative climate for investors so that they could work for the benefit of the Russian economy even under sanctions,” Ulyukayev said.

Russia joined the WTO in August 2012 after 19 years of negotiations. Less than a year after that, in July 2013, the European Union contested Russia’s car recycling fee; in April it filed a complaint with the WTO questioning the legality of the Russian ban on the import of pork; in late May, it contested anti-dumping duties for light commercial vehicles.

Russia, for its part, filed a claim against the European Union’s energy adjustments in December 2013 and against the EU Third Energy Package in April.

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