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EU poised to start WTO action against Russia over 'discriminating' recycling fee on foreign cars

July 09, 2013, 12:45 UTC+3
"The problem is not the recycling fee itself, but the fact that the Russian car makers don’t pay it", claims the diplomatic source
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Photo ITAR-TASS

Photo ITAR-TASS

BRUSSELS, July 9 (Itar-Tass) - The European Union is poised to start a WTO action against Russia over "discriminating" recycling fee on foreign cars, a European diplomatic source said on the sidelines of a session of the Economic and Financial Affairs Council.

He has confirmed information about the impending lawsuit on this issue in WTO court, but did not give the date of its filing. He has also stressed that the EU does not require the abolition of the recycling fee for foreign automakers.

“The problem is not the recycling fee itself, but the fact that the Russian car makers don’t pay it and that gives them serious competitive preferences. Russian and European manufacturers have to play by common rules, as required by WTO rules,” said the source.

Earlier today, a European diplomatic source said that the European Union "soon" will file a lawsuit in court against Russia in the WTO, with the continuation of the action in the RF utilization fee on imported cars.

“We gave our Russian partners time to balance these discriminatory trade rules before 1 July. Now the case will be passed for investigation to WTO. Russia is a full member of this organization and must play by common rules,” said the diplomat.

The representative of the European Commission today did not comment on the possible timing of the start of the proceedings, however, he has confirmed that the issue of “discriminatory nature of the recycling fee from our Russian partners is a serious concern” in Brussels.

The recycling fee was introduced in September 2012 and applies to importers of all types of vehicles, both new and used. For passenger cars the base rate is 20 thousand rubles, for cargo vehicles - 150 thousand, which is adjusted depending on the engine capacity and engine model year.

According to European experts, the amount of preferences received by the Russian car industry as a result of this measure exceeds 3 billion euros per year.

The Russian government has already introduced a bill to extend utilization fee on domestic vehicles in accordance with the rules of the WTO, but it hasn’t been adopted yet.

In the EU, there are rumors about the imminent appeal to WTO in order to activate this process. In case such proceedings start and the claims from Europe are recognized as reasonable, then Russia can expect penalties.

 

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