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Russia agrees its car recycling fees should be balanced

July 09, 2013, 21:21 UTC+3

According то Russian Ambassador to the European Union, it is quite possible to settle the issue in an amicable way

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BRUSSELS, July 9 (Itar-Tass) - Russia is generally ready to comply with the European Union’s requirements and square recycling fees on Russian and imported cars, but it will need time to actually do this, Russian Ambassador to the European Union Vladimir Chizhov told Itar-Tass on Tuesday, commenting on the European Union’s suit against Russia to the World Trade Organization (WTO).

According to Chizhov, it is quite possible to settle the issue in an amicable way, i.e. through talks. “Such a possibility does exist and I can assure you that Russia will take all efforts toward reaching amicable settlement with the European Union at the World Trade Organization in the dispute over recycling fee on imported cars, without letting the matter come to sanction,” he said.

“The subject of car recycling fees has been discussed for quite a long time. The European Union’s key claim is that Russia has different fees for manufacturers inside Russia, among which are European, Japanese and other companies who have assembly lines in Russia, and importers, and the fee for importers is higher. The European Union maintains it runs counter to WTO norms,” Chizhov noted. “Europe’s concern is over the difference in fiees, not on their absolute rates.”

“Having studied this issue, the Russian side agreed that the situation should be balanced. But the mechanism of recycling fees and their rates are fixed in Russian laws. Such amendments cannot be done overnight. They were drafted, endorsed by the government and submitted to the State Duma lower parliament house. Regrettably, the State Duma did not have enough time to consider them in full volume by the summer break. And it prompted the European Union to appeal to the World Trade Organization,” he noted.

The Russian State Duma will be on the summer vacations till late September and the “interference of the executive branch into the sphere of competences of the legislative branch would run counter to the Russian constitution,” the Russian diplomat said. “T WTO rules give 60 days to reach an agreement through consultations, plus ten days to begin talks. Let us hope we will be able to do that.”

“We are sorry that our European Union partner have opted for a mechanism of dispute settlement at the World Trade Organization and ignored the considerations of the Russian side, although we informed them about these considerations more than once. I personally did it as well. Our principled position is to use all the possibilities for amicable settlement of this issue or any other differences that might arise,” Chizhov went on to say. “By the way, our list of claims to the European Union is no shorter than theirs to us. I shall mention only one - the Third Energy Package. But we are not bringing these issues to the World Trade Organization, although we have the right to do that.”

Notably, European sources told Itar-Tass that partners in the European Union are fully aware of the difficulties Russia is facing in terms of modifying its system of recycling fees. But they have opted to bring this issue to the World Trade Organization because “the issue of fees discriminatory for European exporters has not been solved after over the past year.” According to the source, the prospect of facing a WTO litigation might spur Russian lawmakers.

Commenting on this thesis, the Russian diplomat noted that “spurring lawmakers in a senseless thing, both in Russia and in the European Union.”

According to Chizhov, the Russian side at consultations “is likely to be represented by the ministry of economic development and the Russian permanent representation in Geneva, since so far we have no representative office at the World Trade Organization.”

According to information available to Itar-Tass, the European Union will be represented by the European Commission and Karel De Gucht, the European Union’s Commissioner for Trade, will be in charge.

Russia imposed a car recycling fee in September 2012. It is applicable to importers of all types of motor vehicles, both new and used. The basic fee rate for motor cars is 20,000, and 150,000 - for trucks. The ultimate rate depends on the engine capacity and the year of production.

According to European experts, the sum of preferences to Russian can manufacturers exceeds three billion euro a year. According to the European Commission, the recycling fee has actually cancelled the annulment of customs duties on foreign-made cars Russia had to do seeking a WTO membership. These recycling fees, they claim, cost European manufacturers at least 1.3 billion euro a year.


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