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WTO Sets Up Panel On Russia's Vehicle Recycling Fee

by Tatiana Smolenska, Tax-News.com, Moscow

02 December 2013


The World Trade Organization's (WTO) Dispute Settlement Body (DSB) established a panel on November 25, 2013 to mediate in the dispute between the European Union (EU) and Russia over the latter's recycling fee on motor vehicles.

The EU requested the establishment of the DSB panel on October 11, 2013, alleging that Russia's recycling fee creates an additional burden for EU exports and offsets the reduction in import tariffs Russia accepted when joining the WTO.

The EU also argues that the structure of the recycling fee has a detrimental impact on imported vehicles as compared with relevant domestic vehicles, because the fee is progressive and differentiates between "new vehicles" and "vehicles produced more than 3 years ago."

The DSB deferred the establishment of the panel at its meeting on October 22 when Russia objected to it.

The vehicle recycling fee was introduced on September 01, 2012, only days after Russia's WTO accession. It is levied on imported cars, trucks, buses and other motor vehicles. For cars, it ranges from about EUR420 to EUR2,700 for a new vehicle and from EUR2,600 to EUR17,200 for a vehicle older than three years. For some vehicles, such as certain mining trucks, the fee is as high as EUR147,700. However, vehicles from Russia and its Customs Union partners Kazakhstan and Belarus are exempt from the tax, under certain conditions.

Russia said that President Vladimir Putin has signed legislation eliminating and modifying sections of the existing utilization fee regime which the EU had referred to in its request for a panel, according to a November 25 WTO press release.

TAGS: Russia | tax | mining | tariffs | World Trade Organisation (WTO) | legislation | trade disputes | trade | European Union (EU) | Europe

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