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European Union; Russian: EU Challenges Russia Before WTO

(July 12, 2013) On July 9, 2013, the European Union (EU) filed a request with the World Trade Organization (WTO) for consultations with Russia on the Russian government’s imposition of a “recycling fee” on imported vehicles. (Press Release, European Commission, <?Russia on the Russian government's imposition of a "recycling fee" on imported vehicles. (Press Release, European Commission, The EU Brings Its First WTO Case Against Russia (July 1, 2013), EUROPA.)

Russia began imposing this fee soon after it joined the WTO on August 22, 2012. The fee is applied to all motor vehicles (cars, trucks, and buses) imported from the EU. However, vehicles manufactured in Russia, as well as those imported from Kazakhstan and Belarus, which form a customs union with Russia, are exempted from the levy. (Id.)

The recycling fee ranges from €420-2,700 (about US$547-$3,519) for a new vehicle and from €2,600 to €17,200 for vehicles older than three years. The fee amounts to as much as €147,700 for certain mining trucks. The EU argues that the fee has a negative effect on EU vehicle imports to Russia, which are valued at close to €10 billion annually. Russia estimates that the fee represents €1.3 billion annually in additional state revenues. (Id.)

The EU argues that the fee is counter to the WTO’s fundamental rule prohibiting discrimination against and among imports. The EU Trade Commissioner, Karel De Gucht, stated that the fee “is severely hampering trade in a sector which is key for the European economy. We expect Russia to engage in WTO consultations with us to find a solution to this problem quickly.” (Id.)

A request for consultations under the WTO dispute settlement procedure is the first step towards initiating the dispute process. At this stage, the two parties will have an opportunity to discuss the issue and find an amicable solution without resorting to litigation before the WTO. (Id.)