(October 31, 2014)

On October 31, 2014 the European Commission issued a press release announcing that on October 31, 2014 the EU requested consultations with Russia in respect of import duties for paper products, refrigerators and palm oil. According to the press release the EU takes this first step in the dispute settlement procedure in response to the violation by Russia of its obligations under the World Trade Organisation (WTO).

Upon joining the WTO, Russia committed to keep its import duties below the limits expressed in the accession documents. According to the EU however, it has continued taxing a number of products across various sectors more heavily than agreed. The press release states that is still the case today for certain products of interest for the EU.

 

The press release continues by stating that Russia diverges from what was decided at the time it was joining the WTO in two ways: either it applies a higher duty rate, e. g. 15% instead of 5%, or it fixes a minimum amount that needs to be paid even if not justified by the agreed duty rate expressed in a percentage of the product value.

 

According to the press release those higher duties have a clear negative impact on European exports of paper products, refrigerators and palm oil that are worth approximately €600 million a year. Furthermore according to the European Commission the non-respect of tariff commitments raises also a systemic concern as it constitutes a violation of one of the key WTO principles.

 

The European Commission continues by stating that it has raised this issue with Russia both in bilateral talks and in WTO committees but to no avail. According to the European Commission therefore (to ensure respect of WTO rules) the EU wants now to engage with the Russian Government in formal consultations. If the consultations are not successful, after 60 days the EU can ask the WTO to establish a panel that will rule on the case.

 

For further information click here to be forwarded to the press release as published on the website of the European Commission, which will open in a new window.

 

 

Follow International Tax Plaza on Twitter (@IntTaxPlaza).

 

 

 

Copyright – internationaltaxplaza.info

 

 

 

Submit to FacebookSubmit to TwitterSubmit to LinkedIn
INTERESTING ARTICLES