Russia’s accession to the WTO – the first conclusions one year later

Selection_006When on 22 August 2012 Russia became the 156th member state of the World
Trade Organization, it was the end of long lasting talks and the beginning of high expectations. Now, one year later, we are drawing the first conclusions.

Entering the WTO, Russia agreed to adhere to the obligations under the signed protocol which foresees among other provisions that the import tariff rates should not exceed the rates provided for by the WTO. The requirements regarding the regulation of the import tariff imply a partial decrease or even a complete cancellation
of certain tariff lines. During the talks between the WTO and Russia, the decrease in revenue for the Russian Federation was one of the hottest topics. The complexity
of this question is also due to the fact that the consequences will be felt throughout the Customs Union, whereas Belarus and Kazakhstan are not yet members of the WTO. In order to reach, nevertheless, the final agreement, a series of compromises needed to be achieved. First of all, the changes do not need to be implemented right away but within a transitional period of seven years with the main changes to be expected after the third year following the accession. The first amendment of the customs import tariff was published on 6 August 2013 and came into effect on 1 September. A total decrease of the rates can be observed from 9.6% to 7.8%. However, importers should also be prepared to see an increase of those rates which are currently lower than the ones provided for by the WTO.

Another issue which many seen related to the decrease in revenue coming from customs payments is the so called recycling fee which was introduced by Russia on 1 September 2012. The fee is levied on motor vehicles, and for cars it ranges from about 420 – 2 700 €. While the fee is imposed on
all imports into Russia, vehicles produced in Russia are exempt. As the fee has a severe impact on EU vehicle exports to Russia, the European Union has already filed the first case against the Russian vehicle recycling fee and is supported also by Japan and
the United States. Moreover, the new certification legislation, called the “Technical Regulations” of the Customs Union will remain in force. This is due to the fact that only in 2010, the three countries decided to introduce the Technical Regulations of the Customs Union and assign the competences regarding their establishment, as well as the coordination and control related to it, to the Customs Union Commission. The scheme elaborated by the Commission introduced 47 regulations of which currently 21 have already come into force, 11 have been approved and another 15 still need to be approved. Starting from 1 January 2012, with the new Technical Regulations of the Customs Union coming into force step by step, the respective national standards will no longer be valid.

The current picture shows that Russia’s accession to the WTO is not the end of a long path but only the first steps towards a more liberal trading environment.

Bettina Wisthaler, Senior Manager Import Handling at RUSSIA CONSULTING