17:57 31.07.2013

Ukraine joins Japan's consultations with Russia over auto recycling tax

2 min read

Ukraine, which is already a party to WTO consultations between the EU and Russia concerning the car recycling tax Moscow imposed in 2012, has joined the consultations on the matter initiated by Japan.

Ukraine filed to become a third party to the consultations between Japan and Russia on July 29, the Economic Development and Trade Ministry said.

"The European Union notified the WTO Secretariat on July 9, 2013 of a request for consultations with the Russian Federation on measures imposed by Russia relating to a charge, the so called 'recycling fee', imposed on motor vehicles," the WTO said on its website. Ukraine, China, Japan, Turkey and the U.S. are also parties to those consultations.

Tokyo filed a similar request for consultations on July 24. Kyiv, Ankara and Washington have all asked to join those consultations.

Russia began levying the recycling tax on cars and trucks produced in Russia or imported from other countries (except the Customs Union countries) on September 1, 2012. The basic size of the tax is 20,000 rubles. The big Russian vehicle makers - Avtovaz, Kamaz, GAZ and Sollers - have been exempted from the tax based on guarantees that output will be safely scrapped.

"According to the European Union, these measures adversely affect exports of motor vehicles from the European Union to Russia," the WTO said.

The Economic Development and Trade Ministry reported that consultations between the EU and Russia were held at European Commission headquarters in Brussels on July 29-30. Ukraine presented its view of the situation, that the Russian tax should be rescinded because it is discriminatory and violates the core principles of the WTO concerning non-discriminatory and free trade.

Introduction of the tax resulted in a decline of more than 50% in vehicle production in Ukraine in 2013. Its vehicle exports to Russia were down 75% in the first half of 2013 year-on-year.

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