7th Dec 2019

EU takes Russia to world trade body over car tax

  • The EU is taking Russia to court over a tax on car recycling (Photo: EUobserver)

The European Commission has filed its first ever complaint against Russia at the World Trade Organization (WTO), saying that a fee charged to cover car recycling costs discriminates against EU countries.  

The decision, announced on Tuesday (9 July), comes after Russia joined the trade body last August.

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The dispute rests on the use of car recycling fees. Although a handful of EU countries have their own levy, they are not allowed to have different rates for imported and exported cars.

Russia's car recycling tax charges between €420 to €2,700 for new cars, and up to €17,200 for used cars.

In s statement issued on Tuesday (9 July), the commission said it had "pursued every diplomatic channel for almost one year now to find a solution with our Russian partners on this matter but to no avail. The fee is incompatible with the WTO's most basic rule prohibiting discrimination against and among imports."

"These measures, which are in breach of WTO commitments, should be terminated rapidly," it added.

Under the terms of the WTO, Russia will now have 60 days to address EU concerns by changing the application of the levy. Failure to do so would leave the EU to request arbitration by the WTO.

The WTO has the power to force a change of policy from Moscow or to impose trade sanctions.

Despite joining the WTO nearly a year ago, there remains widespread concerns about Russia's application of trade rules. 

The dispute is the latest indication of increasingly chilly relations between Brussels and the Kremlin.

The EU's executive arm is also carrying out its own anti-trust investigation into Russian energy giant Gazprom.

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