EU has launched its first challenge against Russia on its “recycling fee” on vehicles and has requested consultations in the World Trade Organization on 9 July. The levy is imposed after Russia joined the WTO last August. Russia’s car recycling tax charges between €420 to €2,700 for new cars, and up to €17,200 for used cars. In a 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.”
However, Russia has responded that it has never made good on its obligations, and the tax on car, introduced by Russia after becoming a member of the WTO for nine days, is one of a slew of non-compliant policies on goods which included alcoholic drinks to combine harvesters.
Cutting the car import tariff had been a major discussion topic for Russia throughout the 18 years of negotiation to join the WTO. Moscow has agreed to do so. However, in the eyes of EU, the recycling fee actually cancels out the tariff cut. Russia now has 60 days either to change its policy to satisfy the EU or clarify its policy. After that the EU could ask the WTO to adjudicate and the WTO has the power to force a change of policy from Moscow or to impose trade sanctions.