The Dispute Settlement Body of the World Trade Organization (WTO) deferred the establishment of a panel to examine the European Union's complaint over Russia's recycling fee on motor vehicles after Russia objected to the panel.

The EU called for the panel to be established amid concerns that Russia's motor vehicle recycling fee was having a negative economic impact. The European Commission argues that the fee creates an additional burden for EU exports and offsets the reduction in import tariffs Russia accepted when joining the WTO.

The EU noted the Duma's recent adoption of a law amending the measures but had yet to receive any clarification regarding the implementing of the rules.

Russia said that it regretted the EU's request for the establishment of a panel and added that it had responded to the EU's questions and had provided additional information. Russia noted that the EU request covered measures in respect of which Russia had launched a process of modification. The respective legislation was adopted by the Duma in the first reading on October 08, 2013 and finally on October 16. The legislation, which had been signed by the Russian President, eliminated sections of the existing utilization fee regime which the EU had referred to in its request for consultations.

Russia said it believes that the matter can be resolved through consultations and is thus not in a position to agree to the establishment of a panel.

The vehicle recycling fee was introduced on September 01, 2012, only days after Russia's WTO accession. It is levied on imported cars, trucks, buses and other motor vehicles. For cars, it ranges from about EUR420 to EUR2,700 for a new vehicle and from EUR2,600 to EUR17,200 for a vehicle older than three years. For some vehicles, such as certain mining trucks, the fee is as high as EUR147,700. However, vehicles from Russia and its Customs Union partners Kazakhstan and Belarus are exempt from the tax.

Source: Tax News