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Entry into Force of the Amendment of the Government of the Russian Federation Law on Recycling Fees for Motor Vehicles

The Government of the Russian Federation (Russia) implemented on January 1st 2014 an amendment of the law on recycling fee for motor vehicles, about which Japan had requested modification through consultations under the WTO dispute settlement procedure. This amendment eliminates most of the discriminatory aspects of the recycling fee scheme.
Japan will continue to closely watch the implementation of the law and related implementing regulations and to request Russia to ensure its WTO consistency.

1. Background of this issue

In September 2012, Russia introduced a recycling fee on motor vehicles. A recycling fee was imposed on each vehicle imported into Russia or manufactured on the territory of Russia for the purpose of appropriate recycling of motor vehicles. Although the system imposes a recycling fee on both domestic manufacturers and importers of motor vehicles, it exempts from the fee vehicles manufactured by domestic companies that have committed to ensure the safe handling of waste, and vehicles imported from within the Customs Union of the Republic of Kazakhstan, the Republic of Belarus, and Russia, thereby essentially giving preference to domestically manufactured vehicles over imported ones.

Since the recycling fee system appeared to be inconsistent with the WTO national treatment obligation (Article III of the GATT: The General Agreement on Tariffs and Trade 1994) and some other provisions, Japan repeatedly requested Russia to make modifications to the system in collaboration with the United States and the European Union. Due in part to these efforts, in April 2013, Russia released a draft law to amend the recycling fee system. However, the process to enact the law in the national diet was delayed, and it became unknown when the law would be finalized even after the original implementation date of July 2013.

In responding to this situation, in July 2013, Japan made a consultation request to Russia under the WTO Agreement to seek a prompt solution of this issue at almost same time with EU’s consultation request. This consultation request under the WTO Understanding on Rules and Procedures Governing the settlement of Disputes against Russia was the first one since Russia’s accession to the WTO in August 2012.

On 13 August 2013, Japan held consultations with Russia in Geneva, Switzerland, discussing the consistency of the recycling fee system with WTO Agreements. Since then, Japan conducted bilateral consultations with Russia on several occasions. Russia proceeded to finalize the discussion in the national diet on the amendment of the law, and the law was signed by President Vladimir Putin on 21 October 2013, taking effect on 1 January 2014.

2. Achievement

Through this amendment, most of the discriminatory aspects of the recycling fee system were solved by eliminating exemptions to domestic manufactures and to vehicles imported from within Customs Union.

In Japan’s view, the resolution of disputes related to the WTO Agreement through use of the WTO dispute resolution system would enhance Russia’s compliance with WTO Agreement, and leads to the enhancement of the credibility of the WTO system itself.

Japan will continue to closely watch the implementation of the law and related implementing regulations with an aim to ensure that Japanese industry does not suffer from discriminatory treatment.

Reference

METI News Releases (July 24, 2013)

Japan requests a consultation with Russia under the WTO Agreement regarding recycling fees on motor vehicles.
http://www.meti.go.jp/english/press/2013/0724_01.html

METI News Releases (August 14, 2013)

Japan held a consultation with Russia under the WTO Agreement regarding the motor vehicle recycling fees that Russia imposes on motor vehicle importers and domestic producers.
http://www.meti.go.jp/english/press/2013/0814_01.html

Release Date

January 7, 2014

Division in Charge

  • Multilateral Trade System Department, Trade Policy Bureau
  • Automobile Division, Manufacturing Industries Bureau
  • Russia, Central Asia and Caucasus Office, Europe Division, Trade Policy Bureau

Related Information

WTO

Regional Affairs / Russia

Ministry of Economy, Trade and Industry
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