July 18, 2012

Russian dairy import tax to become smaller on WTO membership

The customs levy on Russia's dairy imports will be lessened from the current 19.9% to 14.9% when the country joins the World Trade Organization (WTO), an Estonian official dealing with matters of WTO said.

The average Russian tariff on farm imports meanwhile is set to drop to 10.8% from the present 13.2%, Kristina Uibopuu, adviser on WTO at the Estonian representation in Geneva, told BNS.

Russia's accession negotiations with WTO lasted 18 years and the chapter on agriculture in the accession report is the longest in the history of WTO, according to Uibopuu. "Since Russia has so far applied relatively high tariffs on imports, pressure on the part of WTO members during the negotiations to reduce tariffs was big," she said.

The tariff rate for beef applicable to amounts imported under the quota will be 15% and for poultry meat 25%.

It will be possible to import into Russia 400,000 tonnes of pork from the EU tariff-free per year. "This definitely is good news for Estonian meat processing companies, but to be absolutely precise let us remember that Russia was able to get a time limit for that," said Uibopuu. The zero tariff will be applied until the end of 2019, after which a common rate of 25% will apply to everyone, including countries of the EU.

While most of the lower tariffs will take effect from day one of Russia's membership, the cut from 80% to 25% in the rate for chicken meat will be implemented with an eight-year transition period.

Under the WTO accession agreement, Russia has assumed the obligation to abolish all the present export support payments. By the moment of accession Russia must do away with all country-specific customs procedures. "It must treat all importers equally, no matter whether it's Estonia or Argentina," said Uibopuu.

By now Russia has made available a website at WTO's demand that must contain the latest information on applicable customs procedures.

Besides all VAT related decisions by Russia in the future must correspond to the WTO treaty." The most important of them is a unified VAT rate for locally produced and imported products," said Uibopuu.

Disputes related to WTO are solved in the DSB, or Dispute Settlement Body, also dubbed the WTO court. "Decisions made by that body are mandatory for member states and when it's clear that some member state during a longer period of time violates the rules valid in that organisation, the suffering nation has the right to take steps in DSB," Uibopuu added.