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Business

EU seeks WTO ruling on Russian car levy

The EU has taken a dispute with Russia over car imports to the World Trade Organization, claiming Europe’s carmakers are being disadvantaged in the Russian market. At the center of the row is a recycling fee.

The European Union (EU) has moved to take its first trade dispute with Russia to the World Trade Organization (WTO), challenging Moscow's recycling levy on imported cars, the Russian news agency Interfax reported on Tuesday.

Citing a source within the Russian Ministry for Economic Development, Interfax said the move had come as European carmakers felt unfairly disadvantaged by a so-called recycling fee of 20,000 rubles (500 euros, $606) imposed on purchases of foreign cars in the country.

The Interfax report confirmed media reports earlier on Tuesday, quoting EU diplomats as saying the trade action before the WTO was imminent.

“We gave Russia until July 1 to lift these recycling fees and it failed to do so, so that we are taking this to the WTO,” an unnamed EU diplomat told the Reuters news agency.

The diplomat added that the EU hoped the dispute would be resolved quickly, because it was important that Russia, as a new WTO member, played by the rules.

Russia joined the world trade body last year, following 18 years of negotiations. Reducing import tariffs on cars had been a major obstacle in the accession talks as the government had sought to protect Russia's own car industry.

Moscow finally agreed to lower tariffs, but introduced a recycling fee which is collected up-front when a car is imported, thus increasing its cost. The fee doesn't have to be paid on Russian-made cars.

Under WTO rules, Russia has 60 days to allay EU concerns about the levy, by changing or explaining its policy. After this period, the EU could ask the WTO to adjudicate, which could force Moscow to change the rule or face trade sanctions.

uhe/pfd (AFP, Reuters, dpa)