Dispute settlement | Geneva, 26 February 2015
EU requests WTO dispute settlement panel over Russia’s excessive import duties
The EU requested today the establishment of a dispute settlement panel at the World Trade Organization (WTO) in Geneva concerning Russia’s excessive import duties, in particular on paper products, refrigerators and palm oil. This request follows EU efforts to find a solution with Russia since it joined the WTO in August 2012, including through formal WTO consultations that were held in November.
Upon joining the WTO, Russia committed to keep its import duties below the limits expressed in the accession documents. However, it has continued taxing a number of products across various sectors more heavily than agreed. This is still the case today for certain products of interest for the EU.
Russia diverges from what was decided at the time it was joining the WTO in two ways: either it applies a higher duty rate, e. g. 15% instead of 5% for paper products, or, in case of refrigerators and palm oil, it fixes a minimum amount that needs to be paid even if not justified by the agreed duty rate expressed in a percentage of the product value.
Those higher duties have a clear negative impact on European exports of paper products, refrigerators and palm oil that are worth approximately €600 million a year. The non-respect of tariff commitments raises also a systemic concern as it constitutes a violation of one of the key WTO principles.
On 31 October last year the EU requested formal WTO consultations with Russia on this matter. The consultations took place on 28 November but failed to resolve the dispute and excessive import duties continue to be applied by Russia.
The EU had no choice, therefore, but to proceed with this next step in WTO litigation.
Trade facts and figures
Russia is the EU's third most important trading partner. EU exports to Russia amount to €120 billion a year and are dominated by machinery, transport equipment, chemicals, medicines and agricultural products. However, the unilateral measures adopted by Russia have had negative impact on EU-Russia trade in the recent period. The case referred today to the WTO is the fourth since Russia joined the Organisation in 2012.
Next steps in WTO dispute settlement procedures
The request for the establishment of a panel will be discussed for the first time at the meeting of the WTO Dispute Settlement Body (DSB) on 10 March 2015. At that meeting Russia can, under the dispute settlement rules of the WTO, object to the establishment of the panel. If the EU tables this issue again at the following DSB meeting (to be held on 25 March 2015), Russia will be unable to block the request and, consequently, the panel will be established. The following step after the establishment of the panel is the composition of the panel by the parties and/or the WTO Director-General, by selecting three persons serving as panellists, who will then start the actual adjudication procedure.
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