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 Russia Declares War on Ukrainian Cars

Starting September 1, the utilization duty on transportation means supplied to Russia by Ukraine will be paid in full volume.

Deputy head of the Federal Customs Income and Tariff Regulation Department of the Russian Federal Migration Service Rustam Khakimov noted that "the federal law sets the list of exemptions and the exemptions are only for the members of the Customs Union (Russia, Belarus and Kazakhstan). I am not prepared to say if it is against the Free Trade Area regulations".

He also said that Russian Ministry of Industry and Trade is conducting further negotiations in this regard.

The official said that the federal law does not provide any exemptions for cars produced in Ukraine. The utilization duty will be regulated by a separate government decree that will be issued in the next couple of days.

Khakimov said that the Fedearal Migration Service is authorized to collect this duty. According to him, it will be charged for transportation means produced by Russian companies who did not undertake the obligation of safe utilization or imported into Russia except those who are exempt from payment. This first of all refers to the cars produced within the Customs Union.

Ukrainian goverment thinks that the introduction of the utilization duty on imported cars does not comply with the Agreement on Free Trade Area of CIS and other documents.

Nikolay Azarov noted that introducing 30% utilization duty on cars will lead to substantial decrease in supplies of Ukrainian cars into Russia and vice versa. Experts think that such action will lead to 10-20% price increase for Ukrainian cars in Russia.

 
 
 
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