EU files 1st WTO case against Russia over car levy

BRUSSELS - The European Union Tuesday launched its first trade dispute with Russia to the World Trade Organization (WTO),challenging Russia's so-called "recycling fee" on imported vehicles.

According to a statement released by the EU, the fee has to be paid for all vehicles imported from the EU. As an example, for cars, the fee ranges from approximately 420 euros (540 U.S. dollars) to 2700 euros per "new" vehicle and from about 2600 euros to 17200 euros for a vehicle older than three years. For some vehicles, such as certain mining trucks, it can go as high as 147700 euros.

The EU believes that the aim of Russia's "recycling fee" is not to help the environment but discriminate arbitrarily and unjustifiably against imported vehicles.

The EU's own measures to deal with end-of life vehicles show that environmental objectives can be achieved very effectively without applying the sort of high and discriminatory fees imposed by Russia.

The EU has repeatedly voiced its concerns regarding the "recycling fee" in bilateral discussions with Russia, both before and after its introduction on 1 September 2012.

In 2012, the value of EU vehicle exports to Russia topped 10 billion euros. The fee estimates represents 1.3 billion euros annually in extra Russian government revenues.

The EU complained that the fee imposes an additional burden on imported vehicles and nullifies the reductions in import tariff Russia agreed to in the WTO.

The EU's request for WTO consultations formally initiates a dispute under the WTO dispute settlement understanding. Consultations give the EU and Russia the opportunity to discuss the matter and to find a satisfactory solution without resorting to litigation.

If these consultations do not reach a satisfactory solution within 60 days, the EU may ask the WTO to set up Panel to rule on the legality of Russia's measures.  (1 euro=1.286 U.S. dollars)