WTO has ordered Russia to change duties on LCVs

WTO has ordered Russia to change duties on LCVs

Kommersant – WTO panel of arbitrators has found inconsistencies on anti-dumping duties introduced by Russia in 2013 on LCV imported from Italy and Germany to Customs Union countries, as stated by the European Commission (EC) on Friday. The EC emphasises that the introduction of these tariffs is one of the number of measures taken by Russia, against exports from the EU countries. European Commissioner for Trade Affairs: Cecilia Malmström has referred to the anti-dumping duties on LCVs as unfairly protectionist and anti-competitive measures in the EC report and noted that these tariffs contradict with the commitments made by Russia at the time of accession to WTO.

According to the panel of arbitrators, the inconsistencies need to be addressed, however, the abolishment of tariffs has not been discussed. As clarified by the Eurasian Economic Commission (EEC), the EU was unable to prove the invalidity of the anti-dumping measures taken by Russia on light commercial vehicles from Germany and Italy, in the dispute between the country and the WTO. Upon examination of the dispute, the panel has agreed with some of the claims against the procedure of the anti-dumping investigation, however, did not require the cancellation of the protective measures or even the suspension of their implementation. More important is the fact that the EU has not tried to challenge the dumping made by its own manufacturers, as highlighted by the EEC.

EEC brought anti-dumping tariffs between 23-30% on 2.8-3.5 tonnes light commercial vehicles from Germany, Italy and Turkey in 2013. The measures cover diesel engine LCV with cylinder capacities not more than 3000 m3 and all-metal cargo van modifications (up to 2 tonnes carrying capacities) or combi – freight-and-passenger vans (for the combined transport of goods and people). The investigation, initiated by Sollers, may affect Volkswagen, Mercedes-Benz, FIAT and Peugeot-Citroen.

The panel of arbitrators has agreed with the arguments of EU that having excluded from the calculations certain manufacturers in the domestic market, Russia has fabricated a damage analysis, allegedly suffered by its factories on unrealistic figures, the report said. Evaluating the effect of dumping, the Russian side, according to the EU, did not take into consideration the excess capacities in LCV production, which at the time amounted to seven times the Russian market. The source of Kommersant in automotive market has said that the argument on such an excess is incorrect – “during the time of the investigation, only GAZ Group and Sollers-Elabuga (FIAT Ducato assembly) had the capacities and they had no excess for sure”. The companies did not comment on the situation. 

Under the rules of WTO, it’s possible for the sides of the dispute to appeal against the decision of the panel within 60 days after its publication. The Ministry of Economy has stated that the final decision on the appeal is still pending, but it’s likely to be filed. The ministry has added that the decision of the panel doesn’t indicate that the anti-dumping duties on LCV imports from Germany and Italy are illegal. The Russian side doesn’t agree with the findings of violations of WTO rules by the Russian Federation, the ministry noted. The WTO arbitrators have not agreed with 22 EU requests out of 31, within the frame of the investigation, said the director of Ministry of Economy Trade Negotiations Department: Maxim Medvedkov. “These, of course, are provisional figures, however, they reflect the general outcome of the case” – Medvedkov says. – “We will analyse the findings of the arbitrators on the remaining one-third and possibly challenge them to some extent, particularly the procedural issues”.