Russia abolishes the preferences on component imports for industrial assembly of cars

Russia abolishes the preferences on component imports for industrial assembly of cars

Autostat – Russia has abolished the preferences on component imports for industrial assembly of cars, as a membership obligation to the WTO.

As one may remember, the car manufacturers had the right to import components duty-free under the industrial assembly regime, as long as the localisation requirements for production were fulfilled, according to a decree introduced by the government in 2005. The regime operates through compensation of duties by the state, which is against the WTO rules.

In the meantime, a draft has been prepared by the Ministry of Industry and Commerce previously, for the purpose of updating the rules on granting state subsidies to car manufacturers. The draft proposes the reimbursement of costs to the car producers, arising from the increase in the rates of customs duties on imports as of the 1st of July. Additional subsidies will be paid out monthly, the performance indicators of which are planned to be set individually for each manufacturer. In essence, the compensations are guaranteed, as long as the obligations of the industrial assembly regime are fulfilled. In case of violation of obligations, the subsidies will be returned to the federal budget in full, as highlighted in the document.