DISPUTE SETTLEMENT

DS: Russia — Tariff Treatment of Certain Agricultural and Manufacturing Products

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

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Current status

 

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Key facts

Short title:
Complainant:
Respondent:
Third Parties:
Agreements cited:
(as cited in request for consultations)
Request for Consultations received:
Panel Report circulated: 12 August 2016

  

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Latest document

  

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by the European Union.

On 31 October 2014, the European Union requested consultations with the Russian Federation regarding the tariff treatment that it accords to certain goods in both agricultural and manufacturing sectors.


The European Union claims that the measures appear to be inconsistent with:

  • Articles II:1(a), II:1(b) and VII of the GATT 1994; and
     
  • Articles 1 through 7, and Annex I, of the Customs Valuation Agreement.

On 6 November 2014, Ukraine requested to join the consultations. On 14 November 2014, Indonesia, Japan and the United States requested to join the consultations.

On 26 February 2015, the European Union requested the establishment of a panel. At its meeting on 10 March 2015, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

At its meeting on 25 March 2015, the DSB established a panel. Brazil, Canada, Chile, China, Colombia, India, Japan, Korea, Moldova, Norway, Ukraine and the United States reserved their third-party rights. Subsequently, Australia and Singapore reserved their third-party rights.

On 8 June 2015, the European Union requested the Director-General to compose the panel. On 18 June 2015, the Director-General composed the panel.

On 15 December 2015, the Chair of the panel informed the DSB that the panel expects to issue its final report to the parties by mid-April 2016, in accordance with the timetable adopted after consultation with the parties.

On 12 August 2016, the panel report was circulated to Members.

The European Union challenged tariff treatment that Russia's customs authority is, or was at the time of the Panel's establishment, required to apply to products imported under certain tariff lines pursuant to the Common Customs Tariff of the Eurasian Economic Union (the “CCT”). The affected products include paper and paperboard, palm oil and its fractions, refrigerators and combined refrigerator-freezers.

More specifically, the European Union challenged twelve measures. The first eleven challenged measures concerned the tariff treatment that Russia's customs authority is, or was at the time of the Panel's establishment, required to apply in respect of individual tariff lines. The twelfth measure, which was referred to by the European Union as the “Systematic Duty Variation” or “SDV”, allegedly consisted of a general practice of systematically according to a significant number of tariff lines in the CCT certain types of tariff treatment that lead to the application of duties in excess of Russia's Scheduled bound rates. 

The EU claimed that these measures lead, or led at the time of the Panel's establishment, to the application of ordinary customs duties in excess of those set forth in Russia's Schedule of Concessions, and is or was therefore inconsistent with Article II:1(a) and (b) of the GATT 1994.

The Panel found:

  • that the first to fifth measures at issue, which consist of ad valorem duty rates applied in excess of ad valorem bound rates, are inconsistent with Article II:1(b), first sentence, because they require the application of ordinary customs duties in excess of those set forth in Russia's Schedule;
     
  • that the sixth measure at issue, which consisted at the time of the Panel's establishment of an ad valorem duty rate that was required to be applied in excess of an ad valorem bound rate as from 1 January 2016, was, at the time of the Panel's establishment, inconsistent with Article II:1(b), first sentence, because it required the application, at what was then a future date, of ordinary customs duties in excess of those set forth in Russia's Schedule. The Panel also made findings on the EU's claim that the sixth measure was inconsistent with Article II:1(a) independently of a finding of inconsistency under Article II:1(b), first sentence, because it provided for a temporary duty reduction between 20 April 2013 and 31 December 2015 inclusive and at the same time established a future duty rate that exceeded the bound rate. The Panel found that the EU failed to establish that separate claim. In particular, the Panel found that the EU failed to establish its assertion that the sixth measure resulted in a lack of foreseeability for traders and hence in less favourable treatment than that provided for in Russia's Schedule;
     
  • that the seventh and eighth measures, which consisted at the time of the Panel's establishment of combined duty rates applied in excess of ad valorem bound rates, were, at that time, inconsistent with Article II:1(b), first sentence, because they required the application of ordinary customs duties in excess of those set forth in Russia's Schedule;
     
  • that the ninth measure at issue, as amended from 1 September 2015 and consisting of a combined duty rate applied in excess of an ad valorem bound rate, is inconsistent with Article II:1(b), first sentence, because it requires the application of ordinary customs duties in excess of those set forth in Russia's Schedule;
     
  • that the tenth and eleventh measures at issue, which consisted at the time of the Panel's establishment of combined duty rates applied in excess of combined bound rates, were, at that time, inconsistent with Article II:1(b), first sentence, because they required the application of ordinary customs duties in excess of those set forth in Russia's Schedule;
     
  • that in respect of the twelfth measure at issue (the alleged “SDV”) the EU failed to establish its claims of inconsistency with Article II:1(a) and (b), because it failed to demonstrate the existence of the twelfth measure. In particular, the Panel found that the EU did not submit evidence sufficient to establish either that the alleged measure was applied “systematically” or that it constituted a “general” practice.

The Panel exercised judicial economy with respect to the EU's consequential claims of violation under Article II:1(a) regarding the first to eleventh measures at issue.

At its meeting on 26 September 2016, the DSB adopted the panel report.

 

Reasonable period of time

On 10 November 2016, the Russian Federation and the European Union informed the DSB that they had agreed that the reasonable period of time to implement the DSB's recommendations and rulings shall be 7 months and 15 days. Accordingly, the reasonable period of time is set to expire on 11 May 2017.

 

Implementation of adopted reports

On 8 June 2017, the Russian Federation informed the DSB that it had complied with the DSB's recommendations and rulings through certain decisions of the Board of the Eurasian Economic Union and of the Council of the Eurasian Economic Commission.

 

 

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