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Russia imposes import sanctions on Ukrainian chocolate

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By Nathan Gray+

10-Jul-2013

Russia will impose a 0.1€ per kilogramme levy on Ukrainian chocolate in retaliation for the country placing an import tax on cars.
Russia will impose a 0.1€ per kilogramme levy on Ukrainian chocolate in retaliation for the country placing an import tax on cars.

Russia has placed new trade sanctions on the import of Ukrainian chocolate and other consumer goods in retaliation for a Ukrainian emergency import tax on cars.

The Russian Federation has notified the World Trade Organization (WTO) that it will increase tariffs on Ukrainian chocolate and other goods including coal and glass in retaliation for emergency duties Kiev placed on imported cars.

The new import tax will see a 0.1€ per kilogramme levy on Ukrainian chocolate.

Russia is the second country to formally retaliate for the Ukrainian duties, after Turkey filed a similar notification last month saying it would increase taxes on walnuts imported from Ukraine in response. The European Union, Japan and South Korea — the other major automobile exporters to Ukraine — have also previously expressed opposition to the Ukrainian car tax.

Retaliation tax

In a WTO filing, Russia said the Ukrainian car tax would hit car exports worth $328 million, raising $36 million of tax. To offset this, Moscow said it will now impose a duty of 0.1€ per kilo of Ukrainian chocolate, 15% on glass and 54% on coal.

Russia said its proposed tax on Ukrainian chocolate imports would come into force as soon as it was adopted by the Customs Union - which also includes Kazakhstan and Belarus.

Safeguard rules

Ukraine imposed the emergency car tax under the WTO "safeguard" rules - which allow countries to protect a sector if there is a threat of serious damage to producers from a surge in imports. However there are strict rules about the use of such safeguards, which Ukraine is accused of ignoring.

In response, WTO members affected by the car tax are allowed to levy an equivalent tax on Ukrainian imports. Russia is the second of five concerned WTO members to spell out how it plans to punish Ukraine over the car tax - Turkey has already said it plans to target Ukrainian walnuts.

Other members concerned with the tax - including Japan, South Korea and the EU, have not yet released details of any retaliation taxes, which may also see a focus on food and confectionery ingredients such as chocolate and walnuts.

1 comment (Comments are now closed)

Roshen's owner's brown nosing nets him nothing

Awww. And after Poroshenko switched all his chocolate production to Russiam language labelling. Now Ukrainian Canadians won't touch the stuff and neither will his Russian buddies.

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Posted by Mirko
16 July 2013 | 01h18

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