EU plea in Russia car levy row

The European Commission, the EU’s executive arm, said it had asked the WTO to establish a dispute settlement panel to adjudicate on the fee. The EU believes the charge discriminates against EU vehicle exports to Russia, worth some 10 billion euros ($13.5bn) per year.

If the three-person panel rules in the EU’s favour, Russia can appeal but otherwise it will be forced to change its rules or face trade sanctions. The move risks Russian retaliation against EU policies.

“As the fee continues to severely hamper exports of a sector that is key for Europe’s economy, we are left with no choice but to ask for a WTO ruling to ensure Russia complies with its international obligations,” said EU Trade Commissioner Karel De Gucht.

By triggering WTO litigation, the EU has raised the temperature in the dispute and signalled that attempts to negotiate a solution with Russia have failed. The dispute has highlighted Russia’s bumpy start as a member of the WTO, which it joined barely a year ago, 19 years after it first applied.

The EU initially launched the complaint in July, telling the WTO it believed Russia was illegally protecting its carmakers and had given up waiting for Moscow to change the law.

In that first stage, the EU requested consultations with Russia, with a 60 day period set to find a solution. Japan also filed a trade complaint against Russia over the recycling fee in July.