Customs Issues For Car Manufacturers
Rates of duty on new passenger cars
The coming into force of the Customs Code of the Customs Union on 6 July, 2010 meant that a single customs territory was formed, uniting the territories of the Customs Union member states. The authority for establishing, amending or scrapping the rates of import duty has been transferred to the Commission of the Customs Union, whose functions since 1 January, 2012 are performed by the Eurasian Economic Commission (the “EEC”).
Goods originating from the territory of the Customs Union member states and foreign goods released into free circulation in at least one of the Customs Union member states may be moved within the single customs territory, without any customs formalities having to be carried out. There exist only certain temporary exceptions and restrictions. In particular, Belarus and Kazakhstan joined the Customs Union, they reserved the right to retain lower rates of import duty than in Russia, in particular, in relation to passenger cars imported by individuals. However, such goods may not be imported into Russia without the difference in import duty rates being paid. The current customs duty rates on new passenger cars are harmonised and are 30% of the customs value of the car, but not less than 1.2 – 2.8 Euros (EUR) per cubic metre of engine capacity.
In accordance with obligations undertaken by Russia to the WTO, the rates will have to be reduced, upon Russia’s accession to the WTO, to the level in force up to 2008, and then, within seven years, to 15% of the customs value taking account of the fact that in the first three years there will be no reduction (please see Table No. 1). It is expected that more detail will be added to the classification codes for cars, by bringing in new commodity headings for All Terrain Vehicles (ATVs) and Sport Utility Vehicles (SUVs).