Russia continues to maintain a number of barriers with respect to imports, including tariffs and tariff-rate quotas, discriminatory and prohibitive charges and fees, and discriminatory licensing, registration and certification regimes. For more detailed information concerning tariffs, please refer to the “Customs Regulations and Contact Information” section below. The following is a selection of tariff ranges for popular U.S. goods entering Russia.
Changes in the Commodity Schedule were implemented in 2004 in accordance with the international obligations of the Russian government to comply with HS codes and Russia's intention to enter the WTO. The new customs tariff schedule changed rates for 140 categories of commodities, lowering the tariff ceiling for 90% of the categories. Notable changes included lowering import tariffs for audio- and video- equipment and components from 20% to 15%, for fruits and vegetables from 10% to 5% and for sewing machines from 25% to 20%. Certain commodities continue to be regulated through seasonal duties and quotas.
In addition to tariffs, there are two other charges applied to imports: The ubiquitous Value Added Tax (VAT) and selective excise taxes. The universal VAT rate was reduced from 20% to 18% effective January 1, 2004 (with the exception of foodstuffs, pharmaceuticals and medical supplies for which VAT is 10%) and is applied to the import price, tariff, and excise tax combined. There are some exemptions from VAT. For example, resolution No.19 of January 17, 2001 provides a list of vitally essential medical equipment to which no VAT is applied. The excise tax applies to a number of luxury goods, alcohol and cigarettes, and varies from 20% to 570%.
From December 2008 through February 2009, the Russian government announced a series of significant duty increases on cars, harvesters, certain steel products (including pipes, tube and rebar), and certain agricultural products (including butter, milk and soy meal). These duty increases, which will be in effect for a temporary period of nine months, will likely be a hindrance to U.S. exports to Russia. After the initial nine-month period, the Russian government will make a determination whether to maintain the duty increases or to let them expire.
The duties on imported vehicles increased by as much as 20% for new cars, and increased to a prohibitive level for used cars older than four years. U.S. automobile makers already manufacturing in Russia will be less affected because the duty increases will only impact their imported vehicles and will not apply to their cars produced or assembled at Russian plants. The duty rates for harvesters were increased dramatically by at least 200%. The duty increases will likely contribute to sales declines in Russia for the major U.S. and EU producers of agriculture equipment, as will other factors, including the strengthening of the dollar and Euro against the ruble and the current difficulties in securing financing within Russia for the purchase of foreign agricultural equipment. The duty increases for butter and milk were also substantial, while the duty increase for soy meal (used as a protein supplement in animal feed) was more modest.
It appears that the Russian government imposed these measures mainly to protect domestic producers from competing imports during the global economic crisis. The duty increases for soy meal were also likely intended as a revenue collection measure. As Russian companies continue to struggle with the crisis, it is possible that the Russian government will impose additional duty increases on other imported goods.
In addition to duty increases, the Russian Ministry of Industry and Trade is currently conducting global safeguards investigations of harvesters and of certain steel products. Those trade investigations, which will likely conclude in February and March 2009, could result in the imposition of additional duties or import quotas on those products.