ALEXANDER KNOBEL ON DRAFT AMENDMENTS TO THE LAW ON CUSTOMS TARIFF

The Ministry of Economic Development has drafted amendments to the law “On Customs Tariff”, thereby allowing the government to temporarily reduce export duty rates for exports to so-called friendly countries and zero out rates for exports of goods from certain regions of Russia.

Alexander Knobel expressed the opinion that currently the government is facilitating the introduction of export duties and systematize the tools for their application. The expert believes that the reasons for such actions can be “the need to compensate for losses from unfriendly actions of some countries for certain industries,” he believes. The goods that could potentially be affected by the bill could be traditional goods of Russian exports, for which export duties have been applied or discussed in one form or another: ferrous and non-ferrous metals, fertilizers, grain.

According to Alexander Knobel, such measures will unlikely concern the oil and petroleum products, as in 2023 the tax manoeuvre will come to an end, resulting in a zero export duty for trading these energy sources planned to be used as from the next year.

The draft law also provides for the government to be able to establish export tariff quotas providing for the application of a lower or zero rate of export customs duty on the export of a certain quantity of goods (in physical or value terms) for a period not exceeding one year. This norm will be valid for certain types of goods produced in the regions, in respect of which “restrictive measures are in force in connection with unfriendly actions of certain foreign states”; their geographical location (remoteness from sales markets, centers for storage and processing of products) “requires a special approach in the application of measures to regulate the export of such goods.”

Alexander Knobel believes that this norm will mainly concern the regions producing the respectively dutiable exported goods. “On the whole, the practice of applying different export duties for goods from various regions or supplied to various countries is not very common,” the expert emphasized.