DS: Russia — Tariff Treatment of Certain Agricultural and Manufacturing Products

The European Union challenged tariff treatment that Russia's customs authority is, or was at the time of the Panel's establishment, required to apply to products imported under certain tariff lines pursuant to the Common Customs Tariff of the Eurasian Economic Union (the “CCT”). The affected products include paper and paperboard, palm oil and its fractions, refrigerators and combined refrigerator-freezers.

More specifically, the European Union challenged twelve measures. The first eleven challenged measures concerned the tariff treatment that Russia's customs authority is, or was at the time of the Panel's establishment, required to apply in respect of individual tariff lines. The twelfth measure, which was referred to by the European Union as the “Systematic Duty Variation” or “SDV”, allegedly consisted of a general practice of systematically according to a significant number of tariff lines in the CCT certain types of tariff treatment that lead to the application of duties in excess of Russia's Scheduled bound rates. 

The EU claimed that these measures lead, or led at the time of the Panel's establishment, to the application of ordinary customs duties in excess of those set forth in Russia's Schedule of Concessions, and is or was therefore inconsistent with Article II:1(a) and (b) of the GATT 1994.

The Panel found:

• that the first to fifth measures at issue, which consist of ad valorem duty rates applied in excess of ad valorem bound rates, are inconsistent with Article II:1(b), first sentence, because they require the application of ordinary customs duties in excess of those set forth in Russia's Schedule;
   
• that the sixth measure at issue, which consisted at the time of the Panel's establishment of an ad valorem duty rate that was required to be applied in excess of an ad valorem bound rate as from 1 January 2016, was, at the time of the Panel's establishment, inconsistent with Article II:1(b), first sentence, because it required the application, at what was then a future date, of ordinary customs duties in excess of those set forth in Russia's Schedule. The Panel also made findings on the EU's claim that the sixth measure was inconsistent with Article II:1(a) independently of a finding of inconsistency under Article II:1(b), first sentence, because it provided for a temporary duty reduction between 20 April 2013 and 31 December 2015 inclusive and at the same time established a future duty rate that exceeded the bound rate. The Panel found that the EU failed to establish that separate claim. In particular, the Panel found that the EU failed to establish its assertion that the sixth measure resulted in a lack of foreseeability for traders and hence in less favourable treatment than that provided for in Russia's Schedule;
   
• that the seventh and eighth measures, which consisted at the time of the Panel's establishment of combined duty rates applied in excess of ad valorem bound rates, were, at that time, inconsistent with Article II:1(b), first sentence, because they required the application of ordinary customs duties in excess of those set forth in Russia's Schedule;
   
• that the ninth measure at issue, as amended from 1 September 2015 and consisting of a combined duty rate applied in excess of an ad valorem bound rate, is inconsistent with Article II:1(b), first sentence, because it requires the application of ordinary customs duties in excess of those set forth in Russia's Schedule;
   
• that the tenth and eleventh measures at issue, which consisted at the time of the Panel's establishment of combined duty rates applied in excess of combined bound rates, were, at that time, inconsistent with Article II:1(b), first sentence, because they required the application of ordinary customs duties in excess of those set forth in Russia's Schedule;
   
• that in respect of the twelfth measure at issue (the alleged “SDV”) the EU failed to establish its claims of inconsistency with Article II:1(a) and (b), because it failed to demonstrate the existence of the twelfth measure. In particular, the Panel found that the EU did not submit evidence sufficient to establish either that the alleged measure was applied “systematically” or that it constituted a “general” practice.

The Panel exercised judicial economy with respect to the EU's consequential claims of violation under Article II:1(a) regarding the first to eleventh measures at issue.