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Pskov region governor Andrei Turchak offered Vladimir Putin to raise customs duties on imported electronics from current maximum 14% to 60%.
19.08.2016

As "Kommersant" came to know, the governor of the Pskov region Andrei Turchak suggested Vladimir Putin to increase customs duties on imported electronics from the maximum of 14% today to 60%. Such measures, predicts Mr. Turchak, will increase the share of domestic production from the current 14% to 50% in just a few years, bring more than 600 billion rubles to the budget and create more than 20 thousand new high-tech jobs. This is a direct violation of the WTO rules, which, among other things, will result in higher prices for electronics for consumers, experts warn.

Governor of the Pskov region Andrei Turchak appealed to Vladimir Putin with a proposal to increase to  duty on the import of electronics in Russia up to 60% ("Ъ" has a copy of the letter). According to the governor, the increased duties on electronics will create a domestic market and increase the investment attractiveness of the industry. "It will become possible to implement a number of projects on the territory of the special economic zone of industrial of "Moglino” type (located in Pskov region, "Ъ"), including the construction of the plant for contract manufacturing of electronics for civil industry with an investment volume of about 2.5 billion RUB and the creation of approximately 1 thousand jobs by GS Group holding, which specializes in the production of set-top boxes and other consumer electronics", says to Mr. Turchak. Altogether, according to the governorберу initiative will ultimately increase the share of domestic products in the market from current 14% to 50% within several years, bring more than 600 billion rubles to the budget and allow to create more than 20 thousand new high-tech jobs.

President of the GS Group holding Andrey Tkachenko also addressed a proposal to increase import duties on consumer appliances and electronics in the Ministry of Industry and Trade and the presidential administration ("Ъ" has a copy of the appeal), and the establishment of a new GS Group production in the Pskov region was discussed at a working meeting in the Ministry of Industry, its final report showed. An interlocutor of "Kommersant", close to the Ministry of Industry and Trade, says that GS Group proposed to increase import duties "for about 600 species of various equipment, from mobile electronics to commercial equipment and air-conditioning” at the meeting. At the same time GS Group itself intends to establish a "contract manufacturing industry, automotive, household appliances and consumer electronics, electronics for housing and housing services, network equipment, security systems", reads Mr. Tkachenko’s letter to the Deputy Minister of Industry and Trade Andrey Boginsky. Production capacity of the plant will allow produce up to 300 thousand units of finished product every month.

Director of strategic marketing at GS Group Andrey Bezrukov confirmed that the holding "supports the proposal to establish the total amount of payments, including customs duties and other payments, from 20% to 60% on import of all kinds of electronic equipment on the example of countries with rapidly growing electronics industry, such as Brazil, India and others". According to him, in connection with the proposed measures for the development of the industry "a certain increase in prices for end devices can be expected, but not directly proportional to the total volume of payments stated".

According to the GfK, the volume of Russian consumer electronics market in the first half of 2016 amounted to 606.7 billion rubles, which is 10.7% higher than the same period of 2015. Andrew Turchak in his letter to the President states that the annual volume of the electronic equipment market in Russia is about 3.5 trillion rubles, while the share of final civil applications products import is 90%.

In accordance with the tariff commitments undertaken by Russia to join the WTO, the maximum level of import duties on consumer appliances and electronics does not exceed 14%, and for some categories of goods is equal to 0%. The increase of duties on electronics is not possible due to the country's commitments to the WTO, the Ministry of Economy told "Kommersant". The Ministry of Industry did not answer "Ъ"’s request. The Eurasian Economic Commission, which makes decisions about changing tariff rates on the territory of the Eurasian Economic Union, said that the proposal to raise the duty on imported electronics has not yet been reported to them. It was impossible to get a comment at the president administration, the press service of Andrei Turchak refused to comment.

Head of Lenovo in Russia, CIS and Eastern Europe Gleb Mishin notes that protective duties on electronics at the amount of 60% will not encourage Russian producers to organize the competition on a global scale production and will only lead to higher prices for the equipment of world manufacturers. "I would not say that Russia is a leader in terms of the penetration of computers in the households, and the price increases will slow down the progress and the emergence of technological innovations among citizens",  says Mr. Mishin. 

Chairman of the Board of the Association of manufacturers of electronic equipment and appliances Svetlana Appolonova said that while Russia stays in the WTO, it does not make sense to discuss such a significant increase in rates for a large number of electronics and technology. "In addition, it simply will not work as long as we have such a non-transparent scheme of work at customs posts and there is an indirect flow of supplies through Kazakhstan and other neighboring countries",  says Ms. Appolonova. 

Senior lawyer A2 law bureau Maria Ponamoreva says that in case of introduction of prohibitive duties WTO will almost certainly require to remove them, and it can also insist on compensation for the financial damage suffered by importers in connection with the payment of the duty. "Otherwise, the country flagrantly violating WTO rules and its own commitments to it, may be excluded from the organization", she recalls.

By Maria Kolomychenko

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