The government of the Russian Federation intends to point and temporarily reduce export duties

The government has prepared a regulatory framework for launching a mechanism of tariff preferences in order to increase the supply of grain, fertilizers and raw materials to friendly countries – a bill has been submitted to the State Duma giving the White House the appropriate powers. The government will be able to temporarily introduce reduced rates for the export of certain goods to certain countries (or originating from certain regions). The business community believes that this will help support exporters, but the measures are not relevant for everyone – they also need a transparent mechanism for the distribution of preferences, as well as support for more expensive transportation.

On Thursday, the government approved and submitted to the State Duma a bill granting itself additional powers to set up export regulation. As Prime Minister Mikhail Mishustin explained, this is necessary to launch a “flexible instrument of tariff preferences” to stimulate the supply of grain, fertilizers and raw materials to friendly countries.

The project amends the law “On Customs Tariff”. According to it, on behalf of the president, the government can reduce export duty rates for up to six months when exporting goods to friendly countries and states with which “strategic trade, economic and political cooperation is intensively developing.” As an example, the head of government cited African countries.

The second proposed mechanism is the establishment of export tariff quotas for a period of up to one year, providing for a reduced or zero duty rate when exporting a certain amount of goods. This is called a measure to support producers in certain regions, namely the territories that are subject to sanctions (for example, Crimea) or whose geographic location, according to the prime minister, “requires a special approach” due to their remoteness from sales markets or centers for storage and processing of products . In the latter case, we are talking about regions where forced changes in logistics have led to an increase in transport costs and an increase in the cost of export deliveries.

Eduard Zernin, Chairman of the Board of the Union of Grain Exporters, does not expect this measure to be applied to grain exports in the foreseeable future. According to him, the existing discount in the price of Russian wheat to European competitors creates advantages for buyers and allows them to save on the purchase of basic agricultural products. Zeroing the duty in this situation, he believes, will only lead to an increase in the discount and a decrease in the income of the state and domestic agricultural producers.

According to Opora Rossii vice-president Nikolai Dunaev, “a good mechanism has been proposed that does not violate the general regime and creates a window of opportunity for Russian exporters to enter a particular market.” Taking into account the need to restructure technological processes for buyers who purchase goods from suppliers new to them, a discount is needed, which ensures the reduction or zeroing of duties. For example, the expert says, African countries have a huge need for petroleum products. Also, according to him, it is necessary “to give some regions the opportunity to compete” for the Philippines, Indonesia, Vietnam and Myanmar. This will make it possible to make deliveries more profitable for regions remote from export ports.

Artem Lylyk, a member of the General Council of Delovaya Rossiya, believes that reducing export duties can support suppliers, but this measure alone cannot be dispensed with – the main expense item now is logistics, since the cost of transporting goods in some directions has increased two to three times since last year. In his opinion, in order to increase exports, it is necessary, for example, to consider the possibility of increasing subsidies for the transportation of goods from Russia abroad. In addition, Nikolai Dunaev emphasizes that for the proposed mechanism to work properly, a mechanism must be created for transparent discussion with experts and businesses of the buyer countries of the list of regions and groups of goods that will be subject to preferences, for example, on the basis of the Export Coordinating Council under the REC and using export standard 2.0 in the regions.

Evgenia Kryuchkova, Anatoly Kostyrev