EUROPEAN UNION TO PROTEST NEW RUSSIAN TRANSPORT TAX.

A row is brewing between Moscow and the European Union over a decision by the Russian Duma to charge a $10 duty for every crossing of the Russian border by an individual or consignment of goods. The decision takes the form of amendments to the law on the state border and is expected to be implemented within 4 to 8 weeks. Certain categories of people will be exempt from the duty, including civil servants on official business, World War II veterans, and CIS residents crossing borders inside the CIS. Russian citizens leaving or entering the country from a non-CIS country will not however be exempt. Aircraft, trains, trucks and cars will be taxed according to the number of passengers and amount of cargo, with a rate of $180 on all trucks. (Itar-Tass, December 11; Financial Times, December 12)

The European Commission has instructed its ambassador in Moscow to make a formal complaint to the Russian government. The Commission says the new duty "goes against the spirit" of the interim agreement on trade signed between the EU and Russia last summer. It will also harm Russian exporters, the Commission points out.

The duty will be levied by Russia’s border troops and will help to finance their work. The border troops will also be allowed to keep 25 percent of the value of any contraband seized at the border. Clearly, the system will be wide open to abuse.

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