Russia - Trade BarriersRussia – Trade Barriers
U.S. companies face a number of tariff and non-tariff trade barriers when exporting to Russia. For example, importers of alcoholic products confront a long-standing requirement that all customs duties, excise taxes, and value-added taxes on alcohol be paid in advance using a bank guarantee and deposit, in which the reimbursement process if very slow. U.S. industry is concerned that the assessment and licensing procedures administered by different Russian government agencies and the EEC (Eurasian Economic Commission) add an unnecessary level of complexity leading to increased costs and delays.
U.S. food and agricultural exports were banned in the Russian Federation after the Crimean peninsula was annexed in 2014.
U.S. companies also cite technical regulations and related product testing and certification requirements as major obstacles to U.S. exports to Russia. Russian authorities require product testing and certification as key elements of the product approval process for a variety of products, and only an entity registered and residing in Russia can apply for the necessary documentation for those product approvals. Consequently, opportunities for testing and certification performed by competent bodies outside Russia are limited. For example, U.S. companies have observed that the procedures associated with Russia’s requirement to have a “supplier’s declaration of conformity” are unnecessarily burdensome. This document is meant to confirm the safety of products for the environment and the health of people and animals. Manufacturers of telecommunications equipment, oil and gas equipment, and construction materials and equipment, in particular, have reported serious difficulties in obtaining product approvals within Russia. Other member countries of the EAEU are in the process of adopting a similar system.
Laws in the information technology (IT) sector have made it more difficult for U.S. technology companies to provide goods and services in the Russian market. For example, Russian Government Resolution No. 1236, in effect since the start of 2016, requires Russian government agencies to give priority to Russian software based on a registry published and updated by the Russian Communications Ministry. Under the new law, government agencies may only buy foreign software when a suitable domestic substitute is not available. Moreover, on July 21, 2014, President Putin signed the Personal Data Localization Law 242-FZ that requires companies to store personal data of Russian citizens only on servers physically located within Russia. This law made it more difficult for companies to select cloud based IT solutions. After this Law entered into force on September 1, 2015, the Russian Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications (ROSKOMNADZOR) can fine companies which violate the law and restrict access to their websites. The Russian Ministry of Communications later published explanatory notes about the law at this link >> :
President Vladimir Putin signed the Yarovaya package of anti-terrorism amendments, which include provisions requiring telecommunication service providers to furnish encryption keys to law enforcement agencies upon request. Effective July 1, 2018, the Yarovaya amendments also mandate that domestic telecoms and Internet service providers (ISPs) to store all customers’ telephonic and electronic content for six months. It also mandates ISPs to keep records of all transmitted communications for one year and telecoms for three years.
New regulations in the auto and aviation sectors could make it more difficult to sell U.S. products in this Russia. For example, Russia developed a global navigation positioning technology called Global Navigation Satellite System (GLONASS) as an alternative to the U.S. Global Positioning System (GPS) system. Russia’s Ministry of Transport issued a rule in March 2012 requiring that GLONASS compatible satellite navigation equipment must be installed on all Russian-manufactured aircraft, with varying deadlines depending on the use, age, and size of the aircraft, but on all aircraft no later than January 2016. In addition, any foreign-manufactured aircraft listed in a Russian airline’s Air Operator Certificate must have GLONASS or GLONASS/GPS compatible satellite navigation equipment installed by January 1, 2018 or earlier, depending on the size of the aircraft. Since U.S. aircraft are not currently configured for GLONASS, modifications to the aircraft would be necessary to meet this new rule. The same issue is applies to cars imported into the Russian Federation. All the vehicles both new and used that are imported should be equipped with a GLONASS system . Any vehicle without a GLONASS equipment cannot be imported into Russia. This amendmented was enacted in the TR TS 018-2011 regulation on the January 1, 2017.
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Russia Trade Barriers