At Russia’s accession negotiations with the World Trade Organisation (WTO), the European Union and Russian Federation reached an agreement, which provides that the export customs duty, imposed on pine and spruce logs (until then, 25%) will be reduced within the limit of the tariff quota, established by the European Union, as of the date of accession.
According to the agreement, the reduced customs duty rates and tariff quota volumes will be as follows for the European Union:
- Pine 15% 3.645 million m³ (commodity codes 44032031, 44032039)
- Spruce 13% 5.960 million m³ (commodity codes 44032011, 44032019)
As Russia joined the WTO on 22 August 2012, transition measures will be applied over the three quota period (end of 2012, 2013 and 2014).
Tariff quota will be imposed by Russia for a calendar year and it has been divided into two components: traditional importers, who will be allocated 70% of the quota volume, and new importers, who will get 30% of the volume.
Traditional importers will be those who have imported spruce or pine or both from Russia in 2004 and/or 2007, both at least 5,000 m³.
Personal maximum quantity will be established for every traditional importer (the upper limit), which the latter can import during the first three quota periods of transition period.
Personal maximum limits have not been established for new importers; however, there is a maximum quantity of 1.5% of the tariff quota for every product group and the “first come, first served” quota allocation principle will be observed.
Exporting timber to the European Union
The status of traditional importer
According to Article 17 of the Commission Implementing Regulation (EU) No 498/2012 of 12 June 2012 on the allocation of tariff-rate quotas applying to exports of wood from the Russian Federation to the European Union, the importers claiming the status of traditional importer will be required to choose a reference period (2004, 2007 or a combination of both years) during the transition period (September-December 2012, 2013 and 2014).
The claim the status of traditional importer, the importer had to submit, by 3 July 2012, as latest, the information about the chosen reference period and real import data for the reference period concerned (indicating spruce and pine separately), to the Ministry of Economic Affairs and Communications.
After the regulation no. 498/2012 entered into force (17.08.2012), the Commission notified the Licence Office (in Estonia, the Ministry of Economic Affairs and Communications) of the ceilings, calculated as shown in Article 6, subsection (2) of the aforementioned regulation.
The tariff quota was opened on the date for Russia’s accession to the WTO and since then, all importers can submit applications for obtaining quota authorisation, on current bases. For that purpose they need to complete an appropriate application and send it, complete with all the required additional documents (contract or pre-contract, certificate specified in Annex II of the regulation no. 498/2012), signed according to the standard, to the Ministry of Economic Affairs and Communications.Read also:
O&A document on Commission Implementing Regulation No 498/2012
Transition period 2012-2014
Quota authorisation will be issued on paper and can’t be modified. If amendments of modifications will be required, however, the quota authorisation will be withdrawn and a new quota authorisation will be issued, suitably modified.
Importers can apply for quota authorisations for a specific quota period from 1 October of the calendar year, preceding the quota period, until 1 December of the current calendar year.
Every quota authorisation will be issued for the products, covered by the contract, concluded between the importer and the exporter, or for the quantity of goods, agreed upon in the preliminary contract.
The quota authorisation will be given to the name of the quota owner. Such authorisation shall be valid for import throughout the customs territory of the European Union during the quota period in general.The method for allocating tariff quota will depend on the date for the importer filing the application:
In the case of applications that are submitted by 31 July, every year, or during the first half of the quota period, the Commission will allocate the tariff quota depending on whether the importer is a traditional or new importer.
In the case of applications that are submitted, starting from 1 August or during the second half of the quota period, the Commission will allocate the outstanding tariff quota volumes in chronological order, as the notices of competent national authorities of the member states or Licence Offices on applications from single importers are received.
The quota, available to new importers, will be allocated in chronological order, as the notices of competent national authorities of the member states or Licence Offices on applications from such importers are received.
Every new importer will be allocated 1.5% of the tariff quota of each product group, as maximum.
During the second half of the quota period, each importer will be allocated 5% of the remaining tariff quota of each product group, as maximum.Reporting
No later than 15 calendar days after the end of each third month, the importers shall inform the Licence Office of the member state from which they received a quota authorisation of their actual imports of covered products into that member state during the last three months.
For that purpose, the importer shall provide the Licence Office with a copy of the customs declarations of the imports concerned.
Where the quantity recorded in the customs declaration is measured free of bark and the quantity mentioned in entry 9 of the quota authorisation form includes bark, the importer shall provide the Licence Office, in addition to the information provided in paragraph 1, and within the same time limit, with correct import quantities for each customs declaration, that take account of the bark. The correct quantities shall be established by application of the correction coefficients set out in Annex III to regulation no. 498/2012.Unused quota authorisations
Where a quota authorisation remains unused after six months of its issuing, the importer shall either return it to the Licence Office, or shall notify the Licence Office of its intention to use it within the remainder of the quota period. Where a quota authorisation has been issued before the beginning of the quota period, the six-month time limit shall be counted as from 1 January of the year corresponding to the quota period.
The Licence Offices shall immediately notify the Commission of any quota authorisation returned by importers in accordance with paragraph 1. The balance of traditional importer ceilings available for the product group concerned shall be modified for the corresponding amount.
Where the actual imports by a traditional importer of covered products during quota period n–1 are lesser than 85 % of the quantities covered by all quota authorisations granted to such importer during the same quota period, the importer’s import ceilings for both product groups during quota period n+1 shall be reduced by an amount proportional to the size of missing actual imports.
Where a quota authorisation that has not been returned after six months of its issuing remains unused at the end of quota period n–1, the importer’s import ceilings for both product groups during quota period n+1 shall be reduced by twice the amount proportional to the size of the unused quota authorisation.
Application for quota authorisation and affidavit
The granting of a quota authorisation shall be subject to the requirement that the corresponding products undergo processing, within the customs territory of the Union, conferring Union origin in accordance with Article 24 of Council Regulation (EEC) No 2913/92 (4).
Application for quota authorisation will be submitted separately for each product group (spruce and pine) and must be completed in capital letters.
Copy of a contract or preliminary contract that is concluded between the exporter and importer, indicating the agreed quantity of goods will be attached to the application.
Written testimony of the applicant will be attached to every application for quota authorisation, stating that the applicant will be required to:
Assign the products concerned to the prescribed processing within one year from the date on which the customs declaration for release for free circulation, containing the exact description of the goods and the TARIC codes, was accepted by the competent customs authorities.
Keep adequate records in the member state where the authorisation was granted enabling the Licence Office to carry out any checks which they consider necessary to ensure that the products are actually assigned to the prescribed processing, and to retain such records. For the purposes of this clause, “records” shall mean information, kept on any type of media, consisting of all the required information and technical details that will allow the Licence Authority to monitor and check the activities concerned.
Enable the Licence Office to trace the products concerned to their satisfaction in the premises of the undertaking concerned throughout their processing.
Notify the Licence Office of all factors which may affect the authorisation.
Where the products concerned are transferred, the applicant shall provide sufficient evidence of their assignment to the prescribed processing.
Non-compliance with the commitment referred to in paragraph 3 of this Article, by the importer or by any natural or legal person to whom the importer subsequently transfers such products, shall be considered as equivalent to an unused quota authorisation, for the relevant amount of products.
Submission of application
- On paper
The completed authorisation application must be set to the Register Division of the Ministry of Economic Affairs and Communications at 11 Harju Street, 15072 Tallinn.
- In an electronic form
Digitally signed application must be sent to the following e-mail address: info [at] mkm.ee.