Engineering Companies’ experiences in doing business in and with Russia - Input for the EU-Russia Regulatory Dialogue

Published: 1 August 2007

Policies & Issues: Trade

Over 29.1 billion euro of products manufactured by our industry in the EU 27 were exported to Russia in 2006.  Our industry, which is both a major exporter and investor in Russia, is therefore extremely sensitive to unnecessarily bureaucratic trading conditions and regulations that hinder the free flow of trade between our economies.  Orgalime fully supports the ongoing work undertaken by the European Commission and their Russian counterparts in various political and technical meetings and dialogues.  It is with the view of further eliminating trading obstacles that we provide the attached position paper in which we explain in detail the concerns of our companies and put forward some ideas for resolving these problems.

The major obstacles for foreign companies doing business in Russia are not necessarily formal import or export restrictions, but rather legal uncertainty and the poor enforcement of legislation by a slow and seemingly under-staffed bureaucracy.  Russian certification procedures, rather than being a trade barrier that could be formally addressed, seem to give rise to enormous administrative burdens for importers; many companies in the end seem to obtain necessary import certificates if they are prepared to invest time and money.  European companies furthermore experience problems recovering the local VAT of 18%, which puts them at a competitive disadvantage vis-à-vis Russian producers.

Finally, we also urge the Commission not to impose any trade restrictive measures on Russian steel but to engage in an open trade policy that ensures reliable and timely supplies of steel from Russia.

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