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Eugene Gerden

Expert Opinion

29th August 2013, UK

Russia to increase import duty on synthetic fibres and technical fabrics?

Eugene Gerden reports

The Russian government is to conduct a special investigation into imports of fabrics made from synthetic fibres within the territory of the Customs Union of Russia, Kazakhstan and Belarus.

The investigation is the result of recent calls from Russia’s leading producers of synthetic fibres and technical fabrics, including Baltex, Detskaya Odezhda, Don-Tex Kursk plant of Technical Fabrics, Mogotex, Tchaikovsky Textile Company and others.

According to the producers there is a need to impose a special protective measure, in regard to imports of synthetic fibres and technical fabrics into the territory after the results of a recent study, conducted by the Eurasian Economic Commission, an executive body of the Customs Union, demonstrated a significant increase of imports of synthetic fibres and technical fabrics into the territory at dumped prices in recent years, which has negatively affected local producers of these products.

It is planned that the decision of the imposition of new customs duty may be taken by 1 October. The investigation will be headed by Denis Manturov, Russia’s Minister of Industry and Trade.

According to the study, Russian production of synthetic fibres and technical fabrics has decreased by almost 50% during the period from 2000-2012, while in Kazakhstan it has completely ceased, mainly due to the influx of cheap imports.

In addition, the share of domestic goods in the Customs Union market since 2011 has declined from 13.8% to 8%.

According to Russian producers, prices for imports of synthetic fibres and technical fabrics from China, Turkey and Pakistan are currently almost three times lower than for their Russian equivalents. As a result, domestic production currently remains unprofitable, with many industry enterprises operating at 30%-50% of their capacities, or even standing idle.

According to Nadezhda Samojlenko, the first vice-president of the Russian Union of Entrepreneurs of Textile & Light Industry, there is a need to conduct a special investigation, which should evaluate the effects of dumped imports on Russian synthetic fibres and technical fabrics industry and to take relevant measures.

“Many industry enterprises are currently on the brink of closure, which results in a decline of the industry’s deductions to the state budget in the form of taxes and the loss of experienced qualified personnel,” Nadezhda Samojlenko commented.

As a result of a recent meeting, the producers have agreed to submit an application to the Russian government, asking it to take measures to support the industry and create conditions for the reduction of dumped imports.

According to producers, there is a need to impose additional customs duty at the rate of 50% for the imports of synthetic fibres and technical fabrics within the territory of the Customs Union for a period of four years. Such a measure, according to producers, will allow a significant reduction in the volume of imports and stimulate domestic producers, which in recent years have heavily invested in their development and modernization and are currently bearing huge losses.

In the meantime, according to an official representative of the Russian Ministry of Trade, the government has already received the petition of the producers and has started an investigation, the results of which will be announced during the next few weeks. It is planned that the decision of the imposition of new customs duty may be taken by 1st October of the current year. The investigation will be headed by Denis Manturov, Russia’s Minister of Industry & Trade.

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