Yesterday, the Eurasian Economic Commission issued a resolution which limits the supplies of certain types of specialised steel pipe from Europe, Ukraine, Asia and other counties into Russia to an annual quota of 23,600 tonnes. The resolution is to come into effect immediately and last until 1 November 2014.
The new resolution replaces the previous decision of the Customs Union Commission, which set an extra 9.9% import duty for certain types of pipe and was abolished upon Russia’s entry into the WTO. The newly introduced import quotas are to provide Russia’s pipe industry with the necessary transition period. We note that it covers only a small portion of pipes (in 2011, a total of 1.7mn tonnes of pipes was imported into Russia). However, it creates an important precedent and, in our view, could be used for other types of pipe as well. This largely addresses investors’ concerns over the negative effect of WTO accession on Russian pipe producers.
VTB Capital analyst
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