Russian prime minister Mikhail Fradkov has agreed in principle to cut import duties on auto components to as little as 0%, from 13%, Alexei Kaulbars, the government’s foreign trade regulation and customs department director, told the Prime-Tass news agency on Thursday.
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The move reportedly is designed to encourage foreign auto makers to begin producing in Russia, and follows a bill prepared in late 2004 by the Economic Development and Trade Ministry. According to the Gazeta newspaper, that bill envisaged duties on most types of auto components would be reduced to zero, although some would be cut only to between 3% and 5%.
One issue unresolved is the definition of what constitutes “industrial assembly”. Kaulbars told Prime-Tass the term has been defined in general. On Wednesday, another official said its precise definition requires more work to make clear which vehicle parts should be included in the term.
Earlier this week, Prime-Tass noted, Gazeta reported the ruling would be made on condition that foreign auto makers operating in Russia localise the production of 50% of the component parts for their vehicles within five years.
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