RF Government Has Extended the Import Zero Rate Effect for Imports of Natural Rubber

The RF Government Decree No. 932 as of November 16, 2009 has re-approved for a period of nine months the zero rate for import duties on the following grades of natural rubber used in a large volume manufacturing of the tire products: Code ТN VED Russia 4001 22 000 0 - natural rubber, specified (TSNR); Code ТN VED Russia 4001 29 000 0 - other natural rubber in other forms.

Before January 2009, the import duty for these products was 5%. Decree number 936 on the introduction of a temporary zero rate for natural rubber came into force on January 2009 for the term of nine months.

The issue of extending the zero rate for the import customs duties on natural rubber was initiated by “SIBUR - Russian Tires” JSC, the largest tire manufacturer in Eastern Europe with the total sales of more than USD 1 billion. Cost reduction for natural rubber is particularly important in the production of modern truck tires SMC (with solid-metal cord), where its share is more than 40%.

In January-August production of tires for trucks has declined by 40% against the relevant period of 2008. Exports of truck tires have decreased by 14.9%.

The economic effect of the abolition of customs duties on natural rubber can help the domestic tire and rubber industry to gain from RUR 55 to RUR70 million in 2010 with a subsequent 2-3 times growth within the few forthcoming years.

N.P. Volovik, Head of External Economic Activity Laboratory