Russia will not bow to the demands of WTO member countries and fully abolish customs tariffs on imported medicines, according to Andrei Kushirenko, the head of the Ministry for Economic Development's Tariff Department. Kushirenko was speaking today at a seminar entitled 'Russia - WTO: its effect on the pharmaceutical market.
Kushirenko explained that the WTO is demanding that Russia fully abolish customs duties on all medicines imported into Russia. However, he said that Russia would not take such a risky step: 39% of the federal budget is made up of income from customs duties. 'In such circumstances it is very difficult to talk about abolishing duties. Our customs duties play and will continue to play a major role in tax collection,' he added.
Nevertheless, Kushirenko stressed that Russia would be prepared to be flexible on reducing import tariffs for medicines in the future. It has proposed not reducing customs duty on pharmaceutical products that currently are subject to a 5% rate. Medicines that are currently subject to a rate of 10-12% would see that figure fall to 6.5%.
Other sectors of the domestic pharmaceutical industry will also face serious changes. Kushirenko said that the domestic market for alternative medicines (herbs, infusions) would be almost completely destroyed once import tariffs were reduced on foreign equivalents. However, the government is planning to introduce a number of measures to support manufacturers of these products, as well as measures to protect other domestic manufacturers.
Tatiana Monegen, the general secretary of the Russian National Committee of the International Chamber of Commerce, expressed the fear that after entry into the WTO, the weakness of Russian legislation would mean that Russia would become 'a testing ground for uncertified medicines.' 'International statistics show that one third of medicines produced are counterfeit,' she said.
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