Review of import barriers fraught with difficulties (405 words)

Published: 8/10/2001

Yury Koptev, General Director of the Russian Aerospace Agency (RAKA), is reported to be against any decrease in custom duties on leased foreign aircraft imported into Russia. His comments were made after the agency, along with the Ministry of Transport, were mandated to review the current to report and make recommendations on the current tariff system within the next two months. According to Koptev, the agreement recently signed by the government, which let Aeroflot off the duty on the aircraft that had already been leased, was motivated purely by the fact that the payment of the duties would have bankrupted the national carrier. As for new aircraft, particularly the much rumoured leasing of a large number of Airbuses, during a visit by the French President to Russia, Koptev claims he is not aware of the possibility of such a contract. He added that he is not against Aeroflot leasing foreign aircraft, but believes that it should be a level playing field and that Aeroflot, therefore, should pay both the duty and the VAT, in common with others. Koptev's views follow similar comments from the larger producers in the last couple of weeks, but none have sought for the barriers to be strengthened. They have simply stated that, if Aeroflot doesn't pay, then other producers or operators should not have to, either. The conundrum for both Koptev and the producers is that the duties are applied on all aerospace equipment: increasingly a component in its own products and an essential element in making them internationally competitive. The issue for Koptev is consequently a difficult course to steer. Koptev said that, on 13th August, the first meeting of body would take place, to examine the tenders for leasing. He confirmed that the winners of the tender - potentially five companies - would receive government backing and that the state's guarantees will be in the 2002 budget and will be discussed and approved by Duma at a later date. As a result of the leasing structures, Koptev said that he expects MAKS to be marked with both discussions and agreements to acquire the Il-96-300 and Tu-204/214, with a prediction that an initial agreement could be struck on as many as 20 aircraft. Koptev claimed that MAKS would involve 525 companies: a 30% increase on two years ago, including 110 companies from 33 countries.

Article ID: 2697