Brussels, 22 March 2024
The European Commission is today proposing to increase the tariffs on imports into the EU of cereals, oilseeds, and derived products (‘grain products’) from Russia and Belarus, including wheat, maize, and sunflower meal. These tariffs, while high enough to suppress such imports into the EU in practice, would not affect exports to third countries.
The measures are designed to achieve several objectives:
- to prevent EU market destabilisation through any future significant redirection of Russian grain products onto the EU market. The EU farming community has, in particular, expressed concerns about this risk – Russia’s role as a leading global grain exporter, coupled with its willingness to use food exports as a geopolitical tool, shows that it is high.
- to tackle Russian exports of illegally appropriated grain produced in the territories of Ukraine, some of which has been illegally exported to the EU market deliberately mislabelled as ‘Russian’. The tariffs proposed today will ensure that this illicit export method is no longer profitable.
- to prevent Russia from using revenues from exports to the EU – of both Russian and illegally appropriated Ukrainian grain products – to fund its war of aggression against Ukraine. As Russia exported some 1.3 billion euros’ worth of such products to the EU in 2023, these EU tariffs will cut off another important source of profit for the Russian economy and, by extension, the Russian war machine.
European Commission President, Ursula von der Leyen, said:
“We propose the imposition of tariffs on these Russian imports to mitigate the growing risk to our markets and our farmers. They will reduce Russia’s capacity to exploit the EU for the benefit of its war machine. And we maintain our commitment to preserving global food security, especially for developing countries. We are striking the right balance between supporting our economy and farming communities. At the same time, we maintain our unyielding support for Ukraine. “
The increased tariffs would also apply to Belarus in light of the country’s close political and economic ties to Russia. Moreover, by including Belarus in the new measure, the EU will prevent Russia from using Belarus to circumvent the new tariffs and channel its goods onto the EU market.
The transit of cereals, oilseeds and derived products from Russia and Belarus to third countries is unaffected by today’s proposal. This shows that the European Union remains fully committed to promoting food security globally, especially when it comes to developing countries.
More than two years after the start of Russia’s full-scale war of aggression against Ukraine, Europe is united and determined to continue defending our values and founding principles. The EU stands firmly with Ukraine and its people, and will continue to strongly support Ukraine’s economy, as well as its society, armed forces, and future reconstruction, for as long as it takes.
Next steps
The proposal will now be considered by the Council of the European Union. Once adopted by the Council, the tariffs will immediately be applied.
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Quotes
Today’s proposal is a timely and necessary step: Russian and Belarussian grain and grain-related products have until now been able to enter the EU market with low or no customs duties and we saw these imports rise considerably in 2023. Our proposed prohibitive tariffs will make imports of these products commercially unviable, thereby also preventing possible future surges that could destabilise the EU food market. It will also help put a stop to the Russian practice of illegally exporting stolen Ukrainian grain into the EU. We have been careful to uphold global food security: this measure will not affect the transit of Russian and Belarussian grain products to third countries. Last but not least, today’s proposal will choke off another important source of revenue for the Russian government to fund its illegal war of aggression against Ukraine.
We propose the imposition of tariffs on these Russian imports to mitigate the growing risk to our markets and our farmers. They will reduce Russia’s capacity to exploit the EU for the benefit of its war machine. And we maintain our commitment to preserving global food security, especially for developing countries. We are striking the right balance between supporting our economy and farming communities. At the same time, we maintain our unyielding support for Ukraine.
Q&A: Proposed tariffs on grain imports from Russia and Belarus
How high will the tariffs be? Which goods will be affected?
The increased duties will apply to imports of cereals, oilseeds and derived products from Russia and Belarus that are currently classified under Chapters 10, 12, 14, 15 and 23 of the Combined Nomenclature (CN).
The new tariffs are designed to be high enough to discourage current imports. Depending on the specific product, they will increase to either €95 per tonne, or to an ad valorem duty of 50%. In addition, Russia and Belarus will no longer have access to any of the EU’s WTO quotas on grain that offer better tariff treatment for some products.
Why use tariffs instead of sanctions?
In practical terms, the tariffs in this case achieve the same result in the EU domestic market for grain as sanctions would: namely, limiting access to the EU market and denying Russia export revenue. This is due to the tariffs being so high that they effectively supress Russian exports to the EU.
The difference is that, unlike the import and other bans adopted in the EU’s sanctions regime, the imposition of import tariffs does not affect in any way purchases, transportation, or the provision of ancillary services such as financing, insurance, or transport. This means that the proposed increased tariffs will continue to allow for:
- unhindered transit through the EU;
- free buying and selling operations of Russian grain;
- storage in EU customs warehouses;
- transportation on EU vessels; and
- the provision of insurance and financing services to trading of Russian grain.
Importantly, the proposed tariffs will therefore not affect global food security, particularly for developing countries. On the contrary, they are expected to create an incentive for Russia to export to non-EU destination markets, including developing countries.
What is the latest agri-trade data available for Russian agricultural exports to the EU? How does it compare with the EU’s overall imports?
Russia exported 4.2 million tonnes of cereals, oilseeds, and derived products to the EU in 2023, worth €1.3 billion.
Belarus exports limited quantities of cereals, oilseeds, and derived products to the EU in 2023 – 610 000 tonnes, with a value of €246 million.
Considering all trading partners, in 2023 the EU imported 37.2 million tonnes of cereals and 39.1 million tonnes of oilseed products, compared to 21.7 and 39.6 million tonnes respectively in 2021. The EU prices for those products have been considerably and progressively falling since the second half of 2022, when prices hit record levels as a result of the food crisis created by Russia’s aggression against Ukraine.
However, it must be noted that imports to the EU remain a fairly small piece of the overall supply picture for these products, with domestic suppliers furnishing 300 million tonnes per year, i.e. an overwhelming majority.
Do you expect an increase of imports of these commodities from Ukraine?
The proposed measures would result in reduced EU imports of grain from Russia and Belarus of close to 5 million tonnes per year. This shortfall in supply will be filled partially by EU’s domestic production and, therefore, benefit EU farmers who will be able to sell in the EU. In addition, the shortfall is expected to be partially filled by imports from third countries which traditionally supply the EU market such as the U.S., Brazil, Ukraine, Serbia, or Argentina.
Why have you not proposed increased tariffs on Russian grain before?
Changing circumstances and a change of perceived risks call for an adjustment of the EU’s policy. There is now a higher risk that Russia uses its exports of grain products to create disturbances in the EU market. As Russia’s grain surplus increases, partially due to illegally seized Ukrainian grain, and its ability to sell to world markets has been negatively impacted by Ukraine gradually regaining access to world markets, there is a greater risk that the EU market could become a destination for growing Russian surpluses.
The EU farming community in particular has expressed concerns about the risk of market destabilisation, as have a growing number of EU Member States.
The European Union imposed extensive sanctions against Russia immediately after its full-scale invasion of Ukraine began, but agrifood products have not been sanctioned so far.
This was done in order to support global food security, with the EU ensuring that its restrictive measures did not affect the ability of Russia to supply the world with needed grain products, including from trading operations of Russian grain from within and transiting via EU territory.
This ability will not be affected by the proposed imposition of tariffs.
Why is Belarus also targeted by these tariffs?
Belarus has very strong political and economic ties with Russia and is supporting the latter’s invasion of Ukraine, including militarily. Not including Belarus in the proposed increased tariffs aimed at Russia could result in Russia using Belarus to circumvent the EU’s tariffs to channel its goods onto the EU market.