Restrictions on trade with Russia and Belarus

Effective March 2, 2002, goods originating in Russia and Belarus are denied Most Favoured Nation (MFN) treatment on importation to Canada, leaving them subject to the 35% General Tariff rate. The only other country with this infamous distinction is North Korea.

It is important to note that the 35% tariff applies to goods that “originate” in Russia or Belarus – in general terms. where they are manufactured. Such goods retain their Russian or Belarusian origin status if they are exported to Canada from another country.

The meaning of the term originate is discussed in an article elsewhere on this website. The duty to take reasonable care that the country of origin is correctly declared on the customs documents rests with the importer. You cannot simply rely on a statement from the exporter.

On the same day, Canada prohibited the export and import of goods to or from the so-called Donetsk People’s Republic and Luhansk People’s Republic and the areas of eastern Ukraine that they control. A similar ban has been in place for the Crimea region for some time.

These trade restrictions form part of a series of sanctions applied by Canada both before and after Russia’s invasion of Ukraine on February 24, 2022. A full list of the sanctions can be found on Global Affairs Canada’s website, separately for Russia and Belarus.

Background

MFN is the key privilege of being part of the World Trade Organization. Each member agrees apply the same basic tariff schedule to all of the other 163. Canada was an original member of the predecessor General Agreement on Tariffs and Trade (GATT) in 1947. Russia joined the WTO in 2012 after 19 years of negotiations following the disintegration of the Soviet Union.

Canada is one of many countries that have revoked Russia’s MFN status under the WTO’s national security exceptions, which allow a country to take “any action which it considers necessary for the protection of its essential security interests.” The implications of this action on trade with Russia are different for every country.

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