The Australian Government has announced that from 25 April 2022 it will impose an additional tariff of 35 per cent to all imports from Russia and Belarus, on top of existing 5% general duty rates. This means businesses sourcing goods in Russia or Belarus could face a tariff on their imports of up to a 40 per cent, absent any form of duty relief. A previously announced ban on the importation of oil, refined petroleum products, natural gas, coal and other energy products will also come into effect that same day.
On April 1, Australia will issue a formal notification withdrawing Russia’s and Belarus’ Most-Favoured Nation status. The consequence is the countries’ will no longer be afforded equal trading terms to other partner countries of the World Trade Organization (WTO). This step by the Australian Government is in line with similar trade action taken by other like-minded countries, who were the signatories of the joint statement published at the WTO on 15 March condemning Russia’s invasion of Ukraine.
Outlook
It is unlikely that these tariffs will be rolled back anytime soon, and foreseeable that the Russian Government will impose retaliatory tariffs. The extent to which other key trading nation’s such as China, which has yet to make clear its response to Russia's invasion of Ukraine or the WTO actions, means this is definitely a case of ‘watch this space’ as the uncertain and disruptive state of international supply chains continues into 2022.
Take Action
In the immediate term:
- Consider the impact on your imports which are currently enroute to Australia from either country and assess whether any forms of duty relief may apply
- Review denied party screening lists to ensure they are updated regularly and capture the imposed Magnitsky sanctions that have been introduced
In the short term:
- Consider alternative sources of supply where possible and start the conversation now with current and potential suppliers and your supply chain and logistics teams to understand the full landed cost implications of comparators.
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