WTO Okays Russian Ban on Ukrainian Wagons, Locomotives,others

The WTO recognized the unlimited ban on the import of locomotives and wagons from a neighboring state as justified

The World Trade Organization (WTO) Dispute Resolution Authority (ODS) has approved the February decision of the WTO appeals department on the dispute between Russia and Ukraine on the supply of Ukrainian railway equipment to the Russian Federation. 

An unlimited ban on the import of locomotives, wagons and railroad switches of Ukrainian production after years of disputes has been recognized as reasonable and continues to apply. 
“According to the results of the appeal filed by Ukraine, the decision of the arbitration group, essentially remained unchanged. All economically significant claims of Ukraine against the actions of the Russian certification bodies are recognized as unfounded, ”the website of the Ministry of Economic Development says.

 According to a press release from the Ministry of Economic Development, which represents Russia in the WTO, the ministry considers this a victory.

“Since the introduction of the ban, there have been no major deliveries from Ukraine, both wagons and components. Nevertheless, in my estimation, now Russian factories fully provide the necessary volumes of equipment. Ukrainian products will not be in high demand. Of course, Lugansk diesel locomotives from the time of the USSR are still running on the Russian Railways network, but there is no need for new equipment on the Russian market, ”said Vladimir Matyushin, vice president of the Association of Railway Equipment Manufacturers.

The vice-president of OPZhT was unable to estimate the number of rolling stock of Ukrainian production currently operating on the Russian network. However, he noted that most of the railway equipment that is still in operation is trunk diesel locomotives.

Recall that back in 2013, Russia imposed restrictions on the supply of Ukrainian cars of various types, locomotives, as well as railway components, in particular turnouts. The restrictions were introduced due to safety claims for Ukrainian-made railway equipment. In the period from 2008 to 2012, situations of vanishing were often observed due to the low quality of components – side frames and other castings.

 As Gudok previously wrote, the result of poor quality casting production is the decommissioning of wagons, their early scheduled repairs, during which low-quality side frames are replaced.

For example, in 2012, Azovmash OJSC decommissioned more than 4.5 thousand wagons due to inadequate quality of rolling stock components. 

A year earlier, 24 wagons collapsed in Kazakhstan due to a break in the side frame of a wagon manufactured by Krukovka Car Building Plant. Also in 2012, on the Uk-Kuryat East-Siberian railway line, in a freight train, a wagon (a specialized platform for transporting timber) collapsed, the cause of which was a break in the side frame produced by the Kremenchug Steel Plant in 2007. 

As Gudka previously informed the technical director of Pervaya Transportnaya Kompaniya LLC Aleksey Shukshin, the problem is not solved, even despite regular dialogues with the leaders of the car building plants.

A year after the introduction of the ban on the part of Russia, in 2014, the Russian certification authorities began to massively suspend previously issued certificates of conformity of Ukrainian manufacturers, as well as limited the issuance of new ones.

In turn, the Ukrainian side considered these measures unreasonable and in 2015 filed a lawsuit against Russia in the WTO. Natalya Nikolskaya, who held the post of Deputy Minister of Economic Development and Trade of Ukraine at a government briefing in October 2015, reported that Russia’s restrictions affected the largest manufacturers of railway equipment: Kryukovsky Carriage Works, Dnepropetrovsk Railroad Turnkey Plant, Azovzagalmash and Kharkiv Engineering factory.

As a result, in February 2020, the WTO appeals department sided with Russia, and in March the ODP approved this decision.

For Ukrainian car builders, the Russian market was the main export one. 

According to the Federal Customs Service of Russia, the cost of freight cars imported from Ukraine in 2013 was estimated at $ 1 billion, in 2014 decreased to $ 163 million, and in 2018 to $ 27.4 million.

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