The European Union (EU) on Thursday requested the establishment of a dispute settlement panel at the World Trade Organization (WTO) to rule on the legality of the "recycling fee" which Russia imposes on imported vehicles.
This is the next step under WTO litigation procedures, after the EU has held formal consultations with Russia in July this year, the European Commission said in a statement on its website.
The fee, which the EU considers as discriminatory, has a "severe impact" on EU vehicle exports to Russia, worth 10 billion euros (about 13.5 billion U.S. dollars) a year, the Commission said.
The EU said it sent the request after failing to solve the issue through discussions in bilateral talks with Russia and in formal WTO consultations.
"We've used all the possible avenues to find with Russia a mutually acceptable solution", said EU Trade Commissioner Karel De Gucht.
"As the fee continues to severely hamper exports of a sector that is key for Europe's economy, we are left with no choice but to ask for a WTO ruling to ensure Russia complies with its international obligations," he added.
An official of Russia's Economy Ministry was quoted by a Russian news agency that "it was disappointed the EU had gone to arbitration."
"We have expressed our serious disappointment at this decision. We are puzzled and don't understand it," Maxim Medvedkov, head of the ministry's trade department, told Interfax news agency.
Medvedkov said Russia had hoped to resolve the dispute through consultations, but that the EU had ignored its proposals.
The WTO Dispute Settlement Body (DSB) will discuss the EU's request for the establishment of a panel when it meets on Oct. 22, 2013. At that meeting, Russia has the right to object to the establishment of the panel.
But if the EU raises the issue again at the following DSB meeting in November, Russia will be unable to block the request for a second time, said the European Commission.