Japan to withdraw preferential treatment in trade with Russia and introduce new sanctions

Japan will deprive Russia of the most favored nation treatment in trade due to the situation in Ukraine, Prime Minister Fumio Kishida announced, reports Japan Times. Earlier, the NHK TV channel reported that such a decision had been made.

Kishida also said that Tokyo would expand sanctions against Russia: it would ban the export of luxury goods, the import of certain categories of Russian goods to Japan, freeze the assets of the Russian elite, and also make sure that Moscow would not be able to use digital currencies to circumvent sanctions, Reuters reports.

Most favored nation treatment is a key principle of the World Trade Organization (WTO), which implies that when trading with a particular state, countries enjoy the same benefits and privileges. For example, if one country imposes a 3% customs duty on imports of sawn timber from another country, the tariff for all other Members importing sawn timber into that country should also be set at 3%. The absence of this status means that any customs duties can be set for the country. The norms of the World Trade Organization (WTO) do not provide for the direct possibility of exclusion of a country from the organization, but do not prohibit the withdrawal of the most favored nation treatment.

A spokesman for the Japanese Ministry of Finance told the Japan Times that it has not yet been determined when the most favored nation treatment will be lifted and what goods will be subject to increased customs duties.