VZCZCXRO9994
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSR RUEHYG
DE RUEHVK #0130/01 3310853
ZNR UUUUU ZZH
R 260853Z NOV 08
FM AMCONSUL VLADIVOSTOK
TO RUEHC/SECSTATE WASHDC 1050
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHLN/AMCONSUL ST PETERSBURG 0209
RUEHYG/AMCONSUL YEKATERINBURG 0214
RUEHVK/AMCONSUL VLADIVOSTOK 1147

UNCLAS SECTION 01 OF 02 VLADIVOSTOK 000130 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON RS
SUBJECT: PRO-RIGHT HAND DRIVE RALLIES TAKE PLACE THROUGHOUT EASTERN 
RUSSIA 
 
VLADIVOSTO 00000130  001.2 OF 002 
 
 
Summary 
------- 
 
¶1.  On November 22, demonstrators throughout the Russian Far 
East (RFE) staged rallies to protest the National Duma's 
proposal to ban the import and limit the use of right-hand drive 
vehicles from Japan.  The largest demonstration -- which took 
place in Vladivostok -- attracted seven thousand participants 
including the Mayor and blocked traffic for much of the day. 
The proposal to ban the import of used cars older than five 
years and to increase customs duties for all foreign second-hand 
cars by 30 per cent would make used cars from Japan -- which 
make up 90 percent of passenger vehicles in the Russian Far East 
and 60-80 percent in Siberia -- as much as USD 3,000 more 
expensive.  The Duma justifies the measure as necessary for 
supporting domestic automobile producers and dealers. 
 
Demonstrations Throughout Eastern Russia 
---------------------------------------- 
 
¶2.  Demonstrators throughout the Russian Far East and parts of 
Siberia staged rallies to protest a proposal put forward in 
October by the National Duma's Tariff and Customs Committee to 
ban the import of used cars older than five years and to 
increase customs duties for all foreign second-hand cars by 30 
per cent.  Though it applies to all foreign cars regardless of 
country of origin, the measure most severely impacts cars from 
Japan and has the greatest detrimental effect on residents of 
eastern Russia. 
 
¶3.  The new measure would make the Japanese cars -- much 
preferred by Far East Residents -- as much as USD 3,000 more 
expensive.  Over 90 percent of passenger vehicles in most cities 
in the Russian Far East are imported used cars from Japan. 
Residents of the region prefer the imports because they are less 
expensive and considered of higher quality than other cars 
available locally.  In Vladivostok, for example, there are so 
many right-hand drive vehicles that parking facilities place 
their ticket dispensers on the right hand side of lot entrances. 
 The Duma justifies the measure as necessary for supporting 
domestic automobile producers and dealers.  The federal 
government rescinded a similar proposal in 2005 after automobile 
owners and dealers in dozens of cities staged demonstrations 
against it. 
 
¶4.  The Vladivostok rally attracted seven thousand participants 
and blocked traffic for several hours.  Vladivostok Mayor Igor 
Pushkaryov and city Duma Deputy Dmitry Penyaz, who supported the 
protests, assured the demonstrators that the petition signed by 
angry automobile owners will be delivered to President Dmitriy 
Medvedev.  Pushkaryov even signed the petition.  Similar actions 
took place in other cities of the Russian Far East and Siberia, 
including Khabarovsk, Petropavlovsk-Kamchatskiy, Barnaul, 
Novosibirsk, as well as St. Petersburg and Moscow.  In Nakhodka 
more than 1,000 drivers staged a mock funeral for the right-hand 
drive and carried a coffin along the main city street.  In 
Khabarovsk, 300 motorists gathered on the central square to sign 
a petition and delivered it to Polpred Oleg Safonov's office. 
Petropavlovsk-Kamchatskiy did not grant a permit for a 
demonstration, and authorities ordered traffic police to patrol 
the city streets and disperse groups of potential protesters. 
 
¶5.  Though the Vladivostok Mayor and City Duma are in support of 
the protesters, the Krai leadership has been notably silent on 
the matter.  No Primorye Duma members appeared at the rally, and 
TV reporters and journalists representing federal media were 
absent, reportedly after being advised by authorities not to 
cover the event.  As a result, there was only a five second spot 
shown on regional news that day. 
 
Just the Latest Import Restriction 
---------------------------------- 
 
¶6.  The latest proposal, which will be voted on in December, 
comes after a series of import restrictions implemented starting 
in the late 1990's.  The most recent regulation closed a 
loophole which allowed inexpensive 'konstructor' automobiles. 
Many importers hoping to reduce import customs bought used cars 
in Japan, disassembled them there or on the ship on the way to 
Vladivostok, and imported them as parts.  After clearing 
customs, importers would then reassemble the parts and save 
approximately USD 2,000 on import fees.  Recently increased 
tariffs on car bodies, however, made the process less 
profitable.  Authorities had initially banned the import of cars 
over seven years old, then reduced the age to five years. 
 
Comment 
------- 
 
 
VLADIVOSTO 00000130  002.2 OF 002 
 
 
¶7.  Although several such bans have been proposed in the past, 
the RFE has so far been granted extensions allowing continued 
use of right-hand-drive vehicles.  Residents of the Russian Far 
East have expressed disappointment with the federal government, 
which on one hand develops grandiose development strategies for 
the region, yet continues to pass resolutions which make life 
for residents here more inconvenient and expensive.  Though 
residents do not often take to the streets in political protest, 
they have shown that they are willing to take a stand against 
initiatives that affect their economic interests.  The issue of 
imported cars highlights a practical issue which hinders 
region/center relations.  Though Moscow talks about increasing 
trade with Asia, and highlights the advantages of the Far East's 
proximity to Asia, this proposal would dampen RFE-Asia trade. 
Of the various import-restricting measures to be discussed in 
the Duma in December, an outright ban of Japanese second-hand 
imports is unlikely, though the continued, yet gradual, 
restriction of Japanese automobiles will likely continue. 
ARMBRUSTER