Russian exports of vodka into the European Union could be subject to high punitive tariffs, if a trade dispute over Russia's own restrictions on EU alcohol exports is not solved.

The European Commission has asked ministers in Brussels to get tough with Russia over its imposition of restrictions on EU alcohol imports, which Brussels claims breaks an existing bi-lateral Partnership and Co-operation Agreement signed with the EU.

In a document written for ministers, the Commission "proposes that
proportionate measures be taken to introduce a punitive tariff on imports into the community of vodka and undenatured ethyl alcohol of an alcoholic strength by volume of 80% volume or higher," affecting a trade whose volume exceeds Euro 12.2m ($10.7m)per year.

The Commission report said: "Regulation of the market in alcoholic beverages has repeatedly infringed...the Partnership and Cooperation Agreement" that had been agreed between Moscow and Brussels. The report said that Brussels officials had "repeatedly drawn attention" to the problem in discussions with Russian ministries.

It claimed that the restrictions have contributed to a slump in EU alcohol exports to Russia, which have fallen from Euro 478m in 1994 to Euro 66m last year.

Problems cited by the report include a Russian law imposing discriminatory license fees on importers and traders of foreign-made alcohol and another law creating restrictive import quotas on strong alcohol brands. The same law insists that accredited importers must import at least 50,000 decalitres of pure alcohol, which the Commission claims breaks WTO trade rules.

In a draft letter to the chairman of the EU-Russia cooperation council, the Commission complained: "In contrast to the constructive approach adopted by the European Union in attempting to meet Russian trade concerns in recent years, the Russian Federation has addressed little attention to EU concerns."