Brussels, 26/10/2009 (Agence Europe) - Finnish Prime Minister Matti Vanhanen suggested on Sunday 25 October that Finland would, before the end of the year, agree to the NordStream gas pipeline, a project led by Russian Gas group Gazprom (see related article), passing through its territorial waters in the Baltic Sea. In exchange, Russia would keep in place its differentiated export duties on Russian timber, vital for the Finnish timber industry and also for Russia's WTO accession negotiations. Meeting his Finnish counterpart in St Petersburg on Sunday, Russian Prime Minister Vladimir Putin announced at the opening of the bilateral Russian-Finland Summit an extension until 2010 of the moratorium on rises in Russian export duties on timber exports, scheduled initially to end on 1 January 2009, but extended for at least nine months with the announcement by Moscow in November 2008. Under a regulation adopted in 2007, Russia planned to increase its differentiated export taxes in increments by January 2009, up to 80% of the customs value of the wood, that is €50 per cubic metre. From 1 July 2007, duties went from €4 to €10 per cubic metre, going as high as €25 per cubic metre on 1 April 2008. While Russia believes it has the legal right to increase these taxes before accession to the WTO, its European neighbours - Finland, Latvia and Sweden - take the view that these increases heavily penalise their timber industries and contravene the agreement between the EU and Russia signed in 2004 to facilitate the latter's accession to the WTO. With Russia now seeking to join the WTO as part of a customs union with Belarus and Kazakhstan, its accession no longer requires just the signing of a bilateral agreement on market access with the EU. On Sunday, Putin said that the Russian moratorium on increasing timber export duties would be kept in place “probably into 2011 too”. He stressed, however, that this moratorium was “temporary” and “determined by economic conditions”. The move was welcomed by Vanhanen, whose country is one of the world's largest paper and timber-based products producers, and imports a large proportion of its wood needs from Russia. (E.H./transl.rt)