Russian FAS on parallel imports: Unjustified restrictions on import to Russia are inadmissible
A number of non-Russian brand owners in the automotive and medical products industries have received warnings from Russia’s Federal Antimonopoly Service (“FAS”) regarding allegedly unjustified restrictions on the import of their branded goods into Russia by companies that are not the authorised dealers of the brand owners.
On 14 July 2017, FAS issued warnings to Daimler AG (Germany), KYB Corporation (Japan), Renault s.a.s. (France) and YD-Diagnostics (South Korea) requesting that the brand owners stop imposing unjustified restrictions on the import of branded goods into Russia by companies other than the authorised dealers of the trademark owners. In the FAS’s view, such restrictions constitute an antitrust violation.
According to the FAS, the warnings were issued based on complaints from a number of independent importers indicating that their requests to obtain permission from the above trademark owners for imports into Russia were denied without any reasoning or, in other cases, were not responded to at all.
FAS reports that after reviewing the results of the investigation, it now considers the conduct of the foreign companies as constituting unfair competition in the respective markets. If the brand owners do not comply with the requirements of the warnings within 30 days of receipt, the authority will initiate proceedings for violation of Russian antitrust law by each of the affected companies.
The above actions of the FAS deviate from its previous enforcement practice as well as from the practice of the Russian courts in the last few years, according to which trademark owners were allowed to decide at their sole discretion whether to grant unauthorised importers import permits or not.
Depending on the outcome of the aforementioned cases, the brand owners may be required to reconsider their import structures.
FAS’s position mentioned above gives rise to a number of questions that have no firm answers to date, in particular:
- What reasons underlying a denial by a trademark owner of a requested import permit could be considered justified?
- Is the trademark owner allowed to start a trademark action against a parallel importer who has imported the goods without requesting import permission in advance?
- Will FAS apply its new policy to markets other than automotive and medical products?
According to the FAS’s verbal explanations provided at the briefing held on 17 July 2017,
- FAS does NOT consider denial of an import permit to an independent importer to be an antitrust violation only if
(i) the independent importer seeks permission for the import of non-original (counterfeit) products; or
(ii) the branded goods are also manufactured by the trademark owner in Russia;
- FAS does NOT consider a trademark action against a parallel importer to be an antitrust violation when the parallel importer has not tried to obtain import permission from the trademark owner.
At the moment it is generally advisable for the brand owners to avoid leaving requests for import permits unanswered as well as to avoid rejecting such requests without sufficient reason. Additional measures may include
- rethinking/establishing the process of appointment/rejection of new importers/distributors for Russia as well as for handling individual requests for import permission;
- stipulating criteria for selecting/rejecting new importers in the company’s policy or other documents.