Russia: New developments in regulation of labelling and conformity assessments of goods
1. Digital labelling of goods: latest developments
1.1 Affected goods
Starting from 2019, certain types of consumer goods have to be marked with special data matrix codes or RFID marks (at the moment the RFID marks are only used in the control identification chips which are placed on the fur clothes – such labelling was introduced as a “pilot project” in 2016). Electronic labelling is being introduced in Russia as the result of implementation of the Treaty on Labelling of Goods with Identification Marking in the Eurasian Economic Union (EAEU) (signed on 2 February 2018, entered into force for Russia on 29 March 2019). The member states of the EAEU are, apart from Russia, Kazakhstan, Belorus, Armenia and Kyrgyzstan.
The Russian Government already implemented rules for the labelling of tobacco goods from 1 March 2019. Recently on 5 July 2019 the Russian Government issued the rules for the labelling of shoes. The labelling becomes mandatory for shoes starting from 1 March 2020 (initially it was scheduled to 1 July 2019). The labelling can also already be placed voluntarily starting from 1 October 2019. The rules provide for specific transit rules for the labelling of shoes depending on the date when such shoes were purchased and imported.
Pursuant to Governmental Order No. 1533-r dated 13 July 2019 the list of goods subject to electronic labelling was supplemented with milk products (milk, cream, butter etc.). The term for introducing labelling of milk products will be determined once the results of the experiment which will be started soon are available.
Other types of goods including perfumes, tyres, particular types of clothes, photo cameras and photo flashlights will follow starting from 1 December 2019. Besides this, similar labelling will be implemented for certain types of medicine from 2020.
The Russian Government recently (on 15 May 2019) started the experimental labelling of photo cameras and photo flashlights, tyres from 20 June 2019, particular types of clothes from 27 June 2019, and perfumes from 1 July 2019. Similar experiments have already been successfully conducted for tobacco goods and shoes. Participation in the experiment is voluntary for manufacturers and sellers. The benefit of participation in the experiments is the possibility to receive labelling equipment free of charge.
The Russian Government also recently announced further types of goods which will be included in the new labelling system: baby food, non-alcoholic beverages, cosmetics, home care products, vegetable oils, consumer electronics, ready-made meals containing meat and fish, and grocery food. Other specific labelling and monitoring rules are currently implemented for some types of food (including milk, meat and fish). The ultimate goal is that all types of consumer goods should be labelled starting from 2024.
1.2 Purpose and management of the labelling system
The declared purpose of introducing new labelling is to prevent counterfeit goods coming onto the market and to allow the authorities and consumers to monitor and control the circulation of goods starting from their manufacturing until they are sold to consumers. Each digital labelling code will cost 50 kopecks (less than 1 euro cent). However, the manufacturers and sellers will bear additional costs relating to the purchase and maintenance of labelling equipment, reporting information about the circulation of goods to the labelling system, adjusting cash registers in the stores and training the staff, etc.
New labelling will be managed by the operator of the National System of Digital Labelling “Honest Mark” (officially called the State Information System for Monitoring the Goods which are Subject to the Mandatory Identification Labelling) – Centre for Research in Perspective Technologies (owned jointly by state and private investors). This company has already conducted labelling experiments for tobacco goods and shoes and was officially appointed as the operator of the “Honest Mark” System on 3 April 2019.
1.3 Subject of labelling rules
The new labelling rules for all affected types of goods were recently adopted by Government Resolution No. 515 dated 26 April 2019. There are also specific labelling rules for tobacco products which were introduced earlier on 28 February 2019. The Russian Government may also introduce specific rules for some other types of goods in the future.
Manufacturers, wholesale and retail sellers, and importers of the goods must register in the “Honest Mark” system. However, the registration procedures are structured in such way that only Russian legal entities or entrepreneurs will be able to submit a registration application. This would mean that for foreign manufacturers the labelling will be done via importers.
The registered market players will then be required to enter into service agreements with the operator of the “Honest Mark” system. Under these agreements the operator will either provide such entities with the equipment for generating data matrix codes or will generate the codes itself and send them to the entities. The data matrix codes will contain basic information about the goods (place and date of manufacturing, etc.) which can be scanned and read with specific electronic devices. The market players must also register all the goods which they intend to label in the “Honest Mark” system.
Upon generating or receiving data matrix codes, the manufacturers or importers must print them and place them on the goods or the goods’ packaging. The labelling of each unit of the goods must be reported to the “Honest Mark” system. If the label gets damaged, the goods will be considered unmarked. In this case a new data matrix code must be obtained and the damaged label must be replaced.
With regard to imported goods it is important that a label is placed on the goods (package) before the goods are released for free circulation by the customs authorities. In practice this would mean that the labels must be printed out and placed on the goods (package) by the manufacturer prior to shipment or by the importer in the customs warehouse. It is also planned to organise centres for labelling and marking outside Russia which will be authorised to sell ready-made labels with data matrix codes. The rules on labelling the shoes specifically mention that an importer (and not a foreign manufacturer) is responsible for the labelling of all shoes imported by it into the Russian Federation.
1.4 Liability for breach of labelling rules
The failure to label the goods with the required data matrix codes may lead to their customs clearance being suspended. If unlabelled goods are discovered in the shops, they can be confiscated and destroyed (the exact procedure has not been adopted yet). Manufacturing and selling unlabelled goods constitutes an administrative offence. The fine is up to RUB 100,000 for manufacturers and up to RUB 300,000 for the sellers, and any unlabelled goods will be confiscated. Last but not least, manufacturing, purchasing, storing or selling unlabelled goods may be regarded as a crime in particular cases (criminal liability applies only to natural persons).
2. Conformity assessment of goods: new draft law
2.1 Purpose of conformity assessment
Almost all goods which are manufactured in the EAEU or imported into it are subject to the conformity assessment, which means verifying their conformity with the technical regulations of EAEU (previously Customs Union) or national standards of the member states of EAEU. The conformity is confirmed either by a conformity certificate or conformity declaration (“conformity documents”). The main difference between these two types of documents is that a conformity certificate is issued by a certification body (a private company accredited to issue conformity certificates for particular types of goods) whereas a conformity declaration is made by an applicant (local manufacturer, authorised representative of a foreign manufacturer or seller).
Both the conformity certificate and conformity declaration must be registered in the Unified Register of Conformity Certificates and the Unified Register of the Conformity Declarations respectively. Both documents must be presented to the customs authority upon customs clearance. The absence or invalidity of such conformity documents may lead to imports of the affected goods being suspended.
2.2 New draft law
The Russian Parliament (State Duma) discussed in May 2019 in the first hearing a draft law introducing significant amendments to the Federal Law “On Technical Regulation” No. 184-FZ dated 27 December 2002. This Federal Law regulates in particular procedures for conformity assessment.
2.2.1 Invalidity of the conformity documents
The draft law introduces the procedure and grounds for declaring the conformity documents as invalid. The decisions on invalidity of the conformity documents will be taken by the supervisory authorities. These authorities are the Federal Supervisory Service for Consumer Rights and Human Wellbeing (Rospotrebnadzor), the Federal Services of the Technical Regulation (Rosstandard) and some other authorities according to their competence. The competence of each authority is determined with regard to particular types of goods. For instance, Rospotrebnadzor is responsible for most types of consumer goods, whereas Rosstandard is responsible for B2B goods.
The conformity declaration can be declared invalid in the following cases:
- The declarant is subject to liquidation (termination of activities for individual entrepreneurs);
- A mandatory product recall with regard to the affected goods is announced upon a court decision;
- A supervisory authority orders the suspension of sale of goods that are considered to be unsafe;
- Other cases relating to existing danger or a threat of danger from the goods (the exact list of cases will be determined by the Russian Government at a later stage).
The conformity certificate can be declared invalid in the following cases:
- A mandatory product recall with regard to the affected goods is announced upon a court decision;
- A supervisory authority orders the suspension of sales of unsafe goods if the accreditation of the certification body which issued the certificate is terminated completely or with regard to certain types of goods.
In the latter case (if the accreditation of the certification body is terminated) the certificate holder will be entitled to enter into an agreement with another certification body on the of transfer the rights and obligations under previously issued certificates to such certification body. In this case the existing certificates remain valid and the new certification body will be responsible for them instead of the certification body whose accreditation has been terminated.
Once a conformity declaration or conformity certificate is declared invalid, it will be deleted from the relevant registers and cannot be used for the import or sale of affected goods anymore. The sale of the goods which are already on the market must be immediately stopped.
2.2.2 Priority of the registers of certificates and declarations
According to the draft law, the information in the electronic Unified Register of Conformity Certificates and Unified Register of the Conformity Declarations will have priority over the paper conformity documents. Thus all holders of the conformity documents should verify the information in the relevant registers and take immediate actions to remedy any irregularities. Otherwise, they face the risk that the customs authorities and supervisory authorities rely only on the information from the registers and may stop imports or sales of affected goods.
2.2.3 Inspection controls
Another important amendment concerns what is known as the “inspection controls” of the goods. The inspection control means periodical tests of the goods for which a conformity certificate for series production has been issued. It is not required for the goods for which conformity declarations are issued.
The inspection control must be performed by a certification body that issued the conformity certificate. The exact frequency and procedure are determined by the applicable technical regulations.
If the inspection control is not performed, the conformity certificate will lose its force. The goods that were manufactured prior to termination of the conformity certificate can be still sold until the end of the best-before date or service life. Any goods manufactured after such termination will be subject to a repeated assessment of their conformity.