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Russia: New penalties for violation of product recall obligations

04.08.2017

On 30 July 2017, amendments to the Code of the Administrative Offences of the Russian Federation came into force. These amendments introduce penalties for violation of the obligations with regard to product recalls (Federal Law No. 175-FZ dated 18 July 2017). According to the new Art. 14.46.2 of the Code of the Administrative Offences, liability will be imposed on the manufacturer, services provider, vendor and the authorised representative of a foreign manufacturer (“Responsible Persons”). Penalties of up to RUB 500,000 (currently approx. EUR 8,000) are introduced. In the event of repeated violations, the penalty will be up to RUB 1 million (currently approx. EUR 16,000) or administrative suspension of activities with confiscation of defective goods.

The product recall procedure was established some time ago by Art. 37-40 of Federal Law No. 184-FZ dated 27 December 2002 “On Technical Regulation”, but is rarely used in practice.

This procedure provides that Responsible Persons who receive information that goods are not in conformity with technical regulations are obliged to inform the responsible authorities within 10 days of receiving such information. After that, the Responsible Persons must verify the information within another 10 days (unless a longer period is required due to the measures necessary). Then, within a further 10 days, the Responsible Persons have to develop a damage-prevention programme and obtain confirmation thereof from the responsible authorities. The measures provided by such a programme (e.g. alerts in the mass media, repair or replacement of the defective goods free of charge) must be implemented by the Responsible Persons within the timeframes provided in such a programme. If the danger caused by defective products cannot be eliminated by the planned measures, the Responsible Persons are obliged to stop the manufacture and sale of the defective products immediately.

Previously, the aforementioned terms were not generally observed, since product recalls are usually carried out simultaneously in many countries and the preparation of all measures takes a lot of time. Up to now, the authorities have not monitored the violation of the terms provided by the law on product recalls and therefore there were no negative consequences for the Responsible Persons who violated such terms. Moreover, in the past the responsible authorities were not very familiar with the product recall procedure and often delayed confirmation of the damage-prevention programmes.

As special penalties have now been introduced for all steps of the product recall procedure, the responsible authorities will likely pay more attention to the observance of timeframes for product recalls and impose penalties on the Responsible Persons. With regard to foreign products, this liability will be imposed primarily on the vendors and authorised representatives of foreign manufacturers with their registered office in the Eurasian Economic Union.

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