Russia: Recent developments in Russian consumer protection law
1. New “honest mark” labelling system
Starting from 2019, certain consumer products (tobacco, shoes, perfume, leather clothes, coats, blouses for women and girls, bed and table linens and cameras) must be marked with specific labels containing a QR code. Such labels must contain the information required under the general rules but will be more difficult to counterfeit. The non-official name of the new labelling system is the “honest mark”, as its main goal is to prevent the sale of counterfeit products.
QR codes will be generated for each product by the Centre of Prospering Initiatives, a commercial organisation which is authorised by the Ministry of Trade and Industry for this purpose. QR codes will be sold to sellers for a fee (the amount and calculation of such a fee will be determined by the government at a later stage), while the software and hardware required for labelling and reading the QR codes will be provided free of charge.
All products marked with QR codes will be registered in the product information labelling system maintained by the Centre of Prospering Initiatives. Under the new laws, all manufacturers, importers, distributors, suppliers and retailers of goods marked with QR codes will be required to submit information on the circulation (sale) of such products to the Centre of Prospering Initiatives.
The procedure for labelling with QR codes and details of the content of the labels have not yet been defined. Compliance with the new labelling requirements will be monitored in retail shops by the consumer supervisory authority Rospotrebnadzor.
Furthermore, an app is planned which will allow consumers to scan the QR codes and obtain complete consumer-related information about the products. The government will establish the rules on withdrawing unmarked products from the market and having them destroyed.
2. Changes to the Consumer Protection Act
2.1. New provisions on aggregator websites
Starting on 1 January 2019, the Russian Consumer Protection Act (“Consumer Protection Act”) will contain provisions on the activities of an operator (“Aggregator Operator”) of an aggregator website (“Aggregator Website”). An Aggregator Website is a special website publishing information on products or services offered by an internet supplier of products or services (“Supplier”) (such as Amazon, Alibaba or Yandex.Market) and enabling the consumer to purchase and pay for the respective products and services through the Aggregator Website.
Under the new Consumer Protection Act, the Aggregator Operator is included in the list of persons (together with the Supplier and manufacturer, and their representatives) which may be monitored by Rospotrebnadsor.
2.1.2 Liability for correctness of information
The new Consumer Protection Act requires the Aggregator Operator to publish true information about itself (name, address, working hours, company registration number) and about the Suppliers on the Aggregator Website by publishing such information on the Aggregator Website directly or via links to the websites of the Supplier.
The Aggregator Operator is liable for the correctness of the information on the Aggregator Website unless such information was provided by the Supplier and was not changed by the Aggregator Operator. The Aggregator Operator is not liable for the performance of the sale and purchase agreement entered into by a consumer with a Supplier via the Aggregator Website unless otherwise agreed between the Aggregator Operator and the Supplier.
2.1.3 Return of prepayments
Under the new Consumer Protection Act, the Aggregator Operator is obliged to return a prepayment made by a consumer through the Aggregator Website if (i) the products or services were not delivered to the consumer in time and (ii) the consumer has sent the Supplier, either directly or through the Aggregator Website, notification of their withdrawal from the sale and purchase or service agreement. The Aggregator Operator may dismiss the request of the consumer if it (i) receives from the Supplier a confirmation that the products or services were accepted by the consumer and (ii) submits such confirmation to the consumer within ten days of receipt of the consumer’s request. The consumer may challenge such confirmation in the court.
2.2 Authorised representatives
An authorised representative (“Authorised Representative”) must usually be appointed by a foreign manufacturer or a foreign seller to certify goods for the purpose of their import into Russia. The new Consumer Protection Act requires that, upon a consumer’s request, the consumer must be provided (i) by the foreign manufacturer and (or) seller with information on the Authorised Representative and (ii) by the Authorised Representative with a copy of the agreement with the foreign manufacturer or seller.
3. Proposals to increase penalties
The Ministry of Agriculture has proposed increasing some penalties for administrative offences concerning consumer rights. Currently such penalties are fairly low compared to the penalties for other administrative offences (e.g. in the areas of antimonopoly and data protection laws). Currently, they do not exceed RUB 50,000 (currently approx. EUR 660).
In particular, fines for the sale of poor quality products, providing misleading information and failure to provide information about the products (or services) and the seller (manufacturer, service provider etc.) are to be significantly increased (from three to six times the current penalties) and the affected products or items used to provide the affected services will be confiscated.
A similar proposal was already introduced as a draft law last March by some members of parliament. The penalty for the sale of products (or services) without the required information was to be increased to ten times the existing penalties.
4. Interesting court cases
Matters relating to the protection of consumers’ rights are decided by the courts of common jurisdiction. On 17 October 2018, the Supreme Court adopted the “Overview of the Court Practice related to Protection of Consumer Rights with regard to Sale of Goods and Services”. This document contains some important conclusions based on different court cases, which should be observed by sellers, importers and manufacturers of consumer goods as well as providers of services to consumers:
- A consumer may raise a claim against a foreign manufacturer before Russian courts even if the manufacturer does not maintain an official representative office in Russia but sells or promotes its products in Russia through companies acting as de facto representatives of the foreign manufacturer;
- A consumer may raise a claim regarding defective goods not only against a retailer but also against an importer or manufacturer of such goods, whereby all these potential defendants are obliged to inform the consumer of their rights on the return of such defective goods;
- If a consumer has upgraded a product (e.g. a car) and then returned it to the seller due to significant defects, the seller must refund not only the price of the product but also the cost of the upgrade,
- If a consumer has invited the seller to participate in an assessment of a product defect organised by the consumer instead of returning the defective product to the seller for its own assessment, the seller is not entitled to refuse to satisfy the consumer’s claim on the return of the defective product and is obliged to pay the applicable penalties for not satisfying the claim in time,
- On the other hand, the relevant court has dismissed the consumer’s claim on the return of a defective product (a mobile phone) after the consumer organised the assessment himself, but refused to give the defective product to the importer to conduct an assessment,
- The courts of lower instances have questioned the application of the Consumer Protection Act to a case when a consumer purchased ten tablets and asked to exchange them for tablets of another colour; the courts eventually applied the Consumer Protection Act but dismissed the claims, since tablets are included in list of technically sophisticated products which are excluded from exchange,
The manufacturer is obliged to provide repair and maintenance services for products (e.g. mobile phones) during their whole service life, in particular by supplying the necessary spare parts even after such products are taken out of retail sale; however, if the manufacturer (or importer) breaches this obligation, it must compensate the consumer only for proven damages but not automatically for the full price of a defective product which cannot be repaired due to a lack of spare parts.