Cigarette from fraternal

22.11.2022
#industry news

The problems of selling illegal tobacco from the CIS republics in the Chernozem region were discussed at the conference of the Kommersant Publishing House.

In 2022, the dynamics of sales of illegal cigarettes in half of the Chernozem regions exceeded the all-Russian by 12.1%, according to profile analysts. In the Kursk region, according to their estimates, every third pack (29%) was illegally imported into the Russian Federation bypassing excise taxes and duties. In the Orel region, the figure is 18.3%. This is explained by the proximity of the region to the border with Belarus, where cigarettes are many times cheaper — from 30 rubles per pack. The main way of tobacco smuggling, as customs officers say, is the "fictitious transit" scheme: the formal destination point of the cargo indicates territories inaccessible for operational inspection. But in reality, trucks do not reach there, but are unloaded in Russia.

Experts estimate the damage to the budget from illegal tobacco trade without excise taxes and duties in the Chernozem region at more than 1.5 billion rubles in just six months. Participants of the legal market note that illegal products are also distributed in the niches of sticks and liquids for vaping. Here, an untested counterfeit not only brings direct losses to the state, but also threatens the health of smokers beyond measure. In this niche, the situation with state regulation is far from optimal, the conference participants concluded.

In November, the Kommersant publishing house, represented by the representative offices of "Chernozemye" and "South of Russia", held an interregional online conference "Combating illegal tobacco trade as a point of growth of the regional economy". It was attended by representatives of government authorities, regulatory and law enforcement agencies, representatives of leading manufacturers

Expensive habit

Baysolt Khamzatov, First Deputy Director of the Autonomous Non-profit Organization "National Scientific Center of Competencies in the field of combating Illicit Trafficking in Industrial Products" (NCCR), at the conference presented data on the results of the II All-Russian Research of Illicit Trafficking in Tobacco Products in the Russian Federation in relation to the regions of the Chernozem region. In total, the research conducted in the first half of 2022 covered 85 subjects of the Russian Federation, 1073 settlements with a total population of 87 million inhabitants.

According to the NCCR, with an average level of sales of illegal cigarettes in the country of 12.1% (every eighth pack), three regions of the Chernozem region exceed this indicator. "The most significant growth, twice the dynamics of the Central Federal District," according to Mr. Khamzatov, is observed in the Kursk region. There, the share of the "gray" market reaches 29% (almost every third pack).

"Due to the well-known events, Belarusian products are being delivered to the western regions more actively than before. The borders of the Republic of Belarus are also blocked in some way, they do not send cigarettes to European countries, so they decided to direct the entire flow to us. The second factor was a decrease in attention to marking. The problem is compounded by the fact that moratoriums on inspections have been announced as part of business support. This ties the hands of law enforcement and supervisory authorities in many ways," Mr. Khamzatov said. He estimated the losses of budgets of all levels from the sale of cigarettes in the Kursk region bypassing excise taxes and duties at 639 million rubles for six months: "These are direct losses of the state."

The next in the macroregion in terms of illegal tobacco sales, according to the NCCR, is the Oryol region (18.3%). "There are improvements here due to work within the framework of public control, but the indicators still remain high," Mr. Khamzatov commented. He estimated the budget losses from the situation in this region at 345 million rubles. The level of illegal sales in the Tambov region exceeded the national average only slightly (12.9%). "The situation in this region, on the contrary, has worsened," the deputy director of the NCCR believes. Budget losses here are estimated at 199 million rubles.

In the Voronezh Region, the share of illegal tobacco retail in the first half of 2022 was lower than the national average — 7.1%. This is the 64th place in Russia, but budget losses due to the size of the regional market are estimated at least 162 million rubles.

In the Lipetsk region, the lowest indicator in the Chernozem region is 2.5%. He was "significantly worse in the first quarter and improved in the second," Mr. Khamzatov said. Based on this, the losses for six months could amount to 243 million rubles.

According to Mr. Khamzatov, the bulk of cigarettes illegally sold on the territory of the Russian Federation and imported from the EAEU countries are of Belarusian origin (as well as according to the results of the first study). The problem of illegal trafficking of Belarusian tobacco products practically determines the entire illegal cigarette market in the regions of the Black Earth region. Of these, two—thirds are factory packs with excise stamps of the Republic of Belarus, legal in the legal field of the neighboring country, the rest are without any excise taxes. Another 4.7% is accounted for by supplies from Armenia, where cigarettes are more expensive than Belarusian, but cheaper than Russian. The share of the actual fakes remains relatively small. Illegal cigarettes are most common in rural areas, the deputy director of the NCCR concluded.

Blow to the packs

Maria Nosova, head of the Business Development Department of the Kursk City Hall, agreed with the data that "there are some points of increasing illegal tobacco sales," since "the region is borderline." Ms. Nosova noted that the city administration does not have "sufficient powers" for a hard struggle against illegal trade.

"We regularly organize raids, complaints from residents come to the governor in personal messages. We note that mostly illegal products are sold by individuals who do not have registration with the tax authority. The administrative fine for illegal trade to citizens ranges from 1 to 2 thousand rubles, in case of repeated violation it may be increased. In total, we have compiled more than 1.3 thousand protocols for illegal trade since the beginning of the year, but half of the defendants pay fines irregularly," the official said.

Alexey Ryzhenin, Acting Vice-Mayor of Voronezh, head of the Consumer Market Department of the city administration, said at the conference that in 2022 the city authorities "have not recorded a single case of the sale of illegal tobacco products" in non-stationary retail facilities . "All kiosks are monitored annually. Even when a moratorium on inspections was introduced in 2022, we still carried out monitoring activities, since they are not inspections," Mr. Ryzhenin said. In case of fixing the case of the sale of illegal products, it is possible to terminate the contract on the placement of non-stationary trade objects on municipal land unilaterally, the official added.

Elena Solopova, Deputy chairman of the City Planning and Land Use Committee of the Tambov administration, said that the city authorities are fighting the illegal tobacco trade on their territory with "raid measures together with the police and Rospotrebnadzor." "In the conditions of the moratorium on business inspections, the possibilities of municipal authorities are limited. But in any case, fairs and areas of unauthorized trade are being inspected," Ms. Solopova said.

Sergey Zotov, Deputy head of the Department of Rospotrebnadzor for the Tambov region, agreed that his department, together with colleagues from municipal authorities, "attaches special importance to the prevention of violations of current legislation by persons involved in the turnover of tobacco products." "First of all, these are preventive visits, within the framework of which the management staff explains to entrepreneurs the mandatory requirements for marking tobacco products, their display, the rules of sale," the speaker said. — If there are grounds, warnings are issued to representatives of the retail market, indicating which violations and in what time it is necessary to eliminate. Of course, in our work to identify the facts of the illegal sale of cigarettes and other tobacco products, we analyze information from the Chestny Znak system and citizens' appeals. The department receives a large number of complaints from residents of the region almost daily, but most of these letters, unfortunately, are submitted without the applicants' contacts, which does not allow for effective feedback from citizens. Nevertheless, we consider such applications in accordance with the procedure established by law."

Oksana Dyadeva, Deputy Head of the Consumer Protection Department of the Department of Rospotrebnadzor in the Lipetsk region, said that in the control of illicit tobacco trafficking, they work closely with representatives of customs, police, Federal Tax Service, supervisory authorities, executive authorities and local self-government. The year 2021 was indicative. "We held 54 events, examined more than 4.5 thousand packs of tobacco products, — Oksana Dyadeva clarified. — 28 protocols were drawn up for violation of product marking requirements. As a result, more than 3.8 thousand cigarette packs were arrested. Of these, 90% are Belarusian — made tobacco products. The materials were sent to the court. He issued 26 resolutions on bringing the perpetrators to administrative responsibility. The total amount of fines amounted to 148 thousand rubles. More than 3,850 packs were confiscated."

The representative of Rospotrebnadzor added that during the events they revealed other administrative violations related to the turnover of tobacco products. For example, an open display, an understated price of a pack, the sale of cigarettes from "points" located closer than 100 m from schools and other educational institutions. "In total, 34 protocols have been drawn up for all identified violations," Oksana Dyadeva clarified. — In 2022, the Government introduced a moratorium on inspections. In the first nine months of 2022, we carried out 11 control and supervisory measures, 4.5 times less than a year earlier, examined a little more than 950 packs. The total amount of seized tobacco products amounted to 44 thousand rubles. Based on the results of the consideration of administrative cases, the court issued resolutions on bringing the perpetrators to administrative responsibility."

Oksana Dyadeva added that in the conditions of the current moratorium on the implementation of control and supervisory inspections of enterprises, specialists of the Rospotrebnadzor Department in the Lipetsk region pay serious attention to different preventive measures. According to the results of the analysis of information from the Chestny Znak system and from public organizations that identify the facts of illegal cigarette sales, the department's specialists issued 7 warnings to representatives of trading firms about the inadmissibility of violating mandatory requirements.

In addition, the Department of Rospotrebnadzor in the Lipetsk region is actively working to identify the facts of the sale of tobacco products via the Internet, which is a gross violation of the law: in 2021, 30 such facts were revealed, from January to September of this year — 24.

Alexander Bogdan, deputy head of the Department of the MES and AC AIF of Russia in the Orel region, said that in 2022, his department initiated seven criminal cases on the facts of illegal cigarette trade under articles on the production, acquisition, storage, transportation or sale of goods and products without marking provided for by the legislation of the Russian Federation (Article 171.1 of the Criminal Code of the Russian Federation) and illegal the use of means of individualization of goods (Article 180 of the Criminal Code of the Russian Federation).

"On an ongoing basis, work is underway to find points of sale of counterfeit tobacco products. We interact with colleagues from the FSB in the Orel region, together we go to the places of sale — these are markets, fairs, individual sales points for which we have information. The share of products from Belarus is really large, but recently the share of Kazakhstan, Armenia, and the Arab Emirates has increased," the policeman said.— We have previously tried to establish communication with the Republic of Belarus on combating counterfeiting, but it did not bring us much result.

Smoke without a fatherland

Participants of the illegal tobacco market supply it to Russia from the CIS republics using gray schemes, which are often problematic to identify, Andrei Klimenko, deputy head of the customs control service after the release of goods of the central customs administration, said at the conference.

"Yes, we see that there is a problem. The main array of cigarettes really has a source from Belarus. Believe me, we see it, we control it, we struggle with the situation. These are not one-time promotions, but a whole range of our events. But due to certain reasons, I will not be able to disclose the forces, means and tactics of our actions," the customs officer said, commenting on the speeches of legal market participants and experts.

According to him, illegal cigarettes enter Russia through the use of a "fictitious transit" mechanism. The "gray" scheme assumes that a truck with tobacco from the Republic of Belarus is issued as the next one through the Russian Federation in transit to another state.

"The end point is the territories from which the inspector cannot quickly obtain a large array of information. Imagine yourself in the place of the inspector, who must quickly check whether he is being lied to or not. The duty of the customs authority is not only to identify violations, but also to ensure the timely implementation of the legal procedures necessary for business," Mr. Klimenko said.

Prior to the adoption of the former regions of Ukraine into the Russian Federation, the most popular schemes were with supplies allegedly to the Lugansk and Donetsk People's Republics. But there were also more exotic options, for example, with an address in Afghanistan. "For a long time it was impossible to get any data at all from there, waiting for this product and whether it was received. Do they smoke cigarettes there at all?" the customs officer said. The truck did not reach its destination, unloading the goods in one of the Russian border regions.

Mr. Klimenko expects that after the "unification of legislation and the emergence of abuse control opportunities" in the new republics, smugglers will begin to change schemes, including endpoints in other partially recognized states around the Russian Federation. "The people who play on the other side of the football field are prepared and very creative," he said.

Mr. Klimenko also spoke about the idea proposed by the participants of the conference to fight the carriers of illegal cigarettes with the confiscation of cars. "The neighboring Republic of Belarus practiced this mechanism of regulating relations between carriers and the state three years ago, but then it was abandoned. Colleagues, the confiscation of a vehicle simply on the basis that the goods are being transported with a violation does not correlate in any way with the reform of the control and supervisory activities that are carried out in the state. One of its principles is the creation of favorable and comfortable conditions for bona fide participants in economic activity. This fine line must be observed," the customs officer stressed.

According to him, marking of tobacco products on the territory of Belarus itself will be an effective way to combat illegal importation. "If the marking system works on the territory of the republic itself, a huge layer of problems will be solved. We will be able to understand where the goods are going, whether they are intended for consumption in the country itself or for export outside its borders," Mr. Klimenko believes.

Maxim Kurgansky, Director of Legal Product Turnover Protection at the Center for the Development of Advanced Technologies, told in more detail about the system of digital marking and traceability of goods Chestny Znak already in force in Russia. According to him, due to the use of the system, 18 previously unofficial cigarette productions have already been legalized, more than 30 illegal productions have been closed, and the hookah tobacco market has been whitewashed. As a result, the accruals of excise taxes on tobacco products will increase by more than 20% in 2021

"One of the most difficult moments is to determine the legality of products on the ground. The marking system should solve this issue. At a point of sale, it is possible to take a phone and scan the product code through the Chestny Znak application. A law enforcement officer who stops a car with a load of cigarettes will also not need additional actions — it is enough to read the code from the package," Mr. Kurgansky said.

The speaker considers it relevant to spread marking to the market of electronic delivery systems for nicotine and vaping liquids, "which are now about 85% illegal." As a result, "bona fide manufacturers have more opportunities, including to protect their trademarks," Mr. Kurgansky believes.

Adventures of Electronics

Alice Andreeva, Corporate Affairs Manager of the Southern Branch of Philip Morris International affiliated companies in Russia (Parliament, Marlboro, Chesterfield, L&M brands, Iqos heaters, Lil and sticks for them) confirms that the counterfeit problem "is actively spreading to new formats of nicotine delivery devices." This is also relevant for the regions of the Black Earth region.

"As the popularity of nicotine-containing products grows, so does the interest in it from the shadow business. Examples of illegal trafficking of such products can be found in such types as tobacco sticks, disposable electronic cigarettes, open—type electronic nicotine delivery systems (ENDS) and liquids for them," the expert explained. — In particular, we observe the flow of sticks for tobacco heating systems intended for sale in Kazakhstan and Armenia to the territory of the Russian Federation for our products. The main reason for such a flow is the same as in the case of illicit trafficking in tobacco products: a significant difference in excise taxes. Between Russia and the EAEU countries, the difference in excise rates for such products reaches 80-90%."

Ms. Andreeva emphasizes that the retail sale of tobacco sticks occurs with gross violations. For example, a pack of sticks produced in Armenia and sold in Russia does not contain information in Russian. And a pack of sticks produced for the market of Kazakhstan does not contain information about the person authorized to accept claims from buyers from Russia, which contradicts the norms of the federal law "On Consumer Protection".

"The situation is aggravated by the fact that there are no mandatory requirements for the application of special stamps on the packaging of heated tobacco products," said Ms. Andreeva, the rapid growth of illegal trafficking in such product categories as disposable electronic cigarettes, open—type e-cigarettes and liquids for them is also alarming. The lion's share of such products is either imported into Russia illegally, or declared as other electronic products that are not subject to excise taxation. Another problem is that users independently purchase components for the production of liquids for ENDS and produce a liquid of the desired concentration at home, which, of course, does not allow us to talk about the safety of such a product."

According to Alisa Andreeva, the fight against the illegal market is a common task of the state and business.

"To date, most of the legislative measures have been taken to combat illegal tobacco products, which have been discussed recently, and which representatives of the industry have also called for," the expert noted. "In order to prevent further growth in the volume of illegal products, it is important to make the legislative measures taken work in practice to the fullest extent. It is necessary to continue and strengthen control, supervisory and law enforcement measures to curb the illegal trafficking of all nicotine-containing products within the framework of current legislation."

Ms. Andreeva concluded that industry representatives welcome and unequivocally support the fact that the introduction of mandatory marking of liquids for ENDS, including nicotine-free, in cartridges, capsules, as well as a part of electronic single-use nicotine delivery systems is planned ahead of schedule.

"This is important, including from an economic point of view," the expert is sure. — It is obvious that such a decision will provide additional tax revenues for the state budget. According to expert estimates, the introduction of full traceability of nicotine-containing products, primarily containing liquids, can already bring in more than 15 billion rubles annually."

Source:
kommersant.ru