"The Ministry of Finance of Russia has submitted to the Government of the Russian Federation a bill on regulating the production and turnover of tobacco products and raw materials for their production. The document introduces state regulation of the production and turnover of tobacco products, nicotine-containing products and raw materials for their production within the framework of a separate industry law with the establishment of specialized control. The already established system of state regulation and control of the alcohol market will be used as a regulatory model," the report says.
The fragmented regulatory and legal regulation of the production and turnover of tobacco products leads to the lack of coordinated decisions in this area and, as a result, an increase in the illegal production and turnover of tobacco and nicotine-containing products, the Ministry of Finance points out.
"The prepared document is aimed at comprehensive state regulation of the tobacco industry, reducing the volume of illegal production and turnover of tobacco and nicotine-containing products in order to ensure the safety of these goods for citizens, as well as to protect the economic interests of the country," the report says.
The document provides for licensing of activities in the field of production and import of tobacco, nicotine-containing products and raw materials for their production, and also provides for the obligation of manufacturers to register the main equipment for the production of such products. If the equipment is not in use, it will need to be preserved. Equipment involved in illegal production will be subject to seizure.
"At the same time, licensing of retail sales is not provided for by the bill. This will let the possible risks of excessive administrative and financial burden on both small and medium-sized businesses and public authorities of the constituent entities of the Russian Federation, as well as the risks of increased expenditures of regional budgets," the message says.
Since 2019, tobacco and nicotine-containing products have been marked with the means of identification of the "Chestny ZNAK" CDAT. "This makes it possible to ensure traceability of the movement of manufactured and imported tobacco products to the final consumer. The developed draft law provides that the introduced state control over the production and turnover of tobacco and nicotine-containing products will also be based on the marking of the CDAT, which has shown its effectiveness during the application. This system will take into account the volume of production and turnover of products and raw materials, which will provide an integrated approach to the implementation of state control," the Ministry of Finance explains.
To prevent illegal production and turnover, the document also provides for other measures: a prohibition of the retail sale of tobacco products, nicotine-containing products not in consumer packaging, separate restrictions on the movement of products and products, mandatory availability of accompanying documents, marking during their turnover.
"The draft document proposes to establish the main provisions on a new type of federal state control (oversight) in the field of production and turnover of tobacco products, nicotine-containing products and raw materials for their production: to determine the level of its authority, the grounds for suspension and cancellation of licenses, as well as the application of other measures to unscrupulous market participants, including the seizure of tobacco products, tobacco and nicotine-containing products and raw materials in illegal circulation, equipment for their production," the report says.
Together with the draft industry law, the Russian government has also submitted drafts of the necessary amendments to the Code of Administrative Offences and the Criminal Code of the Russian Federation in terms of countering the illegal production and trafficking of tobacco products, tobacco products, nicotine-containing products and raw materials for their production.
The position of the CDAT
As noted in the press service of the marking operator of the Center for the Development of Advanced Technologies (CDAT), the use of an "Chestny ZNAK" to regulate the tobacco market will provide an integrated approach to control the release, logistics, sales of tobacco products in the country, increase the collection of excise taxes and in the future ensure a seamless transition to the introduction of a digital excise stamp in the country, which it will allow manufacturers to save up to 2 billion rubles a year.
"A similar integrated approach is already being used in the experiment on digital marking of beer products. To date, the system allows to fully monitor the production and consumption of tobacco products in the Russian Federation, to see leftover stock, cost dynamics, and effectively combat counterfeiting," the CDAT noted.