Russia could partially legalise parallel imports – FAS official

02.09.2013

The Russian Federal Antimonopoly Service (FAS), the country’s antitrust regulator, is not in principle against the partial introduction of parallel imports in Russia, Nikolai Kartashov, the head of FAS's department of advertising and unfair competition, told PaRR.

However, it would be problematic to choose indicative sectors and regions that are representative enough and which would indicate what it would be like to legalise parallel imports in Russia, he added.

A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property (IP) owner.

There is currently a debate in Russia on whether to allow parallel imports. The approval of parallel imports has been lobbied for by FAS for two years. As PaRR previously reported, the Russian Ministry of Industry and Trade opposes lifting the ban on parallel imports in the country.

On Monday (26 August), Russia’s ‘Open government’, the analytical centre of the government of the Russian Federation, held a discussion on parallel imports. According to the Open government, this meeting was designed to develop constructive ideas on the issue. During this discussion, one of the opponents of parallel imports suggested introducing them in pilot sectors and regions. According to Kartashov, specific sectors and regions have not been proposed yet.

PaRR was told that Russian first Deputy Prime Minister Igor Shuvalov, who is responsible for competition questions, said that parallel imports are to be introduced in Russia. Hence, its opponents are also trying to come up with forms in which the practice can be legalised.

Production companies, investors, authorised dealers, the Ministry of Economic Development, Russia’s Customs Service, the Russian Ministry of Industry and Trade and the local academic community are all against the legalisation of parallel imports, said Alexander Kirilchenko, a senior associate in the Customs and International Trade Practice at Moscow-based law firm Goltsblat BLP.

FAS [which is the most vocal lobbyist for parallel imports] may propose partial introduction of parallel imports after it completes its research, said Kartashov. Currently, consulting companies are preparing a detailed study on the possible introduction of parallel imports, he added. This study is due to be released at the end of October.

Partial introduction could be unconstitutional

The partial introduction of parallel imports in Russia may contradict the constitutional principle of legal equality of persons, said Vladimir Tchikine, a partner in charge of customs and international trade at Goltsblat .The law states that if goods are neither banned nor restricted, the sellers, buyers and distributors of such goods shall enjoy equal civil rights. The law does not say that some persons "are more equal than others", he explained. Imposition of different rules on different sectors will be discriminatory, Tchikine added.

As PaRR has previously reported, in order to allow a parallel imports agreement with the Customs Union, principles regulating intellectual property rights should also be changed. The agreement, signed on 9 December 2010, establishes regional principles of trademark exhaustion from 1 January 2012.

However, it may be reasonably easy to legalise parallel imports in the Customs Union because Kazakhstan also supports this idea. Yesterday, Russian newspaper Kommersant reported that a group of right holders of Russia, Belarus and Kazakhstan had asked the Eurasian Economic Commision (EEC) to review the Customs Union’s model law ‘On Competition’ (which is currently being drafted). According to these right holders, the law legalises parallel imports in these countries, banning the right holders from taking measures to restrict it.

The partial introduction of parallel imports is only one of the scenarios for the potential legalisation of parallel imports in Russia.

Alexander Kirilchenko has suggested that less stringent customs controls to parallel imports could be applied, compared to controls for counterfeit goods. Currently, counterfeit goods and parallel imports are equally delayed for up to 20 days, he added. Parallel imports could be delayed only for five days, he said.

Currently, parallel importers have the right to claim their costs associated with the suspension of customs clearance procedures through insurance, said Kirilchenko. All rights holders are required to maintain liability insurance before customs officers monitor imports of branded goods, he added.

Currently, a large number of parallel goods are flowing freely into the Russian market, and government agencies do not prohibit that, noted Kirilchenko. The government agencies lost the authority to confiscate parallel imports in 2009, he added. Following this discussion, the analytical centre will compile a report for Russian first Deputy Prime Minister Igor Shuvalov by the end of this week.

Shuvalov’s spokesperson told PaRR that they have not seen this report yet. Shuvalov always takes into account the opinion of the 'Open government' experts, he added. PaRR has reported on the previous discussion of parallel import by the ‘Open government’.

by Natalia Lapotko in London

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