Back in 2018, perfumery was included in the range of products for testing the product labelling and traceability system.
The system is designed to place unique identification codes on each perfumery product and trace it from production through import into the country through sale to the end consumer.
A commercial entity Centre for Developing Promising Technology (CDPT) was selected as the system operator, which claims that the system will help the business purge the market of unfair competition and counterfeit products and improve the government’s tax collection rate.
The perfumery industry testing was to continue for five months, from the start of July through the end of November 2019. Companies did not manage to complete their tests on time, however, since the testing procedure was only approved one month before this period ended. Meanwhile, the Russian government recognised the testing as successful and approved final perfumery labelling rules.
Perfumery industry players have been struggling to absorb and implement these rules in practice since the beginning of 2020. Perfumery labelling is being introduced stage by stage: from January through March 2020, companies were registering with the labelling system, whereas, from 1 October 2020, perfumery labelling becomes mandatory for all companies throughout the country. At the same time, products manufactured or imported into Russia before this date may be sold without labelling for another year, i.e., until 30 September 2021.
Also exempted from labelling by the government are test product samples intended for certification, products manufactured for export and so-called testers in any volume, i.e., sample perfumery products not sold to end customers but intended for in-store testing prior to purchase.
Before being labelled, products must be registered with the so-called National Catalogue, providing key information about the perfumery product (name, brand, volume, etc.).
Labelling codes are issued by the CDPT and the manufacturer or importer is required to apply them to the products. The EAEU labelling agreement suggests that the Customs Union states apply the labelling following customs clearance. Unfortunately, the Russian authorities have remained deaf to the industry’s plea to allow imported products to be labelled right after being cleared through customs. As a result, perfumery importers must handle the labelling at bonded warehouses, this increasing labelling costs substantially and delaying customs clearance.
A company must reflect the operations of manufacture, import, sale and purchase of the labelled products in the labelling information system. Most commercial documents (such as consignment notes, transfer and adjustment documents) are also acquiring an electronic format. Not all the requisite electronic formats have been implemented, however, and the information system does not always run smoothly. This is a source of concerns for perfumery market players. We hope these matters will be resolved by the time mandatory labelling comes in, since breach of labelling rules entails grave liability for infractors.
Trading in unlabelled products is punishable by administrative fines of up to RUB 300,000 and confiscation of the products involved. Any transactions with unlabelled products worth over RUB 2.25 m also trigger criminal liability. Moreover, a draft law tightening this liability is currently being developed.
In 2020, industry players are getting ready to operate in compliance with the labelling rules, this requiring considerable investments in IT systems, equipment and reorganisation of business processes. Yet, the COVID-19 pandemic is disrupting these plans, requiring businesses to re-distribute financial resources and delay the activities required in the run-up to labelling.
Given all these circumstances, the industry hopes the labelling launch might be postponed. Time will show if these hopes are met in reality.
 Russian Government Directive No. 792-r dated 28 April 2018.
 Russian Government Resolution No. 814 dated 26 June 2019.
 Methodological Guidelines for Participants in Experimental Identification Labelling and Monitoring of Trade in Perfumes and Eaux de Toilette (approved by the Russian Ministry of Industry and Trade on 31 October 2019).
 Russian Government Resolution No. 1957 dated 31 December 2019.
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