HNB will be Included in the Russian Licensing Regulatory System
According to the Russian media PNP, the Russian government proposed that the production, storage, and supply of cigarettes, tobacco and electronic nicotine products should require a state license. The State Duma passed the bill (No. 310882-8 and No. 310820-8) on its first reading at a plenary meeting on the same day.
Points of the regulation
[a] The bill explicitly includes HNB represented by IQOS for regulatory licensing. All tobacco production equipment must be registered before September 1, 2023.
[b] Production and importation will both require a license, but there is currently no consideration for retail licenses. Production and import license certificates will be required for vaporized electronic cigarettes and HNB products (including tobacco heating devices and heated tobacco sticks) before March 1, 2024.
[c] The punishment has been increased, with up to five years of imprisonment being the maximum penalty for operating without a license. Previously, the bill provided for up to three years of imprisonment for operating without a license.
Translation of the original text
Starting from September 1, 2023, it is proposed to register equipment for producing tobacco and nicotine-containing products in a special registry. It is also planned to implement mandatory licensing for the production, storage and supply of cigarettes, tobacco and e-cigarettes from March 2024. Administrative fines will be imposed for non-compliance with the requirements, and the maximum penalty for operating without a license is five years imprisonment. The State Duma passed the regulation in the first reading on April 12.
More stringent management of equipment and materials
The first bill (No. 310882-8) introduces national regulation of the production and circulation of tobacco and nicotine-containing products and their raw materials. We are talking about traditional cigarettes and electronic nicotine delivery systems - IQOS and e-cigarettes. Deputy Minister of Finance Alexei Sazanov stated that the proposed legislation provides them with the definition and determination of the main technical equipment requirements - it must be registered in the national register.
According to the document, the production, storage, and supply of tobacco and nicotine-containing products require licenses from March 1, 2024. Cigarette retail has not been licensed. For the tobacco industry without, revoking or revoking production licenses, the equipment must be sealed.
A monitoring system for tracking the production and circulation of tobacco and nicotine products will be planned through information such as 'honest mark’. Product circulation will only be possible with electronic universal documents confirming their legality.
The second bill (No. 310820-8) aligns certain legislative acts with the first bill. The new regulations will help effectively combat counterfeit products and protect consumers from counterfeit cigarettes and smoking devices. As the project description points out, the illegal production and circulation of Russian tobacco products have increased in recent years. According to experts, if no action is taken and everything remains the same, the budget in 2024 will lose 34 billion rubles, of which secret tobacco companies do not pay consumption tax, and 50 billion rubles will be lost in 2026 and 74 billion rubles in 2028.
Maxim Topilin said: "Now, since the tobacco market product tracking system has not been put into operation, budget funds received by all levels are less than 100 billion rubles, similar to the regulation of the alcohol market." The Chairman of the Economic Policy Committee of the State Duma pointed out that the document has been prepared and coordinated by the government for a long time. By the second reading, new standards will be consistent with the e-cigarette law, which the State Duma passed at the plenary session on April 11.
What will be the punishment?
They want to introduce a separate Article 14.67 in the Administrative Violations Law to hold those who do not comply with tobacco market equipment and licensing requirements responsible. According to the bill (No. 310899-8), from September 1, 2023, officials will have to pay 150-300,000 rubles for producing cigarettes and e-cigarettes without a license, while companies will pay 300,000-1 million rubles. In the meantime, the products, equipment, and raw materials will be confiscated, and business activities may be suspended for three months.
A fine of 3-5 thousand rubles will be imposed on citizens who use unregistered technical equipment in the state registry, 20-50 thousand rubles on officials, and 100-150 thousand rubles on companies.
Those who illegally produce or sell tobacco or nicotine products will be fined 30-50 thousand rubles.
"Someone proposed to hold those who operate without a license for producing and circulating tobacco and tobacco-related products criminally responsible in the event of large-scale crimes. Nikolai Brykin, a member of the State Duma's National Construction and Legislation Committee, suggested that more responsibility should be borne by this organized or especially large-scale groups. Another bill (No. 310855-8) formulated the corresponding amendments to Article 171.3. The maximum penalty will be a fine of 3 to 4 million rubles, five years of forced labor, or imprisonment. This article now provides for punishment for the illegal production and circulation of alcoholic beverages, and alcoholic behavior.
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