Russia Implements Mandatory E-Cigarette Digital Tagging System

According to Russian media reports on August 11th, a draft resolution published by the Russian Federation's Ministry of Industry and Trade proposes the implementation of a mandatory digital labeling system for electronic cigarettes and e-liquids. This system is set to commence on November 1st, 2022.

The purpose of this system is to eliminate illegal methods of importing electronic cigarettes, enable traceability of electronic cigarettes, and regulate and increase tax revenue from electronic cigarettes.

管控" is a Chinese term that roughly translates to "management and control" or "regulation." It is often used in the context of government policies aimed at managing or containing various social or economic issues. In standard journalistic English, it could be translated as "regulation and management" or simply "control.

Russia's mandatory e-cigarette labeling system has been in the works for some time. According to information on the official website of the Russian government, this plan will be implemented on February 15, 2022 and will originally run until February 28, 2023 for testing. The publication of this resolution is almost four months earlier than originally planned.

According to data from research firm Euromonitor International, Russia sold over 67 million electronic cigarettes and around 10,000 liters of e-liquids last year, totaling a value of 35.5 billion rubles.

Industry insiders knowledgeable about Russia report that the country is a significant consumer of electronic cigarettes and is the world's fourth-largest market for such products. Russians have a particular preference for strong e-liquid flavors, and their demand for e-cigarettes is high due to their high demand for alcohol.

A reporter from Securities Times e Company recently visited an electronic cigarette company, where executives stated their intention to reduce their reliance on the American market and expand their presence in the Russian market. Many domestic electronic cigarette companies are also targeting the Russian market in hopes of gaining a share of the market.

However, the Russian market has its peculiarities. Currently, the majority of e-cigarettes exported to Russia are not legal, and exporters transport them to neighboring areas before entering Russia through illegal channels. The reason for this is reportedly due to the difficulty in finding legitimate export channels that can connect with Russian officials. Because of various smuggling opportunities, Russian consumers can easily purchase e-cigarettes from local stores. In recent years, the electronic cigarette market in Russia has grown rapidly.

Recently, Russia has been attempting to increase control over electronic cigarettes, and electronic labeling has emerged as a convenient method of achieving this goal. The use of a "marking and tracking system" has already been implemented in Russia for a range of products including traditional tobacco, pharmaceuticals, milk, tires, and fur clothing. The experience gained from these implementations could provide valuable insights as Russia prepares to implement an electronic labeling system for e-cigarettes.

Chinese electronic cigarette organization 2FIRSTS has reached out to Peter Davydov, Chief Press Officer of the Russian Tobacco Expert Council, for information guidance on "electronic cigarette labeling experiments".

The primary forms of electronic tagging include two-dimensional codes and encrypted verification codes. The information contained in the tag includes details such as the manufacturer, country of origin, material information, brand, expiration date, and distribution status. The tag uses encryption technology making it impossible to replicate or reuse, and once the product is sold or withdrawn from the market, the tag's mission is considered complete.

How does the tagging system track product circulation?

According to the official website of the Russian government, the "tagging system" will go through a total of five stages.

During the first stage, the government will allocate a unique code to each product, which can be used by manufacturers or importers on the packaging of the goods.

In the second stage, the product code will track the entire journey of the goods from the factory to the consumer.

In the third phase, the code will track the entire logistics chain, with distributors checking the product code before it is put on the shelves.

In the fourth phase, this code will appear on the billing page when consumers check out, after which the code will cease circulation.

In the fifth stage, if you wish to verify the code after shopping, you can check it using the Honest SIGN application.

These five stages almost cover all aspects of the production and sale of goods, not only guaranteeing consumers' legitimate rights to the fullest extent possible but also facilitating the government's monitoring of product information and market conditions for the purpose of problem tracing, taxpayer support, and policy-making data.

How to apply for a marking and tracking system?

In four months, Russia will officially implement mandatory labeling for electronic cigarettes. Currently, the management of labeling for electronic cigarettes is still in the experimental stage. According to Peter Davydov, those who wish to participate in the "electronic cigarette labeling experiment" can register on the Russian government's official website, fill out a questionnaire, and wait for the results of the review.

The questionnaire requires individuals to provide their tax identification number, product name, contact person, and their contact information. Channel partners and wholesalers must specify their specific role. If the respondent is a manufacturer or importer, they must also provide HS codes or TN VED codes, production type, production country, and indicate whether there is a product labeling device.

Regarding the upcoming official trademark application, it may be helpful to reference experiences from other product categories. In Russia, those seeking to obtain a trademark must apply through the Unified State Register of Legal Entities and Individual Entrepreneurs. Applicants are required to provide specific information, including product name, manufacturer, trademark, ingredients, model, and instructions, as well as supplemental information regarding product use, consumer demographics, and safety requirements. Businesses will be responsible for covering the costs associated with reserving, obtaining, and applying the trademark to their products. They may choose to photocopy the trademark and include it on the product's packaging in any way they see fit.

2FIRSTS will continue to monitor the latest developments in Russia's electronic cigarette regulatory policies. For more information, please click here to access the specialized topic.

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