The Russian Ministry of Finance has proposed imposing criminal liability for the production and sale of tobacco products without a license. If the bill passes, manufacturers and suppliers of counterfeit cigarettes could face up to three years in prison.
The Russian Federation is currently submitting draft laws to the government's legal activities drafting committee for review. The proposed revisions include the Russian Criminal Code, the Russian Criminal Procedure Code, and the Russian Administrative Offenses Code. The Ministry of Finance has prepared accompanying documents for these laws, stating that they aim to implement state regulation for the production and circulation of tobacco products.
The Ministry of Finance's press department stated that the Ministry of Finance has prepared a bill to introduce state regulation in a separate industry law for the production and circulation of tobacco products, nicotine-containing products, and their production raw materials, and to establish specialized controls.
This bill has been revised to include changes to section 171, subsection 3, which pertains to the illegal production and/or trade of ethanol, alcohol, and alcohol-containing products. Specifically, the revised language now includes references to "tobacco products, tobacco derivatives, nicotine-containing products, and their raw materials.
In the final version, this provision will stipulate that mass production, purchasing, storage, supply (including importation into or exportation from the Russian Federation) of tobacco products, tobacco-related products, nicotine-containing products and their production raw materials without proper licensing will result in fines ranging from 500,000 to 1,000,000 rubles (45,000 to 90,000 yuan) or the equivalent of 1-3 years of income of the offender, or imprisonment for 1-3 years.
According to experts, the share of illegal tobacco products in the Russian market has increased from 1.5% in 2016 to 10.7% in 2021. The Audit Chamber reported that the total amount of federal budget losses due to the sale of illegal "tobacco" from 2016 to the first half of 2021 was 295.6 billion rubles (27.05 billion yuan). Of this amount, the loss of consumption tax was 246.3 billion rubles (22.54 billion yuan), the loss of value-added tax was 49 billion rubles (4.48 billion yuan), and the loss of excise tax was 3 billion rubles (270 million yuan).
Tobacco industry representatives believe that this bill will help combat the illegal distribution of tobacco products. The representative of Japan Tobacco International (JTI) in Russia said, "We support the comprehensive bill formulated by the Ministry of Finance.
Representatives of PMI's affiliated company in Russia believe that the measures being prepared will further reduce the share of the illegal market, thereby increasing the fill of the national budget.
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The Ministry of Finance proposes criminal penalties for the sale of counterfeit cigarettes.
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