Russia Proposes State Licensing for Tobacco and Vaping Products

On April 12th, according to Russian media outlet PNP, the Russian government proposed that the production, storage, and supply of cigarettes, tobacco, and electronic nicotine products must obtain state approval. The State Duma passed two bills (No. 310882-8 and No. 310820-8) on this day during a plenary session.

The key points of the summary of the FIRSTS bill are as follows:

The bill specifically includes heat-not-burn products represented by IQOS under license regulation. All tobacco production equipment must be registered before September 1, 2023; production and imports require a license, while retail sales are currently not subject to licensing. By March 1, 2024, production and import licenses must be obtained for vape and HNB products, including pods and smoking accessories. Penalties have been increased, with those operating without a license facing up to five years in prison, compared to the previous maximum sentence of three years for unlicensed operation.

Original Text in Chinese: 俄罗斯国家杜马 Translation: Russian State Duma. Image source: Russian State Duma.

Click the link for the original text in the State Duma: Proposal to imprison for underground production of cigarettes and vapes.

Translation to standard journalistic English: The original text is translated as follows:

Starting from September 1st, 2023, there will be a proposal to register equipment used for the production of tobacco and nicotine-containing products in a special register. Additionally, there are plans to implement mandatory licensing for the production, storage, and supply of cigarettes, tobacco, and electronic cigarettes starting from March 2024. Administrative fines will be imposed for violations, and those operating without a license could face up to five years in prison. The State Duma passed a package of four bills with these provisions in its first reading on April 12th.

The requirements for equipment and supplies will become stricter.

The first bill (No. 310882-8) introduced regulations on the production and distribution of tobacco and nicotine-containing products and their raw materials by the government. We are discussing traditional cigarettes, the IQOS electronic nicotine delivery system, and e-cigarettes. According to Alexei Sazanov, the Deputy Minister of Finance, the bill provides a definition and specifies the main technical equipment requirements, which must be registered on the national registry.

According to the document, the production, storage, and distribution of tobacco and nicotine products will require a license. This license will be enforced starting March 1, 2024. Retail sales of cigarettes have not yet been granted a license. Any tobacco industry without a revoked production license must close down their equipment.

A plan is being developed to implement an information monitoring system based on the use of "honesty labels" to track the production and distribution of tobacco and nicotine-containing products. Only electronic universal documents confirming their legality will allow for the distribution of these products.

The second bill (No. 310820-8) aligns certain legislative actions with the first bill. The new regulations will help to more effectively combat counterfeit products and protect consumers from harm caused by fake cigarettes and smoking devices. As stated in the project description, the illegal production and distribution of Russian tobacco products has increased in recent years. According to experts, if no action is taken and things remain as they are, the budget will lose 34 billion rubles by 2024 due to secret tobacco companies not paying consumption taxes, 50 billion rubles by 2026, and 74 billion rubles by 2028.

Maxim Topilin, the chairman of the State Duma Economic Policy Committee, stated that the budget has received less than 100 billion rubles due to the absence of a tobacco market product tracking system, similar to the regulation of the alcohol market. The document has been prepared and coordinated within the government for a long time. When it reaches the second reading, the new regulations will be consistent with the E-cigarette law passed by the State Duma at the April 11 plenary session.

What punishment will be received?

They propose to introduce a separate Article 14.67 in the Administrative Offences Code to hold those who fail to comply with tobacco market equipment and licensing requirements accountable. According to Bill No. 310899-8, from September 1, 2023, officials will have to pay fines ranging from 150,000 to 300,000 rubles for illicit production of cigarettes and e-cigarettes, while companies will pay 300,000 to 1,000,000 rubles. Additionally, products, equipment, and raw materials will be confiscated, and businesses may face a suspension of operations for three months.

Individuals who use technology equipment that has not been registered with the national registry will face a fine of 3,000 to 5,000 Russian rubles. Officials will face fines ranging from 20,000 to 50,000 rubles, while companies will face fines ranging from 100,000 to 150,000 rubles.

Individuals caught illegally producing or selling tobacco or nicotine products will face a fine of 30,000 to 50,000 rubles.

There is a proposal to hold those who engage in the illegal production and distribution of tobacco and tobacco products criminally responsible during large-scale criminal activities. Member of the State Duma's Committee on State Building and Legislation, Nikolai Brykin, also suggested that greater responsibility be placed on organized groups or especially large-scale groups. The Cabinet has drafted another bill (No. 310855-8) to make amendments to Article 171.3 accordingly. The maximum penalty will be a fine of 3 to 4 million rubles, five years of forced labor, or imprisonment. This article currently specifies penalties for the illegal production and distribution of alcohol.

Title: Progression and Expert Interpretation of the Russian E-Cigarette Flavor Ban (click the image below to access) A special report on the development and analysis of the Russian ban on flavored e-cigarettes is presented herein. Experts provide their interpretation and insights into the ban's progress. (The image below can be clicked to access the report.)

Further reading:

Russian nicotine product manufacturers must apply for a license. The bill has passed its first reading.

Russian Legislative Process Overview: What is the Current Status of the Ban on Offensive Language?

Russian Taste Ban Timeline and Background Analysis - Passed in One Day through Three Readings of the Bill

On September 1st, a ban on flavored additives in electronic cigarettes will go into effect in Russia. The proposal for this ban can be found in its entirety in attachment 4. On April 11th, Russia will hold its first discussion on a proposal to ban flavored electronic cigarettes.

Russia proposes a maximum fine of 500,000 rubles for selling e-cigarettes to minors.

Russian Prime Minister Mishustin is considering a ban on electronic cigarettes.