Russia’s Mandatory Stamp System on E-Cigarettes Advanced to November

On August 9, 2022, according to the draft resolution published by the Ministry of Industry and Trade of the Russian Federation, Russia will begin to implement "mandatory stamp management" (hereinafter referred to as the "stamp system") for e-cigarettes and e-liquids on November 1, 2022. ). This is consistent with the information disclosed at the meeting of the Russian Tobacco Industry Expert Council on July 26.

Previously, Russia conducted a "stamp experiment" for e-cigarettes as a draft was in the works. According to the information on the official Russian state website, this initiative started on February 15, 2022 and was originally scheduled to last until February 28, 2023. This ended early as the draft resolution was published nearly 6 months earlier than the original planned date.

According to research firm Euromonitor International, more than 67 million e-cigarettes and around 10,000 liters of e-liquids were sold in Russia last year, worth a total of 35.5 billion rubles. Most of these are sold through illegal channels, which analysts estimate costed the government $28.5 billion in lost sales tax. Russia's decision to end the experiment ahead of schedule and introduce mandatory stamp system is to combat counterfeit and illegal e-cigarette products, protect government finances and taxes, and ensure legal market competition.

Although the mandatory stamp system is still in the draft resolution stage while the specific details have not been disclosed yet, similar "stamp and tracking system" has already been implemented in Russia on products such as traditional tobacco, pharmaceuticals, milk, fur coats. These examples can be used for reference for the upcoming e-cigarette stamp system. 2FIRSTS contacted Peter Davydov, the chief press officer of the Russian Council of Tobacco Experts, and he provided information and guidelines for the "stamp system of e-cigarettes".

As the fourth largest e-cigarette market in the world, Russia is an important area for many e-cigarette companies, but many companies are still very unfamiliar with the "stamp system". To this end, 2FIRSTS collected and compiled the interpretation of the "stamp system", its circulation process and how to apply for it.

What exactly is a stamp and tracking system?

The verification stamp and tracking system is based on the Russian Federal Law No. 387 "Basics of State Trade Activities Management of the Russian Federation", which entered into force in February 2010. Then fixed into its current form in May 2019 (Russian Government Decree No. 515).

The main form of stamp consists of a two-dimensional encrypted verification code. The information contained in the stamp includes manufacturer, country, material information, brand, expiration date, and distribution. The stamp is encrypted and cannot be copied or reused, and it expires when the product is canceled or sold to consumers.

How does a stamp system records product movement?

According to the official website of the Russian state, the "stamp system" will go through five stages:

 Stage 1. Countries will assign each product a unique code that the manufacturer or importer can use on the packaging of goods.

Stage 2. Product codes will track an item's entire path from the factory to the consumer.

Stage 3. The code will record the entire logistics chain, and the dealer will need to check the product code on the stamp before the product is put on the shelves.

Stage 4. This code will appear on the billing page when the consumer checks out, after which the code will expire.

Stage 5. If you want to check the code after shopping, you can check it in the Honest SIGN app.

These five stages cover almost all the points from production to sales, which not only protects the legitimate rights and interests of consumers to the greatest extent, but should also facilitate the state to monitor product information and market conditions. Enabling back tracking to problems and provide data support for tax and policy formulation.

How do I apply for a stamp and tracking system?

Russia's mandatory stamp for e-cigarettes will be officially implemented in November, and the current stamp management for e-cigarettes is still in the experimental stage. According to Peter Davydov, if you want to qualify for the "e-cigarette stamp experiment", you can register on the official website of the Russian state, fill in the questionnaire, submit it, and wait for the review results.

The questionnaire will ask for tax identification number, product name, contact person and contact information. Distribution channels and wholesalers will need to answer with their specific roles. If they are manufacturers or importers, they need to provide HS code or TN VED code, production type, country of manufacture, and indicating whether they have a product stamp equipment.

For the upcoming official stamp application, we can use other established product stamp system as a reference. The application for the official stamp system will likely be applied for by the business entities registered with a legal person of the Russian Federation. Necessary specific information according to those guidelines, include product name, manufacturer, trademark, ingredients, model, method of use. Also supplementary information such as product use, consumer attributes, and safe use requirements. Merchants are responsible for the costs incurred in ordering, obtaining and pasting the stamp. They can decide for themselves on how to apply the mark on the outer packaging of the product.