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Russian Product Labelling System Set to Impact on Hong Kong Exports

Unified Labelling Information System set to be rolled out to consumer electronics, general clothing and other sectors.

Photo: Unified Labelling Information: Set to be rolled out across the majority of Russian products by 2025.
Unified Labelling Information: Set to be rolled out across the majority of Russian products by 2025.
Photo: Unified Labelling Information: Set to be rolled out across the majority of Russian products by 2025.
Unified Labelling Information: Set to be rolled out across the majority of Russian products by 2025.

Following the success of an experimental labelling regime trialled in the fur garments, pharmaceuticals, spirts and tobacco sectors beginning in 2016, the Russian Federal Government is now looking to roll out a similar system across a wider range of products. Among the sectors under active consideration are perfumes, consumer electronics and certain items of clothing. This will be a prelude to far more general implementation further down the line.

The experiment began in August 2016, when a Unified Labelling Information System was introduced for fur garments. This saw unique identification codes paired with individual items, with these codes then being used to track the items from manufacture / import, through distribution and, ultimately, to purchase. The system was predicated on the idea that manufacturers / importers would inform the operators of the monitoring system as to the number of codes they would require, with only this restricted number then issued. These codes would then be used as the key means of tracking any product's provenance and, hence, legitimacy.

As the product then proceeded along the supply chain, its progress and veracity could be checked at any point until it was actually purchased, when the code would be deleted from the system. If at any point trading standards or customs officials came across any lacking the requisite codes, they would then be confiscated or destroyed. This ensured that all such products circulated within Russia had been subject to the appropriate import tariffs and other due taxes, greatly reducing the number of smuggled / counterfeit items that were finding their way onto the nation's shelves and rails.

Following the positive outcome of the trial in the fur sector, legalisation was then put in place to extend the system to pharmaceuticals in February 2017, with spirits / tobacco gaining similar assent in July 2018. The passing of a recent decree – 792-p – has now cleared the way for perfumes, clothing and cameras to be added to the list.

Overall, all of these moves are in line with a wider initiative – the National Strategy on Illegal Turnover of Products Prevention. Ultimately, it is believed this will see the compulsory labelling programme also extended to jewellery, food, chemical products, fuel, aviation technology, automobiles and all the output of Russia's light industries by 2025. In line with this, moves are already under way to bring electronic items, children's goods, construction materials and machinery in general within the terms of the initiative.

In order to meet the requirements of the expanded system, manufacturers, suppliers and retailers will have to register under the terms of a new Unified Labelling Information System, which will be launched later this year. This will be run along the same lines as the current fur administration system, with all existing Unified Information Labelling Systems being consolidated within it. The only exception will be the system that currently applies to pharmaceuticals, which will remain distinct due to the nature of the sector and the more complex identification criteria involved.

At present, the preliminary schedule for the introduction of statutory labelling for various product categories is as follows:
•  Tobacco products – 1 March 2019
•  Footwear – 1 July 2019
•  Ladies' and girls' machine and handmade knitwear blouses – 1 December 2019
•  Perfumes – 1 December 2019
•  Automobile tyres – 1 December 2019
•  Genuine and artificial leather garments (including workwear) – 1 December 2019
•  Coats, overcoats, jackets, parkas, raincoats – 1 December 2019
•  Photo cameras, photo flashes, flash lamps (excluding video cameras) – 1 December 2019
•  Bed linen, tablecloths – 1 December 2019

Hong Kong manufacturers and suppliers looking to service the Russian market will need to factor these new requirements into their production / logistics / import workflow and ensure their goods are in full compliance with the extended regime. By and large, such companies will have the option of either securing the required labels within Russian territory or externally through such established import conduits to the Russian market as Lithuania, Estonia or Latvia.

Leonid Orlov, Moscow Consultant

Content provided by Picture: HKTDC Research
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