Export Knowhow

Exporting to Russia: Is Your Business Ready for Digital Marking?

In July 2019, Russia introduced a new law mandating the marking of consumer goods. According to the law, all consumer goods sold in Russia must be marked with a special digital code that will guarantee their authenticity and quality. What do Swiss exporters need to be aware of in this regard?

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The marking programme is being introduced on a phased basis, and by 2024, a single national marking system will cover all categories of consumer goods. According to the law, all consumer goods sold in Russia must be marked with a special digital code that will guarantee their authenticity and quality. The new system aims to increase safety for Russian consumers by combating the problem of counterfeit goods and low-quality analogues of well-known brands.

A dedicated public digital track and trace system called Chestny ZNAK has been created to manage the new digital marking scheme on a country-wide level. All consumer goods manufactured in Russia or destined for export to Russia must be marked with a code that serves as a ‘digital passport’, tracking the product on its journey from factory to store.

Which goods are affected?

Digital marking is coming into force gradually and is already required or announced for the majority of consumer goods, from medicines and tobacco products to clothing and baby food. Since January 1, 2021, light industry goods including clothing, tires, photo cameras, dairy products, and perfumes and eau de toilette must be marked. Selling these products without the required label will be considered illegal and blocked by the cash register in the store.

Details on which goods are affected and the dates from which digital marking will be required for each category are available in full on the Chestny ZNAK website.

What exporters to Russia need to know

The main principle of the new digital marking system is total traceability from manufacturing to sale. When an item is manufactured, it is assigned a unique code. A label with this code is attached to the item and the code is entered into the Chestny ZNAK system. At every stage as the product travels from the manufacturer to the consumer, the code is checked and compared with the code in the system, verifying that the code is valid to fight misuse and fraud. Full details about how the system works are available here.

Foreign manufacturers who export goods to Russia need to comply with the digital marking law, so goods that are intended for shipping to Russia must be marked with these codes and registered in the Chestny ZNAK system.

How to register in the Chestny ZNAK system and obtain codes for digital marking?

The codes for the digital marking have to be obtained by the company, which will hold the ownership of the goods at the point of customs clearance. However, as for the registration process in the Chestny ZNAK system a person needs a Russian Qualified Electronic Signature (which cannot be done if the person does not have registered with the Pension Fund and the Tax Authority of Russia) it will be impossible for most foreign companies to register themselves. Therefore, for an exporter, which is not registered with the Chestny ZNAK it is important, that the ownership at the point of customs clearance is already with the Russian distributor or client. In this case, the Russian partner can obtain the codes.

The interactive Chestny ZNAK portal doesn’t offer automation. However, the administration volume is quite high: For every product goods registration, emission orders, import and shipment reports have to be submitted manually. This is feasible only for small volumes. Already from a turnover of 1000 marked goods per month, it can be efficient to automate the process by using a dedicated solution. But it is important that the solution provider is an officially registered integration partner of Chestny ZNAK. The Export Directory member SCHNEIDER GROUP, for instance, has obtained this status. It offers companies that export consumer goods to Russia as well as local producers a comprehensive solution, implemented on the basis of the SAP Cloud Platform, which supports full integration with SAP and the Russian accounting system 1C. There is also a light version that helps companies with small quantities of marked goods to save both implementation time and costs.

Would you like to know more about digital marking in export to Russia?

Contact our expert Schneider Group via our EXPERT DIRECTORY

S-GE: your partner in international business

We at Switzerland Global Enterprise guide Swiss companies on their way into new markets - with concrete information, competent advice and a global network of experts. Get in contact with Michael Kühn, Senior Consultant for Russia.

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