Russia plans to enact new law: e-cigarettes and other nicotine-containing products require sales licenses

Russia plans to enact new law: e-cigarettes and other nicotine-containing products require sales licenses

The Russian government is considering a bill that would require retailers of tobacco products to obtain a sales license, while imposing heavy fines on individuals and businesses that violate regulations to sell nicotine-containing products, including e-cigarettes.

According to Kommersant on August 14, the Russian government is considering a bill on retail licensing of tobacco products, a measure aimed at protecting the market from illegal goods.

The bill was jointly drafted by Andrey Kutepov, chairman of the Federation Council's Economic Policy Committee, and Alexey Sinytsyn, deputy chairman.

To obtain a license, it is necessary to submit an application, a passport copy of the main technical equipment, and a copy of a document confirming ownership or management of the equipment. In addition, a state fee of an unspecified amount must be paid.

For the sale of unmarked tobacco and nicotine-containing products (such as e-cigarette oils, heated tobacco products), individuals will be fined 10,000 ($109.47) to 20,000 ($218.94) rubles, public officials will be fined 30,000 ($328.40) to 50,000 rubles ($547.34), and legal entities will be fined 300,000 ($3,284.04) to 500,000 rubles ($5,473.40). The accompanying notes to the bill point out that these fines are disproportionate to the profits from the sale of tobacco products and do not incentivize market players to leave the gray area.

According to the Ministry of Finance, from 2021 to 2023, the proportion of illegal tobacco products in Russia increased from 11% to more than 13%.

The bill states that in the first nine months of 2023, illegal tobacco trade caused losses to the state budget of about 75 billion rubles ($820 million), while in the second quarter of 2024, this proportion was 11.3%.

The electronic registration system for tobacco product production licenses will come into effect on September 1, 2023. From March 1, 2024, the Russian Alcohol and Tobacco Control Agency (Росалкогольтабакконтроль) will have the right to supervise tobacco production and circulation, combat violations, and control compliance with relevant regulations during supply, procurement and transportation.