In Russia, they are strengthening control over companies that use a fictitious production scheme to legalize gray imports. The new mechanism will work through the Honest Mark state labeling system and will allow identifying enterprises that claim to be Russian manufacturers, but actually have neither production facilities, employees, nor warehouse infrastructure.
Our expert Anna Alikberova talks in detail about the "Honest Sign" marking in an article here.
We are talking about so-called phantom companies or pseudo-producers. Such structures formally register products as Russian, receive labeling codes and put the goods into legal circulation, although there is no real production at the declared address. For the market, this is one of the most sensitive schemes in gray imports, as it creates unequal conditions for bona fide producers and allows them to circumvent some of the control requirements.
The new system will work in two formats. The first stage is remote verification already at the registration stage. Companies will have to send time- and geolocation-recorded photos and videos through a special mobile application. This will allow the system operator to check whether the production facility exists physically and whether it corresponds to the declared activity profile.
The second stage involves regular monitoring of existing market participants. If the labeling system detects suspicious behavior, the company may be contacted for an inspection. On-site, the availability of equipment, employees, inventory, and the correspondence of addresses in the actual business documents will be assessed. Special attention will be paid to the data indicated in the notices of commencement of operations and documents on product compliance with technical regulation requirements.
The consequences for violators will be severe. If a company is recognized as a false manufacturer, it will stop being issued labeling codes. This automatically means that it is impossible to legally put the product into circulation and sell it through official channels. Information on products that have already been released will be passed on to the control authorities for further action.
At the first stage, the mechanism will cover manufacturers of shoes, light industry goods, perfumes, tires and dietary supplements. Later, the system is planned to be extended to radio electronics, building materials, bicycles, cosmetics, household chemicals, motor oils and a number of other categories. Thus, the government is gradually shifting labeling from a product accounting tool to a system of deep control of product origin and business transparency.
The reason for the scaling was the previous inspection of the CRPT and Rospotrebnadzor. During the pilot, the system identified 297 companies with signs of suspicious activity in the dietary supplements, footwear and light industry segments. According to the inspection data, 94% of them did not confirm the presence of a real production. There were residential buildings, hotels or vacant lots at the declared addresses. These results showed how widespread the problem of pseudo-production has become in certain market categories.
Manufacturers will have to confirm the availability of real infrastructure, while importers and marketplaces will have to carefully check the origin of products and the status of counterparties. With the growth of digital control, the labeling system is becoming part of the overall architecture of tax, customs, and commodity monitoring.
