The Ministry of Industry and Trade introduces a mechanism for accounting for the beneficiary of a trademark to combat circumvention of duties

The Ministry of Industry and Trade of Russia has started developing a new customs control tool, which involves taking into account the actual beneficiary of the trademark when processing imports. The initiative is aimed at reducing the number of schemes in which importers associated with jurisdictions with increased duties use intermediaries and formal production sites in friendly countries to conceal the real origin of the brand and obtain preferential treatment.

According to the current rules, the analysis is conducted mainly on the basis of the country of manufacture of the goods, which makes it possible to formally withdraw products from unfriendly states through jurisdictions with more lenient conditions. The Ministry of Industry and Trade proposes to combine customs control with the identification of the final trademark owner in order to increase the transparency of supply chains and eliminate manipulations affecting the amount of duties.

Interdepartmental cooperation between the Ministry of Industry and Trade, Rospatent and the Federal Customs Service is expected, which will allow for the formation of a legal framework that takes into account both the territorial and legal bases of brand ownership. The mechanism has been submitted for consideration by the working group on customs and tariff policy under the leadership of Deputy Prime Minister Alexander Novak.

The ministry stressed that the technical aspects will need to be worked out, but there are no significant obstacles to the implementation of the initiative. The planned changes should strengthen competitive conditions in the domestic market and minimize abuses affecting budget revenues.