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. Last Updated: 07/27/2016

Labeling Law Spare on Specifics

Russia's multilingual store shelves are about to get a makeover.

Regulations set to come into effect May 1, which require food products to be labeled in Russian, have caused an uproar among companies importing goods. While few question the wisdom of using labels in Russian, many foreign companies say they do not have enough information or time to comply with the rules before next month's deadline.

The government issued a resolution (No. 1575) in December requiring all imported food products to carry labels printed in Russian, displaying the following: name, place of production, company, weight or volume, ingredients (including nutritional value), storage conditions, expiry dates, method of cooking and recommended use.

"The aim of the new regulations is to protect the rights of Russian consumers. We do not want to hamper imports," Asker Nekhai, head of the state trade inspectorate at the Foreign Trade Ministry, told a meeting called last week by the European Business Club to clarify the regulation.

But a cloud of uncertainty hangs over the one-page resolution, which by all accounts is short on specifics compared to its lengthy U.S. and Western European analogues. The resolution governs food imports, but it does not specify regulations for different types of products.

"What is food? Is anything that is consumed food?" said Jean Brough, an attorney at Baker & McKenzie, pointing to one of many ambiguities in the law. For instance, is a bottle of French wine to be treated the same as a candy bar or aspirin?

Stickers placed over foreign language packaging appear to meet the requirements, but the resolution does not state so specifically, lawyers said.

Government officials have indicated that a single label is sufficient for packaged products with several components, such as packets of chewing gum. However, they have sent out contradictory signals about whether bulk foodstuffs meant to be used as ingredients, as opposed to retail goods, should require information in Russian.

"Basically, they haven't considered the issue," said Brough, adding that it potentially comes down to the whims of customs officials as to whether, for example, a 100-kilogram sack of flour must meet the guidelines.

Part of the problem with the new regulation is that it does not specify how the law should be enforced. In particular, the role of the State Customs Committee is not clear.

The possibility of food rotting at the border has caused anxiety for many foreign companies unsure whether labels need to be in place before products enter the country or at the point of sale. Many companies prefer to put stickers on products at facilities in Russia, where labor and printing costs are lower.

Brough said government officials had indicated that products without Russian labels could physically pass the border if they were destined for a "bonded warehouse" and were cleared by customs at a later date. "But no one will give anything officially or in writing," she said, adding that such an arrangement was not referred to in the law.

The Foreign Trade Ministry's inspection division is responsible for implementing the resolution and can confiscate goods if they do not comply with the law. But the State Anti-Monopoly Committee also has a team of inspectors that can levy fines, said Valentina Zaitseva, deputy head of the committee's department on consumer rights.

Many foreign companies are rushing to print labels ahead of the deadline. Others are worried about products that may still be on store shelves after May 1.

Two lobbying groups are pressing the government to clarify the rules, or adopt a grace period.

"We are pushing for a transition period to allow time for all the uncertainties to be worked out," said Natalie Sarkic-Todd, director of the European Public Policy Advisers group in Russia. She said similar European Union regulations set a two- to six-year transition period for different products.

Impact Russia, a Russian-U.S. government relations firm which has been lobbying on behalf of major U.S. corporations, has been working out a set of detailed recommendations that they plan to submit to the State Customs Committee, the Foreign Trade Ministry and Gosstandart in mid-April. The proposals call for a grace period and spell out regulations for different products based on U.S. and EU regulations. "We hope they will find our recommendations useful and adopt them," said Konstantin Panin, a project director with Impact Russia.