This week we had a chance to attend Russian Fashion Retail Forum at Collection Premiere Moscow (CPM) which was aimed at digitalization themes in the Russian fashion retail sector. Light industry products imported to Russia now need to have a digital marking.
Here we would like to summarise the main points of the roundtable discussion Digital marking is a crucial element of the state regulation of production and circulation in light industry powered by Messe Düsseldorf Moscow (MDM) and the Russian Association of Fashion Industry (RAFI).
Most of our clients already know that these products sold in Russia need to be marked with unique Data Matrix codes.
Digital markings are mandatory for the following product types:
From 1st of July, 2019
- Shoes classified under HS Codes 6401, 6402, 6403, 6404, and 6405
- Apparel, including work clothes made of genuine and composition leather, classified under HS Code 4203 10 0000;
- Knitted blouses for women/girls classified under HS Code 6106;
- Overcoats, car coats, capes, cloaks, anoraks (including ski jackets), windcheaters, wind-jackets and similar articles for men/boys classified under HS Code 6201;
- Overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles for women/girls classified under HS Code 6202;
- Bed linen, table linen, toilet linen, and kitchen linen classified under HS Code 6302.
This means that ONLY THE ABOVE-MENTIONED GOODS, CLASSIFIED UNDER CORRESPONDING CODES, NEED TO HAVE DIGITAL MARKINGS.
The initial Data Matrix code is generated by National Track&Trace Digital System upon a request of the product's owner — a Russian importer/distributor company that requests a code after the product is registered in the system.
Therefore, ONLY RUSSIAN BASED COMPANIES (IMPORTERS/DISTRIBUTORS) CAN REQUEST THE INITIAL MARKING OF THE PRODUCTS. FROM A CERTIFICATION POINT OF VIEW, IT IS IMPORTANT TO NOTE THAT LOCAL REPRESENTATIVES OF A COMPANY DO NOT HAVE TO APPLY FOR DATA MATRIX CODES. THIS SHOULD BE DONE BY A COMPANY THAT STARTS THE PRODUCT’S DISTRIBUTION CHAIN IN RUSSIA.
Data matrix code is an encrypted unique serial number of the product. It also has a human-readable code, which includes so-called GTIN code of 14 digits + unique serial number of 14 digits + HS Code (4 digits)
This code is generated based on the product and supplier information.
To request the digital code, one must provide the following product and supplier information to the National Track&Trace Digital System:
- Manufacturer’s product code (Item number);
- Product name according to the label;
- Product type;
- Brand (Trademark);
- Upper material composition;
- Inner material composition;
- Sole material (for shoes);
- Importer Tax Identification Number (TIN/INN).
Optional product and supplier information includes:
- Country of origin
The products must be marked with the code before the customs procedures.
The Data Matrix labelling code is applied to the consumer packaging or product label, or shoe products.
This means that the PRODUCT MUST BE MARKED BEFORE CUSTOMS CLEARANCE PROCEDURE. THIS CAN BE DONE AT THE MANUFACTURER'S PRODUCTION SITE (IN THIS CASE, CODES AND MARKING INSTRUCTIONS SHOULD BE PROVIDED BY THE IMPORTER) OR SOMEWHERE IN TRANSIT TO THE RUSSIAN CUSTOMS OFFICE (E.G., AT A MARKING WAREHOUSE).
The importer/distributor (buyer) and the foreign manufacturer should agree on the location or the party responsible for the digital marking at an internal discussion. It is up to you and your buyer to determine who will mark the products. You can apply it yourself after receiving the digital codes from the buyer or the buyer can take care of these issues by themselves.
This new marking system will make the business more complicated, especially for Russian distributors/importers that need to organise and track the process of digital marking. Foreign manufacturers can get involved in the process according to inner negotiations. Moreover, doing business seems to become more complicated each time that new requirements come in force, causing issues for one of the contract sides.
But this regulation complicates matters even for producers that do not have to get involved. The President of the Russian Fashion Retail Forum was also concerned with this issue, asking for a true reason behind these new marking rules.
The new marking system was launched because, according to the official statistics, more than 30% of all imported goods are sold on the black market. Some economists believe that these figures are much bigger — up to 80%.
Moreover, Russian markets are flooded with fake goods. The system aims to reduce the negative influence of black-market imports and fake goods on light industry production.
In conclusion, we want to note that there is no going back after the new system is put in force. NOBODY IS INTENDING TO ROLL BACK THESE NEW RULES. WE SHOULD CONSIDER HOW WE CAN MAKE THIS PROCESS MORE EFFECTIVE AND EASIER FOR ALL SIDES.
For any questions, you can apply to WorldWideBridge LLC. Our specialists will help you to be up to date.