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Russia introduces tougher responsibility for counterfeit products trade

July 25, 2013, 11:42 UTC+3

The fines will grow 3-5 times on average

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On Wednesday, Russian President Vladimir Putin signed a law, which introduces a tougher responsibility for the trade of counterfeit products. The fines will grow 3-5 times on average. However, the experts noted that the very government actually promotes the development of the counterfeiting market, particularly raising sharply the excise duties on tobacco and alcohol.

From now on, false weighting, cheating in accounts, counterfeiting and misleading of the consumers will be punished by a fine of 3,000-5,000 roubles for people, 10,000-20,000 roubles for officials and from 20,000 to 40,000 roubles for legal entities, the Rossiiskaya Gazeta daily reported. For the production of goods, “which contain the illegal reproduction of a trademark of another company, service mark, the names of the place, where the product was manufactured, or similar marks” people will pay a fine of the cost of product, but no less than 2,000 roubles. Officials should pay a double price of the product, but no less than 20,000 roubles. Legal entities should pay a fine of a triple cost of the product, but no less than 40,000 roubles. In all cases the product is confiscated.

As the experts believe the authorities can hardly hope for the success of the idea, the Novye Izvestia daily reported. First and foremost, this is because the fines hardly spread on the shadow sector of economy that makes a third of its size according to different estimates.

For instance, the volume of the shadow market of alcohol products is already comparable with the volumes sold in the legal sector, the newspaper noted. Those who buy the counterfeit vodka at the price that is 50% lower that the bottle of vodka sold in the official trade will hardly hurry to complain about the sellers of cheap, false vodka. The similar situation has emerged with the nicotine market. According to official reports, the share of illegal trade makes from 0.5% to one percent of tobacco market in Russia now. According to the estimates of the experts, the share of counterfeit cigarettes may reach 10-15% already by 2015 over high excise duties.

On the other hand, the experts warned that tougher penalties may also affect decent businesspeople. “A tougher responsibility for the trade of counterfeit products is an attempt to introduce more civilized rules on the Russian market,” director of the centre of legal regulation of interstate relations at the Russian Presidential Academy of National Economy and Public Administration Dmitry Matveyev said. “But according to Russian realities, you should not expect an immediate and considerable effect from these measures. According to the practice, such tougher measures are also used frequently for bribery and as the way of rivalling struggle,” he underlined.

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