The beginning of 2019 in the field of product labeling was marked by the strengthening of the legal foundation of the process in the Republic of Kazakhstan.

Thus, on April 2, 2019, the President of the Republic of Kazakhstan signed the Law on Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on the Development of the Business Environment and Regulating Trade Activities, excluding a number of legal gaps regarding the national labeling of goods in Kazakhstan.

At the same time, it should be noted that the labeling initiative is being implemented within the framework of the Eurasian Economic Union and work on creating a legal framework and directly implementing labeling procedures has continued at the national level for more than 3 years in the Russian Federation, while Kazakhstan’s business has only a pilot project on labeling fur products in 2017-2018

For reference: According to the Ministry of Finance of the Republic of Kazakhstan, during the pilot project the number of fur importers, who issued the goods declaration, increased by 23 per cent (from 63 per cent to 78 per cent), the growth of customs duties and taxes on imports increased by 70 per cent (from 170 million tenge to 283 million tenge), the growth of domestic tax revenues for this activity increased one and a half times to 182.9 million tenge.  

In addition, the labeling of fur products helped to identify taxpayers who underestimate their income in order to apply preferential taxation. Thus, the number of entities carrying out activities on the basis of a patent decreased 6.2 times (from 243 to 28).

Currently, Kazakhstan is going to launch a pilot project for labeling shoe products. The representatives of the Russian Center for the Development of Promising Technologies LLC (hereinafter – RCDPT LLC), legally authorized by a single labeling operator in the Russian Federation, came to Kazakhstan to share their experience.

During the meeting held on April 12,2019, Arman Shakkaliev, chairman of the Committee for Technical Regulation and Metrology of the MIID of RK, announced that the Ministry would be the coordinating agency for labeling and traceability of goods in the country. Work plans for the direction were announced, including the development of a Roadmap for conducting labeling and traceability pilot projects, plans for a pilot project for labeling shoes by the EEU member countries.

It is worth noting that Kazakhstani businessmen see a number of risks and express concerns regarding the low level of readiness to introduce product labeling, need for a detailed analysis of the feasibility of implementation, planned labeling implementation mechanisms, and possibility of minimizing additional costs for Kazakhstani business related to the upcoming labeling.

Also during the meeting, the business community identified key issues of the implementation of labeling of footwear products, including those related to imports, cross-border movement, retail, infrastructure, financial model of the project, mutual recognition of brands of the EEU countries, etc.

The chief designer of the RCDPT LLC Anatoliy Gaverdovsky, who presented the structure of the processes, administrative and IT solutions adopted in the Russian Federation, etc., repeatedly noted that the work on labeling goods in Russia began from the stage of immersion into specifics of this or that branch since “the universal approaches and universal solutions” are impossible.

“Without a detailed analysis of the industry, immersion in its specifics, the main objectives of labeling remain unattainable. The state puts the improvement of legal business conditions as the main priorities in introducing product labeling.  The state is set to provide the legal business with all possible assistance by suppressing the possibility of putting counterfeit into circulation,” Anatoliy Gaverdovsky said.

It is worth noting that at present in the domestic sector of light industry the proportion of counterfeit and smuggling products is quite high, and industry representatives already see in the labeling of goods a real tool to combat gray imports, and therefore hopes on the effectiveness of this practice.

Upon completion of the reports of invited Russian participants, a large number of issues of interest to entrepreneurship were asked by representatives of business and government agencies, including the need to label footwear products manufactured under the state defense order, as in the Russian Federation. They raised the issue of labeling costs per unit of goods (shoes) and many others at the meeting.

“At present, the footwear products that are manufactured under state defense orders are not subject to mandatory labeling in Russia. The decision was taken by the relevant competent authorities of the state,” Anatoly Gaverdovsky said.

The department of manufacturing industry of the Atameken NCE RK, taking into account the rather accelerated development of events on labeling shoe products, encourages the domestic business industry to take a more active part and be aware of the work being done. The Atameken NCE RK, in turn, will make every effort to get the Kazakh business maximum benefits from labeling procedures at the lowest possible cost of entrepreneurship.

Presentation: Digital labeling and Traceability in Russia

If you have any questions, please, contact: e-mail: a.abilmagzhanov@atameken.kz, phone 8 (7172) 919-359.