The Federal Anti-monopoly Service of Russia (FAS) has prepared a draft federal law*, which amends the Civil Code to legalise parallel imports into Russia. The amendments will come into force in 2021 and allow the Russian government to authorise the import of certain types of goods without the permission of the owner of the brand for up to five years.
The term “parallel imports” means the free importation into Russia of original and trademarked products without the permission of the trademark owner. In this case, goods are imported not by the rights holder, its authorised importers or official distributors, but by other entities or individuals. According to current Russian legislation, parallel imports are considered a violation of trademark exclusive rights and are not allowed.
The FAS has long been trying to change this principle. Back in 2016, representatives of the anti-monopoly authority declared* that they were planning to legalise parallel imports for certain categories of goods, such as pharmaceuticals, car parts, children’s products and others. In the summer of 2017, the FAS continued to work in this area and issued warnings* to well-known carmakers for unreasonably restricting the importation of goods under their brands by entrepreneurs who were not their official dealers. These restrictions were found to be a violation of anti-monopoly laws.
In February 2018, the Russian Constitutional Court actually authorised* the importation of original goods without the consent of a rights owner under certain conditions, such as if the rights owner abuses its exclusivity in respect of a trademark by imposing restrictions on the importation of goods into the Russian market, or deliberately and unreasonably overprices its products.
In accordance with the new bill, from 1 January 2021 the Russian government will have the right to temporarily permit the import of certain categories of goods for a maximum of five years. Currently, it is not known which categories of goods will fall within the scope of the regime of temporary parallel imports.
However, the bill already provides for four situations in which the Russian government will be able to allow temporary parallel imports:
- if goods are not available on the Russian market;
- if imported goods are available on the market, but their quantity is insufficient;
- if the quality of goods available in Russia differs from that of similar goods sold abroad; or
- if imported goods are sold in Russia at inflated prices.
Rights owners should bear in mind the current trend under which parallel imports into Russia could be legalised. It is advisable to keep an eye on legislative initiatives in this field and adjust corporate policies regarding the import of products into the Russian market in light of the anticipated legal developments. CMS Russia will continue to monitor and report on legislative initiatives in this area.