Marking is introduced by KPI – Newspaper Kommersant No. 160 (7361) dated 09/01/2022

The government has approved key performance indicators (KPIs) of the product labeling system, as well as the work of government agencies with it. Among them are the share of counterfeit products and the annual legal turnover in various markets, potential damage to the budget, as well as the activity of officials when using the functionality of the system and the degree of its integration with the databases of government agencies. It is expected that this will allow to see a more complete picture of the market, improve the risk-based approach and reduce the administrative burden on honest business.

As part of the systematization of the long-term fight against counterfeiting, the government approved the KPI for the product labeling system being rolled out in the Russian Federation. Recall that it involves the application of identification means to certain goods (fur products, medicines, tobacco products, shoes, etc.) with subsequent processing of the data obtained in the form of a digital market model. As follows from the order published yesterday, the White House has so far outlined only general guidelines for its use – specific annual indicators should be prepared by departments by September 15 and published by the Ministry of Industry and Trade by October 1.

The KPI will be taken as the financial effects of the introduction of labeling: the volume of the annual legal turnover of labeled products, the share of counterfeit products in this market, the accrual of excise duties, and potential damage to the budget. The scaling of the labeling system itself will also be taken into account: the number of users, services for the state and information for consumers, as well as the share of manufacturers and importers who regularly use information about their own or imported products. However, we note that the achievement of the latter indicator may be complicated due to sanctions – the other day, the Ministry of Industry and Trade prepared a draft government decree that provides for the temporary exclusion of the right holders’ access to information about goods imported under the parallel import regime.

Separately, the order provides for KPIs for government agencies working with the labeling system. Among them is the share of considered appeals received through the labeling system, the number of risk indicators and an increase in the share of potential violations considered by officials identified by the system. The assessment will also depend on the further integration of the labeling system with other state information systems. For now, the FAS, the Ministry of Industry and Trade, the Ministry of Agriculture, the Ministry of Digital Transformation, the Federal Customs Service, Roszdravnadzor, Rosalkogolregulirovanie, Rosprirodnadzor and Rosselkhoznadzor will apply KPIs. It should be noted that until now the problem of assessing the scale of the counterfeit market has been associated not only with the fact that this is a shadow sector, but also with the fragmentation of data (see “Kommersant” dated March 11, 2021).

As Kommersant was told at the Center for the Development of Advanced Technologies (system operator, CRPT), the marking system is now integrated with 16 authorities, which sent more than 6.3 million requests in January-July 2022, which is 267% higher than in 2021. “The approval of the KPI will increase the intensity of data use by government agencies, reduce the response time to requests and increase the effectiveness of public control,” the center believes. So, they add to the CRPT, this year a project was launched to provide business with data on violations automatically detected by the system, after which their number was halved. In general, the CRPT expects that the introduction of KPIs will lead to an increase in the quality of data in the system, which will allow forming a more complete picture of the market.

The Ministry of Industry and Trade also adds that the introduction of KPIs “will be able to guarantee the timeliness and completeness of consideration of the accumulated information by state bodies, their use of a risk-based approach in control activities.” For legal participants in the turnover, the department assures, the administrative burden will decrease. Elena Razumova, adviser to the president of the CSR, notes that the document provides for “procedures for an alternative assessment of the system’s performance” – as a result, statistical data will be accumulated by government agencies, and in the future, decision-making on finalizing the system will be more justified.

Evgenia Kryuchkova