The government expands expertise in classifying industrial products as unparalleled in Russia

The White House is expanding its expertise in classifying industrial products as unparalleled in the Russian Federation. Along with organizations under the jurisdiction of the Ministry of Industry and Trade, specially created non-profit organizations (NPOs) will also be able to conduct it – the ministry explains this by increasing the load on experts. In addition, the criteria for classifying products as unique are specified, which should exclude a formal approach to evaluation. Business, however, is afraid of subjectivity on the part of expert organizations, on the conclusion of which depends access to state support for both manufacturers of unique products and consumers of critical imports.

Prime Minister Mikhail Mishustin signed Government Decree No. 980 dated June 14, 2023 — it changes several significant positions in the procedure for classifying industrial products as having no analogues in the Russian Federation (it is regulated by Government Decree No. 1135 dated September 20, 2017). The activity of the government is explained by the intentions to expand the industrial sector of the Russian Federation to the production of a wide range of substitutes for critical imports, which are not currently produced in Russia, and their import is complicated; in particular, we are talking about avionics, the automotive industry, electronics, precision engineering, etc.

In particular, a specially created NPO will now be able to act as an expert organization – previously only five organizations subordinate to the Ministry of Industry and Trade could perform these functions. At the same time, expert organizations will be required to have a testing laboratory, center, testing ground or engineering center – until now, it was enough for them to be accredited as a certification body and a testing laboratory. The new requirement, we note, fits into the logic of the recently approved Concept of Technological Development of the Russian Federation until 2030, which requires, among other things, the widespread use of reverse engineering (research of someone else’s product in order to recreate its structure). The Ministry of Industry and Trade explained the updated requirements of Kommersant with a significant increase in the number of applications for examination, and the creation of specialized NGOs with the need to offset the negative consequences due to the logistical difficulties of importing critical imports, and as a result, the need to expand the list of expert organizations. In 2022, experts subordinate to the Ministry of Industry and Trade issued more than 130 opinions on the absence of analogues to more than 50 applicants.

It should be noted that expert opinions are necessary to obtain state support, both by producers of unique industrial products and by customers of critical imports (for example, wine producers are subsidized part of the costs of agricultural equipment, the participation of hardware and software systems and software in the register of domestic software gives a number of preferences to development companies , and importers can receive exemption from taxation when importing scarce items of industrial nomenclature into the Russian Federation). Also, in some cases, the document is provided at the conclusion of a special investment contract (SPIC) to confirm the uniqueness of the project.

“Since many types of industrial products are not produced in Russia (especially modern technological equipment for the production of products), the presence of such an opinion will speed up the implementation of some investment projects,” says Maxim Tretyakov, head of the Opora Rossii committee for industry. He, however, is afraid of the subjective approach of experts who make decisions about the uniqueness of products based on their own assessment of the degree of superiority of the characteristics of imported equipment over the available Russian counterparts – in the document “it is impossible to prescribe the entire set of analyzed characteristics and the desired degree of their superiority.” Vladislav Varshavsky, Managing Partner at Varshavsky & Partners Law Firm, notes that although the examination process itself has not undergone any fundamental changes, the changes made focus not on parameters, but on the performance of the same functions by products and the ability to be commercially interchangeable. “This should make it possible to protect the Russian manufacturer as much as possible, eliminating the formal approach in the form of non-compliance of product parameters in the assessment,” he says. In this regard, we note that the amendments contain a clarification – “the qualitative characteristics of the product parameters do not relate exclusively to the appearance of the product and significantly affect the functional purpose.”

De facto, however, in the approved structure, access to state support will be determined by experts, and not by demand from buyers, which may lead to a repetition of the situation that the government has already gone through in its attempts to establish import substitution after the sanctions caused by the annexation of Crimea to the Russian Federation in 2014. At that time, the lists of promising products needed for the implementation of investment projects and the tightening of control over their imports were also discussed at the White House, but this activity was not very successful.

Venera Petrova