Starting July 1, 2020, Government Resolutions of the Russian Federation No. 860 dated 05.07.2019 and No. 216 dated 29.02.2020 come into force. In accordance with these documents, all footwear sold in Russia, except for samples, must be labeled with a unique digital code encoded as a two-dimensional Data-Matrix barcode.
Government resolutions regulating footwear labeling
- Government Resolution of the Russian Federation No. 860 of July 5, 2019 approving the rules for labeling footwear products
- Government Resolution of the Russian Federation No. 216 of February 29, 2020 on amendments to the Resolution of July 5 No. 860
- Instructions for registering a market participant in the State Information System for Monitoring the Circulation of Goods (hereinafter – GIS MT)
- Step-by-step user guide for working in the labeling system
Why footwear labeling is needed
Labeling will allow the state and consumers to trace the path of each pair of shoes intended for sale within the country by the Data-Matrix code, from manufacture or import to the point of sale. This will help more effectively combat counterfeiting and smuggling, protect legitimate businesses and consumers, and improve tax collection.
Which footwear must be labeled
According to Government Resolution No. 860 of July 5, 2019, footwear products subject to labeling are defined by the following commodity classification codes:
- TN VED EAEU: 6401, 6402, 6403, 6404, 6405
- OKPD2: 15.20.11, 15.20.12, 15.20.13, 15.20.14, 15.20.21, 15.20.29, 15.20.31, 15.20.32, 32.30.12
Who issues labeling codes, stores the data and tracks the path (circulation) of labeled footwear
The circulation of footwear in Russia is monitored by the State Information System for Monitoring the Circulation of Goods (GIS MT), created by the Center for the Development of Advanced Technologies (CRPT) and implemented in the digital platform «Honest Sign». The service allows registration of market participants in the footwear turnover, records data for each pair of shoes, generates Data-Matrix codes, and tracks all stages of movement of footwear from the manufacturer/importer to the consumer.
How footwear is labeled
Footwear is labeled using a two-dimensional machine-readable Data-Matrix barcode. Unlike the familiar one-dimensional barcode made of vertical stripes, the Data-Matrix code is more compact, square-shaped, and contains more encoded information. Data-Matrix codes are also referred to as "means of identification" (hereinafter — MI). They can be printed on standard printers, affixed to the packaging, product label or the product itself as stickers, or applied typographically.
What the labeling can tell
Information on the means of identification (MI) can be read using a regular smartphone with the «Honest Sign» application installed. You will receive information about who the importer or manufacturer of the product is, what materials the product is made from, whether it has been introduced into circulation, and who is the owner of the footwear at the time of scanning the code. This information is sufficient to be confident that the product is legal and safe.
Organization of the process for tracking the circulation of labeled footwear
Participants in the circulation process of labeled footwear intended for subsequent sale:
- footwear manufacturers;
- importers;
- retail and wholesale sellers.
Attention! A retail buyer or a legal entity purchasing footwear for their own needs or for employees of their company is not considered a participant in the circulation process of labeled footwear.
Registration in the «Honest Sign» system is a mandatory requirement for all participants in the circulation of labeled products.
Circulation of labeled footwear when selling to legal entities/individual entrepreneurs in Vostok-Service stores
1. Participants in the circulation of labeled footwear register in the «Honest Sign» system, order a digital labeling code and apply it to the footwear.
2. The applied code records the entire path the pair of shoes takes from the factory to the buyer, from introduction into circulation to withdrawal from circulation.
3. At the time of sale, the buyer must notify the seller whether it is necessary to withdraw the product from circulation. Products are withdrawn from circulation if the special footwear is provided free of charge for your enterprise's needs. Products are not withdrawn from circulation if they are intended for further resale, including to contracting organizations. The last seller in the chain is responsible for withdrawing the product from circulation.
Circulation of labeled footwear when selling to individuals in Vostok-Service stores
1. Participants in the circulation of labeled footwear register in the «Honest Sign» system, order a digital labeling code and apply it to the footwear.
2. The applied code records the entire path the pair of shoes takes from the factory to the buyer, from introduction into circulation to withdrawal from circulation.
3. At the point of sale, the code is scanned at the checkout and information about the product's withdrawal from circulation is transmitted to the system.
Return of purchased footwear
Return of footwear from the buyer to the seller is carried out:
- by an individual (not a participant in the footwear circulation) — in accordance with the Russian Federation Law "On Protection of Consumer Rights". Size exchanges are also processed via a return of the purchase, regardless of the preservation and readability of the Data-Matrix;
- by a legal entity/individual entrepreneur (not a participant in the circulation) — based on return documents;
- by a legal entity/individual entrepreneur (participant in the circulation) — through the state labeling system (reverse sale).
For legal entities: answers to frequently asked questions about labeling
Who will check the sale of labeled products in stores?
Enforcement of Government Order No. 792-r dated 28.04.2018 is carried out by supervisory authorities (Rospotrebnadzor, the Federal Tax Service).
Will institutions purchasing footwear for their needs be considered participants in the circulation?
If footwear is purchased for internal needs, the buyer must inform the seller at the time of purchase so that the seller withdraws the labeling codes from circulation. In this case, the end consumer will not be considered a participant in the circulation.
Is labeling required if movement occurs within the same organization?
Reporting on the movement of footwear within a single tax ID (INN) is not provided. If you move footwear between different legal entities within one holding, the footwear must be labeled.
Can counterfeit goods be labeled?
Checks will be carried out to verify the conformity of the goods and their description with the certificate of conformity.
Can the same labeling code be applied both to the pair and to the box for that pair?
No, it is permissible to apply the code either to the pair, or to the box, or to the product label.
What to do in case of assortment mix-up? For example, different color or size?
You must re-label the product (order the correct labeling codes for the footwear items).
Is it possible not to label every pair of shoes and instead have a single collective label?
Each pair is labeled with a unique code. When selling goods, it is possible to aggregate several individual codes into one common aggregated code, which simplifies the shipping and receiving process.
Should the labeling code be present in UPD (universal transfer documents), invoices (TORG-12) and invoices?
In the UPD via EDO (electronic document flow) — yes.
Can I resell shoes in my store if I bought them as a retail customer and the seller withdrew the labeling code from circulation?
No, you cannot.
What does "Connect to EDO" mean?
"Connecting to EDO" means subscribing to a service that provides online exchange of electronic documents between organizations. To do this, you need to enter into an agreement with an official operator of such a service (an electronic signature (KEP) will be required). Connecting to EDO is not necessary for labeling existing stock, but it is mandatory for receiving goods from suppliers via EDO.
Is EDO for convenience or mandatory?
In 2020–2021 electronic document flow is mandatory when trading labeled goods. When purchasing them from a supplier, you must accept documents using EDO: this is a legal requirement.
If you do not trade labeled goods, EDO is not mandatory for you: it will simply make your workflow more convenient — you won't need to send documents by mail, wait or stand in queues.
From what moment must labeling codes be transmitted via EDO?
Labeling codes must be transmitted via EDO from the moment the requirements of the mandatory labeling resolutions come into effect. For footwear, for example — from July 1, 2020.
Information about withdrawal must be sent within 3 days, how much time is given to accept and confirm the goods?
According to Government Resolution No. 860 of 05.07.19, when transferring (accepting) footwear goods within transactions involving transfer of ownership, as well as under commission or agency agreements, the participant carrying out the shipment (acceptance) must generate a transfer (acceptance) notification in the form of a universal transfer document indicating the type of transaction, sign it with an enhanced electronic signature and submit it to the «Honest Sign» system within 3 working days from the date of shipment, transfer or acceptance, but no later than the day the goods are transferred to third parties.
What if the means of identification are damaged during delivery or storage in the warehouse?
If the labeling code is damaged during storage or transportation, such goods must be re-labeled (withdraw the damaged code and register a new one).
How to process returns of labeled goods to the supplier?
Based on primary documentation, you submit information about the returned goods to the system, after which the receiving party must accept the goods.
How to label a used item returned by a buyer that needs to be returned to the supplier?
If the labeling code (LC) is not damaged upon return, re-labeling is not required. If MI cannot be identified, a re-labeling process must be conducted.
How will write-offs for defects be handled?
You must send a message to the «Honest Sign» system about withdrawing the footwear from circulation indicating the reason for the write-off.
For individuals: what you need to know when buying footwear in a store
1. A buyer in a store is not a participant in the circulation of workwear or footwear products. Therefore, at the time of sale the seller must scan the MI, transmit the information contained in the MI via the online cash register to the unified operator of the labeling and traceability system and provide the buyer with the product with the code already "deactivated", withdrawn from circulation.
2. If within 14 days the buyer decides to return the product to the store, the seller is obliged to accept it. The buyer should, if possible, preserve the DATA-MATRIX barcode on the product or packaging, as this will allow the seller to return the product to circulation without major difficulties. If the barcode is not preserved, it will be extremely difficult for the seller to identify the specific pair in the general circulation. After 14 days the product cannot be returned to the store.
3. If you go to the store, scan the MI with your smartphone and see that this set of clothing (or pair of shoes) at this time should be in another city or with another seller, or that such a code does not exist at all, then it is highly likely you are dealing with counterfeit. In this case, you can send information to the unified operator of the labeling and traceability system using a special smartphone application, and an unscheduled inspection will be carried out at the retail outlet.
4. If you purchased products for yourself or family members while on holiday or on a business trip abroad, such items do not need labeling. You will pass through the customs green corridor without issues. The same applies to samples for exhibitions or demonstrations to a potential client. But if you decide to display a sample in the sales area, it will then require MI labeling.
5. If you purchase special footwear for the employees of the enterprise where you work, you must inform the seller. In this case, the seller must process all items you purchase through the cash register to withdraw the MI from circulation. If the purchase is wholesale via cashless payment, you must inform the seller that you ask them to "deactivate" the MI on your behalf, otherwise the system will show that your organization has labeled light industry products with "pending", non-deactivated MI. Since the labeling system requires that seller and buyer reflect the movement of labeled goods in the system within three days, you automatically become a violator of the law, which may lead to an unscheduled inspection of your enterprise.
6. A common question is how labeling will affect product prices. Generating a labeling code costs 50 kopecks excluding VAT per code, so the presence of MI will not significantly affect product prices.
The labeling and traceability system launched by the state several years ago has proven effective, has reduced counterfeiting, helped increase tax collection, and therefore will continue to expand.