Huge illegal trade in Russia

About 35-40 percent of tobacco products sold on the Russian market are illegally produced, the Russian business ombudsman Boris Titov said in an annual report to the Russian president.

The report was the subject of a story in Russia Beyond The Headlines quoting TASS.

According to the most cautious estimates, the share of illicit products had already reached 35-40 percent, which had dealt a serious blow to the budget of the Russian Federation, the report said.

The report expressed concern also about the ‘quality’ of the illicit products.

The business ombudsman suggested creating a unified state mechanism to control the tobacco market, similar to the Unified State Automatic Information System (EGAIS) for alcohol products, developed by the Department for the State Regulation of the Economy and the Ministry of Economic Development and Trade.

This computerized system gathers information about the use of raw materials, such as ethyl alcohol and other related products, as well as production volumes and left-over raw materials.

Under the Russian law, all manufacturers, wholesalers and importers must register with EGAIS.

The Russian Finance Ministry said earlier that legislation enabling a similar control mechanism on the tobacco market was to be passed during the parliament’s spring session.

The government is said to be discussing various projects aimed at enhancing state control of the tobacco industry at all stages of its manufacturing and trade.