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Russia Plans To Allow Imports Of Gray Goods To Ease Supply Chain Concerns

By News Creatives Authors , in Business , at March 30, 2022

Topline

Russia on Wednesday said it will allow imports of goods without trademark owners’ permission following the imposition of punishing economic sanctions on the country – and the withdrawal of many multinational companies from the Russian market – over its invasion of Ukraine.

Key Facts

Russian Prime Minister Mikhail Mishustin said in a government meeting Wednesday that the country would legalize “parallel imports,” often called “gray products,” to “satisfy the demand for goods,” according to the Russian state news agency RIA Novosti and Reuters.

The move comes as countries around the world have come together to impose sanctions to isolate the country and punish it for its invasion of Ukraine.

In the past, goods could not be imported to Russia without permission from the copyright holder, Mishustin said at a meeting of the commission on “improving the stability of the Russian economy under sanctions,” according to RIA.

Russia’s Ministry of Industry and Trade will approve a list of products from interested authorities, Mishustin said.

Russia said the new rule does not “mean the legalization of counterfeit goods,” but is about the “supply of original goods through alternative channels,” according to RIA.

Crucial Quote

“This approach will guarantee the shipment of goods to our country … in spite of the unfriendly actions of foreign politicians,” Mishustin said, according to Reuters.

Key Background

A parallel import, often called a “gray good,” is a non-counterfeit product shipped from another country without the permission of the copyright owner. The practice is legal in some countries and banned in others, according to the World Trade Organization. The goods are legitimate as they are manufactured by the brand owner, but sold outside normal distribution channels, often at discounted prices. Common gray market goods include high-priced items such as jewelry, perfume, cameras and watches. Russia in recent weeks had been contemplating allowing retailers to import goods without copyright permission, according to Reuters. The decision comes after hundreds of corporations—including Amazon, Ford Motor and Adidas—have shuttered their operations in Russia and ceased selling products there amid its invasion of Ukraine. Russia’s Federal Antimonopoly Service claimed the measure would “develop competition between brands through an increase in the number of businesses that import goods to Russia, which will lead to a decrease in retail prices for these goods,” according to Reuters. The body had already drafted regulations on parallel imports, Reuters said.

Further Reading

Spotify, Nestle, S&P Global Ratings—Here Are The Companies Cutting Ties With Russia Over Ukraine Invasion (Forbes)

Russia approves ‘parallel imports’ after top brands halt sales (Reuters)

Russia contemplates ‘parallel imports’ after top brands halt sales (Reuters)

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