On June 26, 2018 the Russian Federation Government adopted its Resolution No. 732 on Amendments to the Rules for Reporting by Legal Entities on Activity Related to the Distribution of Narcotic Drugs and Psychotropic Substances ("Resolution 732").
Since July 7, 2018, when Resolution 732 entered into force, entities circulating substances that are under international control but are not on the government-approved lists1 of narcotic drugs, psychotropic substances and their precursors (the "List") have been required to comply with the rules for maintaining and filing new types of reports.
For example, in addition to the existing obligation to submit reports on activity related to distribution of narcotic drugs, psychotropic substances and their precursors, legal entities, including pharmaceutical manufacturers, must now submit additional reports on activity related to distribution of substances that are under international control as per the 1971 Convention on Psychotropic Substances2 ("IC Substances") that are not on the List.
Under the new regulation, data are submitted converted into the active ingredient in two new reports:
- On the quantity of IC Substances manufactured and data about existing stock and manufacturing plans (Form 2-PLS)
- On the quantity of imported/exported IC Substances (Form 2-VV)
The Form 2-PLS report needs to be submitted to the Ministry of Industry and Trade of the Russian Federation annually as at December 31 of the reporting year, but by February 15 of the year following the reporting year, and the Form 2-VV report needs to be submitted quarterly by the 20th day of the month following the reporting period.
These reports will then be consolidated by the regulator and sent to the Ministry of the Interior of Russia and the Ministry of Health of Russia, and the latter will determine the Russian Federation's needs for narcotic drugs and psychotropic substances, as well as IC Substances for the next year on their basis. The Ministry of the Interior of Russia will monitor compliance with the rules for distribution of IC Substances.
Other rules for generating and submitting reports on activity related to the distribution of narcotic drugs and psychotropic substances and their precursors remain unchanged. It should be noted that legislators have not yet made any special changes to the Russian Federation Administrative Offenses Code on violation of the rules for the distribution of IC Substances. The applicable Article 6.16 of the RF Administrative Offenses Code still covers only issues of the distribution of narcotic drugs and psychotropic substances and their precursors that are on the List.
Nevertheless, it seems that until the relevant amendments are made to Article 6.16 of the RF Administrative Offenses Code, penalties for failing to submit or for late submission of reports and providing incomplete or distorted information about IC Substances can be set under the current Article 19.7 of the RF Administrative Offenses Code "Failure to Submit Information." That article provides for fines of up to RUB 500 on officers and up to RUB 5,000 on legal entities.
Furthermore, failure to comply with the requirements of law, including relating to the distribution of IC Substances, can result in an unscheduled inspection of the legal entity by the relevant control bodies.
Dentons' team provides legal support to manufacturers of medicines and medical devices on issues of the circulation of narcotic drugs, psychotropic substances and their precursors, advises on the distribution of substances under international control, does due diligence of manufacturers for their compliance with various industry prohibitions and restrictions, and develops recommendations to mitigate and eliminate the risks found.
Footnotes
1. List of Narcotic Drugs, Psychotropic Substances and their Precursors Subject to Control in the Russian Federation approved by Russian Federation Government Resolution No. 681 of June 30, 1998.
2. The document entered into force for the USSR on February 1, 1979 (and is valid for the Russian Federation as the successor state to the USSR).
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