Bases of trade activities state regulation

On February 01, 2010 there came into force Federal Law No. 381-FZ as of December 28, 2009 “On bases of trade activities state regulation in the Russian Federation”.

This law governs relations arising between state bodies, local authorities and business entities in connection with organization and carrying out of trade activities as well as relations arising between business entities when trade activities are carried out by them.

The food marketing issues are most thoroughly regulated.

The law provides for the Government of the Russian Federation’s authority to establish maximum permissible retail prices for socially important food products in case that the prices growth is at least 30% within 30 days.

There has been established a limit size of remuneration to be paid by a supplier to a trade company for reaching certain volume of sales. It makes up 10% from the price of food products purchased by a business entity carrying out trade activities. In this case remuneration cannot be paid for acquisition of socially important food products the list of which is to be approved by the Government of the Russian Federation. The contract between a supplier and a trade company cannot include terms and conditions on other types of remuneration to be paid to the latter.

The legislator established time-limits for settlements between trade companies and suppliers of food products which depend on products’ shelf life.

A supplier of food products and a trade company can conclude a separate agreement of paid advertising, marketing and other promotional services. However, it is prohibited to make conclusion of a supply contract dependent on conclusion of a paid services agreement.

The legislator established that at least 60% of non-stationary trade objects shall be used by small- and medium-scale business entities. However, it is not a norm of direct effect and requires that quite a number of by-laws be adopted.

A number of anti-trust regulations for business entities carrying out trade activities and business entities supplying food products have been established.

Particularly, it is prohibited to include into contracts a term on return of goods not sold upon expiry of a certain period; it is prohibited to carry out wholesales using a commission agreement or a mixed agreement containing elements of a commission agreement.

A prohibition for a distribution network the share of which exceeds 25% from the volume of all sold food products in monetary terms for the previous financial year within the boundaries of the Russian Federation entity, including within the boundaries of Moscow or Saint Petersburg, within the boundaries of a municipal region, an urban district to acquire or to lease additional trade facilities has been introduced.

A number of antimonopoly requirements to state authorities of the Russian Federation entities and local authorities have been established. In particular, they are prohibited to demand rechecking products quality, certification and accreditation of trade facilities not provided for by federal laws.

The law provides for formation of trade registers in the entities of the Russian Federation. Trade registers will include information on trade companies, suppliers and on the state of trade in the territory of relevant entities of the Russian Federation. Although a legislator has prohibited to force trade organizations and suppliers to include information on them into a trade register but it can be supposed that trade activities of organizations which have not provided information on themselves to be included into a trade register will be significantly impeded.