Since 12^th of August this year, purchase, storage and sale of unmarked products made of natural furs in Kazakhstan is banned

This means that it will be impossible to buy a fur coat without a chip that identifies the manufacturer. These are the conditions of the agreement ratified between EAEU countries on the labeling of light industry products. The purpose of marking is to bring the market of fur products "out of the shadow". According to market participants, today the volume of gray economy in this area is about 70-85% - anyone can import expensive fur products today from anywhere. With the introduction of chips, the tax authorities are hoping not only to prevent counterfeiting, but also to replenish the budget.

Is Kazakh fur business ready for such innovations? Will the introduction of labeling eliminate the import of contraband from neighboring countries? And how these measures will affect the end-user?

According to the president of the Association of Light Industry Enterprises of Kazakhstan Lubov Khudova, under the current system of the import of goods into the Republic of Kazakhstan, the assumption that the introduction of a labeling system will not reduce the flow of contraband and substandard products. "First of, this labeling has nothing to do with the quality of the product, and as for smuggling, we put pressure only on the legal manufacturers, and no more. This measure is ineffective and will not lead to a decrease in the flow of contraband, it won’t improve the quality of the smuggled fur products", - she said. According to Khudova, textile and light industry of the Republic of Kazakhstan covers the needs of the domestic market only by 14%.

"Most of the products are imported, and most of it is counterfeit and contraband. In the domestic market there is no control over the products of light industry, in particular, the observance of the norms of the technical regulations of the Customs Union CU TR 017/2011 "On safety of light industry products" (hereinafter - CU TR 017/2011), approved by the Decision of the Customs Union Commission dated by 9^th of December 2011 number 876. The real help to the industry could be such measures as termination of "cargo transportation" and their types (economic operators) without declaring, termination of carriage of weight by individuals in a simplified manner without the declaration, establishment of testing laboratories for the control of imported products", - said the head of the Association of light industry enterprises of Kazakhstan.

How ready is Kazakhstani business for the implementation of the project, what are the possible consequences?

By answering these questions, Lubov Khudova noted that "the position of the customs authorities is mandatory labeling of goods before crossing the border". "That is, the importer is obliged to label products at the factory overseas. That was proposed by the Commission (ECE-F) on the initiative of the Belarusian and Russian sides, it is, in fact, "electronic tax stamps" for each unit of goods, which at all phases of the promotion (from manufacturing to wholesale and retail trade) should pass the mark, resulting that a single server in the data base is gather all information about it. It is supposed to use the RFID radio frequency beacons for this. They are pasted on the product and at the time of the latest retail sales should be extinguished. That is all retail points would need to buy a special reading devices, through which the goods will be scanned, - explained the head of the association. According to her, this technology is commonly used by trading companies to monitor their goods in order to count. However, as it was noted by Khudova, nothing prevents to put such chips on counterfeit and contraband goods. "In Kazakhstan there is no factory for the production of labels and its construction is planned. Business is ready to buy a tag, but where? They are not here. It was supposed to provide all the importers and manufacturers with labels before April 1, 2016, but this did not happen. Business is torn, it does not know what to do. The Government of Kazakhstan does not solve the issue. The initiator of the discussion of the issue was the National Chamber of Entrepreneurs of Kazakhstan "Atameken", at the site of which the issue was discussed. But, alas, the authorities do not connect to this work", - said Lubov Khudova.

She also added that, according to the rules, the authorized body to ensure the development and putting into trial operation of IS "labeling" in accordance with the requirements approved by the Council of the Eurasian Economic Commission is the Ministry of Information and Communication of the Republic of Kazakhstan. Manufacturer of control (identification) signs which requires a special degree of protection (hereinafter - the first level of the Issuer) – is the Republican State Enterprise on the right of the economic right is "Banknote Factory of the National Bank of the Republic of Kazakhstan". Officers and implementers of the control (identification) signs (hereinafter - the second level of the Issuer) - a legal entity and (or) an individual entrepreneur, defined by the National Chamber of Entrepreneurs of Kazakhstan "Atameken" through competition. GS1 Kazakhstan – is Regional Association for Automatic Identification, which represents diversified international system of commodity numbering and bar coding standards.

According to the president of the Association of Light Industry Enterprises of Kazakhstan, duplicate labeling is burdensome both for business and for the state, since it assumes control not only on the border but also in the course of trade. "This will lead to the load on the budget and the creation of new conditions for corruption. Ultimately, all this will affect consumers who, of course, be expected to pay more ", - concluded Lubov Khudova.