Russia, a member of the BRICS club of emerging economies (Brazil, Russia, India, China and South Africa), with a GDP growth rate projected for this year of 4.5%, is among the most attractive growth markets for our businesses. Italy is, in fact, among the first commercial partners of the Russian Federation and Italian exports to the country, in the first eight months of this year, increased by 7.3% compared to the same period last year, according to data provided by the Ministry of Economic Development.
Among the growing sectors in Russia, those pertaining to the mechanical and manufacturing industry, design and engineering, construction and energy stand out; areas in which our companies are particularly competitive.
Newsmercati, in an interesting study conducted by the lawyers Diego Comba and Monica Rosano, proposed a focus on the main problems and procedures to be respected, concerning the contractual conditions in the sale and the certifications, which Italian exporting companies often find themselves having to deal in trade with Russia.
The sales contract templates submitted to our companies by their respective Russian counterparts are increasingly bilingual, Russian/English, and often require Italian companies to renegotiate and review certain contractual clauses, which would otherwise be excessively burdensome .
In order to identify the critical elements contained in the contract, companies should lend particular attention to the drafting of the text, especially of the parts where essential and unavoidable matters of the agreement are dealt with, such as: object of the sale and aspects relating to it (price, delivery terms, transfer of ownership); obligations of the parties (methods of payment, delivery and return terms, guarantees and penalties provided for in the event of non-compliance with the contract); discipline of the circumstances determining the termination of the contract and cases of force majeure; law applicable to the contract and identification of the competent court/arbitration court intended to settle any disputes deriving from the contract, as well as the prevailing language of the contract, if there are contrasts between the languages in which the text of the contract was drawn up.
Specifying these elements in the drafting of a sales contract exhaustively and with due diligence is of great importance. Fundamental is the choice of the law applicable to the contract and the competent court in the event of a disputeIndeed, the parties who do not specify these choices refer any disputes of a contractual nature to the applicable law and to the competent court identified by recourse to the rules of private international law, a procedure which can sometimes lead to non-optimal results, characterized by a dispute resolution ineffective and with uncertain outcomes.
In this regard, it should be noted that, like Italy, Russia has ratified the 1980 Vienna Convention on the International Sale of Goods (Convention on Contracts for the International Sale of Goods - CISG), i UNIDROIT principles on international contracts and has also adhered to the use of international rules specified by the Incoterms.
Nonetheless, it is preferable to include an arbitration clause rooted in Italy or in a third country in the contract, in order to avoid that the dispute arises in a country which disadvantages one of the parties. As regards the resolution of disputes, Russia stands out for its long and burdensome procedures, due to the lack of transparency of the legal system and the high bureaucracy. However, complications can also arise in the enforcement of an arbitration award issued outside Russia: for example, debt collection under the arbitration award may not be possible if the debtor Russian company has been liquidated or went bankrupt in the meantime. It is therefore advisable to protect oneself from these eventualities, making every effort to ensure that, in the drafting of the contract, secure forms of payment are expressly agreed upon from the outset.
For companies that export to Russia, another aspect of particular importance is certainly represented by the certifications. Most goods imported into Russia can be cleared through customs only if accompanied by appropriate certifications, including GOST R, a document that is issued by certification offices accredited by Gosstandart, a public body of the Russian Federation responsible for checking compliance with the quality standards of goods that are imported and exported to Russia.
The list of products, provided by Gosstandart, which by law must be accompanied by certification, includes: goods intended for the person, medical instruments, agricultural and food products, biological veterinary preparations, articles intended for mechanical and light industry , electrical and electronic products, raw material processing and wood, pyrotechnics and packaging.
Il Federal Customs Service of Russia and the Federal Agency for Technical Regulation and Metrology (Rostekhregulirovaniye) are the competent authorities in charge of verifying the conformity of the certifications and, in the absence of certification, are also entitled to the seizure of the goods.
To achieve certification, the exporting company must first of all identify the interlocutor to whom to address the application for certification, i.e competent Russian authorities or local representatives authorized by Rostekhregulirovaniye to issue GOST R conformity certification.
Once the type of goods has been classified on the basis of the characteristics and the brand, the company is required to produce the necessary documentation and to submit product samples to tests, conducted by laboratories accredited by Gosstandart, which ascertain their compliance with the standards established by the legislation in force in Russia.
In addition to technical assessments of the product, sampling and analysis at authorized laboratories, inspections are also planned at the manufacturing company and, in some cases, the certification body may deem it appropriate to carry out checks on the company's quality management system exporter and impose disclosure and product labeling obligations.
A company trading with Russia can apply for separate certificates of conformity based on the volume of its exports to the country: existIn fact, separate certifications depending on whether they refer to a single export or to mass production; in the latter circumstance, depending on the type of product, the validity of the certificate can be extended to 12 months – 3 years.
Once the compliance of the product with the required standards has been ascertained, the GOST R certificate is issued to the company, which specifies some essential elements of the certified goods, such as: product category, production brands, product types and respective customs codes, name of the producer and of the applicant for the goods in question, validity of the certification issued and signature of the inspector who ascertained its compliance with the regulatory standards in force in the country.
In order to clear the products through customs, the certification must be shown, together with the cargo customs declaration, to the official in charge of verifying, upon arrival of the goods at customs, the correspondence of the customs codes with the respective certification.
The GOST R can also be requested during checks carried out by the competent Russian authorities directly on the market.
