The Russian Federal service for supervision of natural resources will perform unscheduled audits of companies that disposed of waste in 2020
Pepeliaev Group advises that the deputy Chairman of the Russian Government Viktoria Abramchenko has instructed the Russian Federal Service for Supervision of Natural Resources (the “Federal Service”) to carry out unscheduled field audits of legal entities and individual entrepreneurs who in 2020 disposed of waste from the use of goods based on agreements concluded with producers and importers of goods and packaging.
The unscheduled audits will take place in the period between 1 October 2021 and 1 November 2022.
As part of such audits the Federal Service will analyse how producers and importers of goods and packaging (the “producers and importers”) complied with the disposal standards in 2020 and assess whether the disposal companies meet the licensing requirements for activity involving dealing with waste of hazard classes I-IV.
The Federal Service will also check whether other compulsory requirements are met with respect to environmental protection that are set out in permission documents and environmental legislation.
The principal purpose of the control measures is to determine whether the producers and importers have actually performed the obligations to dispose of 10%-45% of the products released into circulation in 2020.
Please be reminded that the producers and importers of a number of goods and packaging[1] must ensure that the established standards are met relating to the disposal of waste from the specified goods and packaging released into circulation that have lost their consumer properties[2]. The Federal Service carries out supervision of the performance of the above obligation.
According to Federal Law No. 89-FZ “On production and consumption waste” dated 24 June 1998, producers and importers may choose one of four methods to ensure that the disposal standards are met[3]:
To confirm the disposal, the parties to the agreement sign a waste disposal certificate which, as well as the agreement, may be requested by the Federal Service with a view to checking the reports on compliance with the established disposal standards[4].
The Federal Service has claimed on multiple occasions that the supporting documents that the producers and importers submit to the regulator often contain distorted information about waste disposal. Thus, the amount of the waste disposed of that is specified in the disposal certificates sometimes substantially exceeds the capacities of waste disposal companies.
When carrying out audits of waste disposal companies, the Federal Service will identify discrepancies between the data that the producers and importers of goods provide in their reports on compliance with the waste disposal standards and the data in the documents of disposal companies.
The Federal Service has been instructed to report on the final audit results before 1 December 2022 and on the interim results in December 2021 and in June 2022.
Following the audits the Federal Service may cause administrative liability to be imposed on importers and producers for submitting reports on compliance with the disposal standards that contain inaccurate data[6].
It should be taken into account that the maximum amount of an administrative fine imposed for a relevant violation is not limited, since it is calculated depending on the amount of the environmental fee relating to each group of goods and group of packaging with respect to which the producer/importer has not ensured disposal of the waste.
In addition, when it has been identified that the reports submitted are inaccurate the Federal Service may apply to the court to seek recovery from the producer/importer of the environmental fee that it was obliged to pay for non-compliance with the disposal standards.
The companies subject to being audited should be already now starting to prepare for audits by analysing their business processes and making a list of requirements of the legislation concerning waste and environmental legislation which their activity should meet. Further, a compliance check should be performed with regard to the specified requirements and the violations identified should be eliminated, if possible.
In order to prepare for the audits one may use the checklist forms (lists of control questions) that the Federal Service uses when exercising state supervision[7].
Also, it should be taken into account that, according to the general rule, the Federal Service must inform a company that is to be audited about the unscheduled field audit no later than 24 hours before it starts (by sending a copy of the decision to hold the field audit)[8].
[1] At present Directive No. 3721-r of the Russian Government “On approving the lists of goods and packaging subject to disposal after they lose their consumer properties” dated 31 December 2020 determines the lists of relevant goods and packaging.
[2] Directive No. 3722-r of the Russian Government “On approving the disposal standards for waste from the use of goods for 2021” dated 31 December 2020.
[3] Article 24.2 of Federal Law No. 89-FZ “On production and consumption waste” dated 24 June 1998.
[4] Clause 14(b) of the Rules for producers and importers of goods to file reports on compliance with disposal standards for waste from the use of goods, approved by Resolution No. 2010 of the Russian Government dated 3 December 2020.
[5] See for example, https://www.pnp.ru/economics/za-proizvodstvo-upakovki-predlozhili-vzimat-ekosbor-kak-za-gotovyy-tova....
[6] Article 8.5.1 the Russian Code of Administrative Offences.
[7] https://rpn.gov.ru/activity/supervision/test-reports/.
[8] Article 73(6) of Federal Law No. 248-FZ “On state control (supervision) and municipal control in the Russian Federation” dated 31 July 2020.
The unscheduled audits will take place in the period between 1 October 2021 and 1 November 2022.
As part of such audits the Federal Service will analyse how producers and importers of goods and packaging (the “producers and importers”) complied with the disposal standards in 2020 and assess whether the disposal companies meet the licensing requirements for activity involving dealing with waste of hazard classes I-IV.
The Federal Service will also check whether other compulsory requirements are met with respect to environmental protection that are set out in permission documents and environmental legislation.
The principal purpose of the control measures is to determine whether the producers and importers have actually performed the obligations to dispose of 10%-45% of the products released into circulation in 2020.
Please be reminded that the producers and importers of a number of goods and packaging[1] must ensure that the established standards are met relating to the disposal of waste from the specified goods and packaging released into circulation that have lost their consumer properties[2]. The Federal Service carries out supervision of the performance of the above obligation.
According to Federal Law No. 89-FZ “On production and consumption waste” dated 24 June 1998, producers and importers may choose one of four methods to ensure that the disposal standards are met[3]:
- to dispose of waste independently by arranging their own waste disposal facilities;
- to conclude an agreement with an operator that manages solid municipal waste, or with a regional operator, an individual entrepreneur or a legal entity that disposes of waste;
- to conclude an agreement with the not-for-profit company Russian Environmental Operator or an association established by producers and importers for the purpose of ensuring that the disposal standards are met.
- to pay the environmental fee.
To confirm the disposal, the parties to the agreement sign a waste disposal certificate which, as well as the agreement, may be requested by the Federal Service with a view to checking the reports on compliance with the established disposal standards[4].
The Federal Service has claimed on multiple occasions that the supporting documents that the producers and importers submit to the regulator often contain distorted information about waste disposal. Thus, the amount of the waste disposed of that is specified in the disposal certificates sometimes substantially exceeds the capacities of waste disposal companies.
When carrying out audits of waste disposal companies, the Federal Service will identify discrepancies between the data that the producers and importers of goods provide in their reports on compliance with the waste disposal standards and the data in the documents of disposal companies.
The Federal Service has been instructed to report on the final audit results before 1 December 2022 and on the interim results in December 2021 and in June 2022.
Following the audits the Federal Service may cause administrative liability to be imposed on importers and producers for submitting reports on compliance with the disposal standards that contain inaccurate data[6].
It should be taken into account that the maximum amount of an administrative fine imposed for a relevant violation is not limited, since it is calculated depending on the amount of the environmental fee relating to each group of goods and group of packaging with respect to which the producer/importer has not ensured disposal of the waste.
In addition, when it has been identified that the reports submitted are inaccurate the Federal Service may apply to the court to seek recovery from the producer/importer of the environmental fee that it was obliged to pay for non-compliance with the disposal standards.
What to think about and what to do
In order to avoid administrative liability and claims to pay the environmental fee, we recommend that the producers and importers should exercise due care and caution when selecting a disposal company, monitor its operations and form the evidence base in advance that will confirm that that the disposal company has actually disposed of the waste.The companies subject to being audited should be already now starting to prepare for audits by analysing their business processes and making a list of requirements of the legislation concerning waste and environmental legislation which their activity should meet. Further, a compliance check should be performed with regard to the specified requirements and the violations identified should be eliminated, if possible.
In order to prepare for the audits one may use the checklist forms (lists of control questions) that the Federal Service uses when exercising state supervision[7].
Also, it should be taken into account that, according to the general rule, the Federal Service must inform a company that is to be audited about the unscheduled field audit no later than 24 hours before it starts (by sending a copy of the decision to hold the field audit)[8].
Help from your adviser
Pepeliaev Group’s specialists are ready to provide legal assistance to companies during unscheduled audits and audits of the documentation confirming waste disposal as well as when contesting the Federal Service’s claims to pay the environmental fee and resolutions to impose administrative liability.[1] At present Directive No. 3721-r of the Russian Government “On approving the lists of goods and packaging subject to disposal after they lose their consumer properties” dated 31 December 2020 determines the lists of relevant goods and packaging.
[2] Directive No. 3722-r of the Russian Government “On approving the disposal standards for waste from the use of goods for 2021” dated 31 December 2020.
[3] Article 24.2 of Federal Law No. 89-FZ “On production and consumption waste” dated 24 June 1998.
[4] Clause 14(b) of the Rules for producers and importers of goods to file reports on compliance with disposal standards for waste from the use of goods, approved by Resolution No. 2010 of the Russian Government dated 3 December 2020.
[5] See for example, https://www.pnp.ru/economics/za-proizvodstvo-upakovki-predlozhili-vzimat-ekosbor-kak-za-gotovyy-tova....
[6] Article 8.5.1 the Russian Code of Administrative Offences.
[7] https://rpn.gov.ru/activity/supervision/test-reports/.
[8] Article 73(6) of Federal Law No. 248-FZ “On state control (supervision) and municipal control in the Russian Federation” dated 31 July 2020.
Moreover, the number of employees of the Federal Service does not allow effective control to be ensured over all companies that are obliged to meet the disposal standards. In view of the above the issue has already been discussed of part of the authority’s functions relating to the administration of the environmental fee being transferred to the Federal Tax Service[5].