EPR reporting: What changes await producers and importers

 On 1 January 2024, most provisions of Federal Law No. 451-FZ “On Amendments to the Federal Law ‘On Production and Consumption Waste’ and Certain Legislative Acts of the Russian Federation” (Law No. 451-FZ) came into force. This law reformed the extended producer and importer responsibility (EPR) institution. The legislator has given EPR organizations the opportunity to adapt to the new regulation. To this end, Law No. 451-FZ includes transitional provisions, the content of which can be summarized as follows: in 2024, EPR organizations will file reports according to the previous rules with certain modifications. Read more in the article of Olga Yadrikhinskaya, senior associate at Pepeliaev Group.

Until 15 April 2024, manufacturers and importers of goods included in the lists approved by the Government of the Russian Federation will have to submit:

• a declaration on the quantity of goods and packaging released into circulation in the territory of the Russian Federation in 2023 (previously submitted by 1 April of the year following the reporting year);
• a report on the fulfillment of recycling standards for goods and packaging whose initial sale in the territory of the Russian Federation took place in 2022 (previously submitted by 1 April of the year following the reporting year);
• calculation of the environmental fee in respect of goods and packaging whose initial sale in the territory of the Russian Federation took place in 2022.

As before, producers submit reports to the territorial body of Rosprirodnadzor, and importers – to the central office of Rosprirodnadzor. The report is submitted electronically: through the unified federal state information system for registration of waste fr om the use of goods (EFGIS UOIT) or on Rosprirodnadzor’s website.

An important change will not apply to reporting in 2024, which shifts the obligation to report on the packaging of goods from the producer of the relevant goods to the producer of the packaging. That is, for 2023, the packaging of goods will still be reported by the producer of goods.

The Ministry of Natural Resources has clarified which bylaws are to be followed when preparing reports (including calculation of the ecofee) in 2024 for 2023:

• lists of goods and packaging approved by the Government Order No. 3721-r of 31 December 2020;
• standards for the recycling of waste from the use of goods established by the Government Order No. 3721-r of 31 December 2020;
• ecofee rates approved by the Government Decree No. 284 of 9 April 2016.

Under the new rules, which will apply for the first time to the reporting for year 2024 to be submitted in 2025, producers and importers of goods from member states of the Eurasian Economic Union (EAEU) will be required to submit all reporting exclusively through the EFGIS UOIT. The Russian Environmental Operator (REO), a public-law company, has been appointed as its operator. The reporting period is a calendar year. The reports must be submitted by 15 April of the year following the reporting period.

The relevant provision is ambiguously formulated, which raises questions about the procedure for its application. Thus, it may be interpreted in such a way that:

• in 2024, the EPR organization produces/imports goods subject to EPR and by 15 April 2025 submits reports on the mass of goods produced/imported;
• in 2025, the EPR organization recycles a certain percentage of the mass of goods produced/imported in 2024 (according to the established norm), and by 15 April 2026 submits reports on the performance of recycling of goods produced/ imported in 2024.

This was the approach to reporting under the previous version of Law No. 89-FZ. However, as can be inferred from the public comments of the REO, this approach is planned to be changed as follows:

• in 2024, the EPR organization produces/imports goods subject to EPR and by 15 April 2025 reports the mass of goods produced/imported;
• in 2024, the EPR organization recycles a certain percentage of the mass of goods produced/imported in the same year 2024 (according to the established norm), and by 15 April 2025 submits reports on recycling of goods produced/ imported in 2024.

In favor of the second option of interpretation is also the fact that the transitional provisions of Law No. 451-FZ provide for the obligation of EPR organizations to additionally report in 2025 under the “old” rules on recycling in respect of goods, packaging, the primary sale of which in the territory of the Russian Federation was carried out in 2023.

One of the key changes introduced by Law No. 451-FZ provides that in 2025 producers of packaging of goods will be required to submit the reports in relation to such packaging. Producers of packaged goods are exempted from this obligation. Law No. 451-FZ specifically regulates the situation when a manufacturer packs the goods produced by it, including by heating, pulling, dividing into parts of the package, except for cases when the said packaging is produced by this manufacturer of goods.

The relevant activities performed by the producer of the goods are not considered to be the production of packaging.

 
Consequently, the producer of goods has no obligation to ensure the recycling of waste from the use of that packaging (unless it produced it itself). Thus, there is also no obligation to report on its utilization.

The wording of point 6, Article 24.4 of Law No. 89-FZ is not quite successful, as it contains an open list of packaging operations (the conjunction “including” is at the beginning of the enumeration). In this connection, manufacturers of goods often have questions whether it is necessary to report for a particular type of packaging, which is not explicitly mentioned in this norm, but corresponds to the general logic of regulation (as an example, we can take the combined packaging of toothbrushes, the components of which are purchased from different manufacturers, and the assembly is performed directly at the production of toothbrushes).

 
In this regard, manufacturers may be encouraged to send formal enquiries to Rosprirodnadzor in advance in order to clarify its position with regard to specific types of packaging.

The previous regulation provided that the obligation to ensure the recycling of waste from the use of goods arose from the moment of the initial sale of goods in the territory of the Russian Federation.

As of 1 January 2024, the obligation to recycle goods by producers of goods arises from the earliest of the following dates:

• the day of shipment (transfer) of goods, packaging;
• the day of payment, partial payment against the forthcoming delivery of goods, packaging;
• the day of shipment (transfer) or the day of payment, partial payment on account of forthcoming deliveries of goods in packaging, if packaging is produced for the purpose of placing own goods in it;
• the day of writing off spoilt or defective goods and packaging.

For importers, the moment when the obligation to ensure the recycling of goods and packaging arises depends on the countries from which they import them:

• in the case of imports from EAEU member states, such obligation comes into effect on the day when the packaged goods are taken into account;
• in the case of imports from states that are not members of the EAEU until 1 January 2026, such obligation arises from the day when the goods are released by the customs authority for domestic consumption;
• in the case of imports from states that are not members of the EAEU, from 1 January 2026 the importer will have to pay an ecofee before the day of release of goods for domestic consumption, or inform about the intention to independently recycle goods and provide guarantees of payment of the ecofee (in case the importer fails to ensure independent recycling of goods).

Thus, while previously manufacturers and importers were not required to ensure and report on the recycling of written-off or defective goods, under the new regulation they are obliged to do so.

The requirements concerning the submission of reports have been tightened for importers of goods from countries which are not members of the EAEU. Thus, they are obliged to submit reports on the weight of imported goods/packaging to the EFGIS UOIT before the day on which the goods are released for domestic consumption.

From 1 January 2026, importers planning to carry out independent recycling will need to attach to these reports:

• a notification of the intention to independently recycle waste; and
• a bank guarantee of payment of the amount of the ecofee; or
• a guarantee agreement for the payment of the amount of the ecofee concluded with a person included in the register of recycling companies.

At the same time, Law No. 451-FZ provides for the authority of the Russian Government to conduct an experiment, within the framework of which certain importers planning independent recycling will be obliged to submit the above documents until 1 January 2026.

The Russian Government also has the right to establish a list of goods that are critical for the Russian economy. Importers of such goods from non-EAEU countries will report on the weight of imported goods under more lenient rules that apply to importers from EAEU countries.

Importers from non-EAEU countries will report on the performance of recycling according to the general rules – by 15 April of the year following the reporting period.

In accordance with the changes applicable for reporting in 2025, the goods related to defense products supplied under the state defense order or connected with a state secret or other restricted information are exempted from the EPR rules.

In addition, as well as before, it is not required to recycle and, accordingly, to include in reporting data on the recycling in respect of the following goods:

• used as raw materials, materials, spare parts and components in the production of goods included in the lists of goods to be recycled;
• used in the production of vehicles in respect of which the ecofee is paid;
• goods exported from the Russian Federation.

Producers and importers of the above goods may be advised to collect in advance the documents that could confirm that there is no need to submit recycling reports in respect of their goods. As practice shows, such documents may be useful in case Rosprirodnadzor makes claims in connection with improper failure of producers and importers to fulfil their obligation to submit recycling reports.

Rosprirodnadzor must, within 90 days from the date of submission of recycling reports, review such reports, contracts and acts of recycling and confirm (or refuse to confirm) the reporting or confirm the reporting in respect of a different mass (e.g. in respect of only a part of the mass of goods/packaging indicated in the reporting).

The law does not specify that the 90-day period specified is a time lim it. Therefore, it can be assumed that Rosprirodnadzor will be able to raise claims related to unreliable reporting beyond this period.

Rosprirodnadzor will also compare reporting with information contained in the EFGIS UOIT and information systems of other agencies, including the Federal Tax Service, Federal Customs Service, and official statistical information. In addition, the law provides for the right of Rosprirodnadzor to request additional information fr om EPR organizations and recycling companies, to conduct on-site inspections and to involve REOs in conducting control measures.

Another way to verify the reliability of recycling reporting provided for by the law allows REOs to analyze the reporting of recycling to ensure that it is consistent with the information contained in the EFGIS UOIT. If discrepancies are identified, the REO informs Rosprirodnadzor.

Rosprirodnadzor has received a wide range of opportunities that will allow it to prove the unreliability of reporting on recycling and to bring EPR organizations to administrative responsibility on the basis of Article 8.5.1 of the Code of Administrative Offences, including for the provision of reporting containing inaccurate information.

Item 2 of this Article provides for a penalty in the form of a fine of twice the amount of the ecofee for each group of goods/packaging for which the EPR organization cannot prove that it has independently recycled waste. This fine has no “upper lim it” and may reach hundreds of millions of roubles.

Therefore, EPR organizations should already start preparing for the 2025 reporting campaign, e.g. engage reliable recycling companies or independently purchase the necessary equipment for recycling, and correctly execute all documents within the framework of the EPR in order to reduce this risk.

The source: AEB