Russia creates own offshore zones?

On December 13, 2018 Russian State Duma has passed in the third reading a draft law empowering the state healthcare control (supervision) body (Roszdravnadzor) to conduct test purchases ("Draft law")1.

The Draft law grants Roszdravnadzor the authority to carry out test purchases with the view of:

  • Audit of compliance with both rules of medical drugs distribution and prohibition of distribution of fake, low-quality or counterfeit drugs by the commercial turnover’s participants, which are engaged in retail trade of medical drugs;
  • Audit of compliance with prohibition of distribution of fake, low-quality or counterfeit medical devices
  • Audit of compliance with procedure and terms for rendering paid medical services by medical institutions.

In addition, Roszdravnadzor can carry out test purchases immediately provided the simultaneous notification to the prosecuting authority2.

In general, test purchases can be carried out on the same grounds as they are stipulated for unscheduled on-site inquires. In particular, test purchase can be conducted based on appeals and applications from citizens (including individual entrepreneurs), legal entities receipt by the controlling bodies, as well as based on information available from public or local authorities and mass media regarding the evolution of threat of harm to life or health of citizens; violations of the requirements for the labeling of goods, etc.3

Granting Roszdravnadzor the right to carry out test purchases will make it possible to quickly identify fake, low-quality and counterfeit medical devices and (or) medical drugs, as well as to find out most effectively infringements of rules for retail trade of medical drugs or infringements of rules for provision of paid medical services by medical organizations4.

1http://sozd.parliament.gov.ru/bill/337563-7
2 The Draft law establishes the same provisions regarding test purchases of products when conducting federal national disease supervision and for the test purchases of products (works, services) when conducting federal national supervision of consumer rights protection
3 Full list of grounds for conduction of unscheduled on-site inquires is established by art. 10 of the Federal law dated 26.12.2008 No. 294-FZ “On protection of rights of legal entities and individual entrepreneurs at implementation of the state control (supervision) and municipal control”
4 According to the memorandum to the Draft law