Will small businesses be able to operate successfully under the new technical regulations?
The era of "grey" goods, which recently flooded our shopping centers and flea markets, seems to be fading into the past. It is time for civilized trade, when the buyer will finally gain access to information about any purchase – from the manufacturer to product safety. This is the aim of the introduction of the Customs Union's technical regulations on the safety of light industry products. Despite the entry into force of the new trade rules on July 1, 2012, Belarusian authorities have repeatedly granted domestic individual entrepreneurs extensions for adaptation. However, recent monitoring by regulatory bodies shows that little has changed.
Safety First
The idea of unified technical regulations for all EAEU member states emerged from the moment the single customs space was created, which is logical in principle. Since Russia, Kazakhstan, and Belarus began to operate without borders, approaches to the quality and safety of goods freely circulating between states should also be the same. Moreover, the problem of "grey" goods, especially for Russia, has been brewing for a long time. Belarusian entrepreneurs know that anything is possible in the vast expanses of their eastern neighbor. There are many illegal logistics structures that, if necessary, can import goods without proper customs clearance and make virtually any "left" product, for example, from China, into "Russian" ones. And what about the underground and semi-underground workshops for sewing the same clothing, where illegal workers produce low-quality mass-produced goods day and night? For a time, obviously, this suited both Russians and our entrepreneurs, who were accustomed to the old way of buying "grey" goods at bargain prices in numerous Moscow markets.
– But now the time of civilized trade is coming, – emphasizes Nina Prokofieva, Head of the Department of Commercial Activities at VSTU. – The Technical Regulation requires confirmation of the safety of light industry products for consumers. For a long time, buyers in the markets had to rely solely on the honesty of sellers.
Oksana Murashkevich, head of the Vitebsk Regional Inspectorate of the State Committee for Standardization of the Republic of Belarus, agrees with this. According to her, inspections of some entrepreneurs sometimes reveal egregious facts. For example, laboratory tests of unmarked shoes sold at one of the Vitebsk markets revealed that their odor indicators were off the charts, poor-quality paint was used, and they were also highly toxic.
But then why are Belarusian entrepreneurs so slow to get on track with the times and start working in a new way? Especially since for the phased transition to the unified requirements of the EAEU technical regulations until January 1, 2013, the production and release of products not subject to mandatory conformity assessment (confirmation) before the technical regulations came into force was allowed in the EAEU. Then, for payers of a single tax, this period was extended until July 1, 2013. And in August, the ministries of trade, health, agriculture and food of Belarus, together with the State Committee for Standardization, made changes to an earlier resolution, which simplified the certification procedure for individual entrepreneurs, provided they submitted accompanying documents for the goods. Until July 1, 2014.
Hostages of the situation?
– We perfectly understand that any product must be safe and of high quality, – says Irina Yaskevich, chairperson of the organizing committee for the creation of the trade union of individual entrepreneurs (IE) “Vyasna” , who works in one of the Vitebsk shopping centers. – But our problem is not that we do not want to be responsible for product safety. It’s just that often it is technically impossible to confirm it. The laws of Belarus and Russia, where many source their goods, not only do not coincide on some issues of entrepreneurial activity, but are radically opposite. For example, many Belarusians buy goods at Russian markets, which are classified as “retail outlets,” and according to the laws of the Russian Federation, retail is not obliged to issue certificates of conformity or other documents. Technical regulations do not apply to individual entrepreneurs in Russia at all. Moreover, Belarusians trading in non-certified goods already pay double tax for this: income tax at an increased rate and value added tax. And now we have to pay for laboratory research with our own money?
According to entrepreneurs, the prices for certification services will simply ruin them: today, confirming the safety of light industry products from one manufacturer at the Vitebsk Center for Metrology and Standardization, for example, costs up to 1.5 million rubles. Considering that many individual entrepreneurs import several items of products, but from many brands and manufacturers, one cannot disagree with the entrepreneurs.
– Small business clearly cannot afford independent certification, – claims Irina Yaskevich. – On the other hand, I disagree with the calls to scale up our businesses. Why do some people think that the status of an individual entrepreneur is small, and therefore bad? We have found our niche, we are needed by customers, we have created jobs for ourselves and do not ask for state assistance. Why should we change anything?
– A paradoxical situation has developed, – believes Nina Lukyanova, Executive Director of the Association of Employers and Entrepreneurs of the Vitebsk Region. – The Technical Regulations of the Customs Union have been adopted and should be universal, meaning they must be followed by all countries of the union. However, only Belarusian entrepreneurs face difficulties with certification. Russian individual entrepreneurs have no problems. Although it is obvious that the manufacturer or at least the wholesaler, not the small retailer with their limited financial capabilities, should confirm quality and safety. Ideally, it would have been enough to give, for example, six months to all manufacturers and wholesalers of the Customs Union for certification, and leave individual entrepreneurs alone.
What to do?
– As soon as the common technical regulation appeared, – says Evgeny Klimentenok, Chairman of the Vitebsk regional organization of the Belarusian Trade Union of Workers of Various Forms of Entrepreneurship "Sadruzhnost", – we started writing appeals to various authorities – from the Vitebsk Center for Standardization and Metrology to the Prime Minister. According to Directive No. 4 of the President of Belarus, all legislative acts concerning the business environment must be discussed with councils and trade unions of entrepreneurs, but this was not done when the technical regulations of the Customs Union were adopted. As a result, the interests of small businesses were not taken into account. Yes, deadlines are being postponed, but the problem of unaffordable certification for many individual entrepreneurs has not been resolved.
As a way out, entrepreneurs' trade unions propose to develop a unified electronic database for all Customs Union countries, which would contain information about enterprises and their products that have passed certification and comply with technical regulations. Many serious companies wishing to enter new markets have already done so. Then it would be enough for entrepreneurs to simply print copies of certificates and have them certified at certification and standardization centers. During the transition period, wholesale declaration and certification can also be organized at large commodity bases, for example, in Grodno, where many individual entrepreneurs currently purchase goods.
– And in general, I think buyers should retain the right to choose, – believes Nina Lukyanova. – Many civilized countries around the world have "flea markets". Yes, they often sell low-quality goods without warranties, but they are cheaper.
Nina Prokofieva, Head of the Department of Commercial Activities at VSTU, is convinced that the lazy make excuses, while the enterprising seek opportunities. Certification services are provided not only by Vitebsk CSM, but also, for example, by the testing center of the technological university, where they are even cheaper.
– Of course, for businesses operating under a simplified tax system, there is no opportunity to attribute the cost of the service to reduce the taxable turnover of profit; they have to pay from their income. An entrepreneur's wide range of goods and expenses become significant, – says the economist. – To reduce them, one can, firstly, optimize procurement. Purchase goods from manufacturers or wholesalers who have met the technical regulations and properly label their products. Secondly, join forces, because according to the law, if several individual entrepreneurs import similar products, one of them can conduct the tests and grant the right to use these protocols to other individual entrepreneurs.
A more radical opinion regarding small businesses is held by Leonid Shur, director of VITEBSK BUSINESS CENTER LLC. According to him, an abnormal situation has developed in Belarus: entrepreneurs are accustomed to operating semi-legally and, at the same time, resent attempts to bring them into compliance. "Ideally, individual entrepreneurs should receive goods primarily of Belarusian production on invoices, sell them with certificates, and use cashless payments," he asserts. "And it is generally desirable to consolidate into legal entities, legally hire employees, and conduct business transparently, without exporting currency from the country."
Work Correctly
"There are about 28,000 entrepreneurs in the region paying a single tax," reported Viktor Yakunenkov, head of the entrepreneurship development department of the regional executive committee's economy committee. "Only about 4,000 of them are involved in selling light industry products. They are visible as they are concentrated in shopping centers. The government has repeatedly met them halfway, giving them time to adapt to new conditions. There are options. It should be understood that they will still have to work according to technical regulations, and this is quite normal."
In turn, Oksana Murashkevich, head of the Vitebsk Regional Inspectorate of the State Committee for Standardization, emphasizes that individual entrepreneurs still have a transition period. No ministerial decree has been repealed, which means that until July 1, 2014, entrepreneurs can sell light industry products purchased within the EAEU without certification, provided they submit supporting documents. As for goods from third countries, safety certificates and declarations of conformity to EAEU technical regulations are already mandatory for them.
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Buy Belarusian»Some entrepreneurs claim that the domestic light industry is a poor alternative to foreign mass-produced goods. In turn, light industry enterprises are ready to cooperate with individual entrepreneurs. I became convinced of this personally. Posing as an entrepreneur, I called about a dozen enterprises throughout Belarus. In Minsk, Orsha, Molodechno, and Vitebsk, they are always happy to welcome new clients and can supply goods at wholesale prices even in very small batches (from 1 to 5 items). Almost everywhere they offer discounts, and the assortment is also pleasing. Large enterprises have wholesale depots in the regions.
So, perhaps it is time for our businessmen to pay attention to the domestic light industry, which has made great strides in recent years? Moreover, Belarusian quality, confirmed by all the necessary documents, is highly valued.
Alexander Kutynko, "Vitebskiye Vesti"