Seven Court Cases on Medical Devices against Russian Customs

As it is known, amendments to the Russian Tax Code in November 2013 have not fully clarified applicability of VAT on importation of medical devices in Russia. While expected low-level legislation changes are under discussion of Russian Government, regional Russian customs posts are very controversial in applying VAT regulations in practice. However, from legal standpoint, exemption from VAT is quite real thing. Here I would like to present a short law review on VAT for medical devices for last year. All information derived from public sources.

  1. Company A vs Tver Customs:
    Date:09.2014 – 21.11.2014
    Decision of The first instance court: to recognize as illegal the decision of Tver Customs to release medical devices with payment of VAT.
    Appeal court upheld the judgment of the court of first instance and left appeal of Tver customs without satisfaction.
    Source
  2. Company B vs Smolensk Customs
    Date: 010.2014
    Decision of The first instance court: to recognize as illegal the decision of Smolensk Customs #XXXX on refusal to grant exemption on VAT for medical devices, to oblige Smolensk customs to pay VAT back
    Appeal court upheld the judgment of the court of first instance and left appeal of Smolensk customs without satisfaction.
    Source
  3. Company C vs Omsk Customs
    Date:08.2014
    Decision of The first instance court: to invalidate the decision of Omsk Customs on calculation of VAT for medical devices.
    Source
  4. Company D vs Moscow Customs (Kashirsky customs post)
    Date: 02.2014
    Decision of The first instance court: to consider as illegal decision of customs post on calculation of VAT rate for medical device as 18%.
    Source
  5. Company E vs Moscow Customs (Sheremetyevo)
    Date: 27.03.2014
    Decision of The first instance court: to consider as illegal and to cancel the decision of Sheremetyevo customs on impossibility of exemption of VAT for medical device.
    Source
  1. Company F vs Moscow Regional Customs
    Date:05.2014
    Decision of The first instance court: to consider as illegal the decision of Istra customs post on refusal to grant exemption on VAT for medical device.
    Appeal court upheld the judgment of the court of first instance and left appeal of Moscow Regional Customs without satisfaction.
    Source
  1. Company G vs Moscow Regional Customs
    Date: 05.2014 – 23.09.2014
    Decision of The first instance court: to consider as illegal the decision of the customs post, to pay back excessively paid VAT for medical devices.
    Appeal court
    upheld the judgment of the court of first instance and left appeal of Moscow Regional Customs without satisfaction.
    Source

Семь Судебных Дел о Медицинских Изделиях против Российской Таможни.

Click here for English version of this post

Как известно, поправки в статьи 149 и 150 налогового кодекса в ноябре 2013 года окончательно не прояснили ситуацию с начислением НДС при импорте медицинских изделий.  В то время, как министерства обмениваются официальными письмами по этому вопросу, а ожидаемое Постановление Правительства Российской Федерации «Об утверждении перечней медицинских товаров, реализация в Российской Федерации и ввоз которых на территорию Российской Федерации и иные территории, находящиеся под ее юрисдикцией, сырья и комплектующих изделий для их производства, не подлежащих налогообложению» находится на согласовании, реальная практика на региональных таможенных постах крайне неоднозначна. Тем не менее освобождение от НДС – вещь вполне реальная с юридической точки зрения. Представляю Вашему вниманию небольшой обзор судебной практики по делам о НДС для медицинских изделий за последний год. Вся информация взята из открытых источников.

  1. Компания А против Тверской Таможни
    Дата: 01.09.2014 – 21.11.2014
    Оспариваемая сумма НДС: 1 773 148 руб.
    Решение суда первой инстанции: признать незаконными действия Тверской таможни по выпуску медицинских изделий с оплатой налога на добавленную стоимость.
    Решение Арбитражного суда по апелляционной жалобе: решение суда первой инстанции оставить без изменения, апелляционную жалобу Тверской таможни – без удовлетворения.
    Источник
  1. Компания B против Смоленской таможни
    Дата: 08.10.2014
    Оспариваемая сумма НДС: 7 563 706 руб.
    Решение суда первой инстанции: признать незаконным решения Смоленской таможни N XXX, которым обществу было отказано в предоставлении льгот по уплате налога на добавленную стоимость при ввозе важнейшей и жизненно необходимой медицинской техники, обязать таможенный орган возвратить излишне уплаченный налог на добавленную стоимость.
    Решение Арбитражного суда по апелляционной жалобе: решение суда первой инстанции оставить без изменения, апелляционную жалобу Смоленской таможни – без удовлетворения.
    Источник
  2. Компания C против Омской Таможни
    Дата: 08.08.2014
    Решение суда: Признать недействительным решение Омской таможни.
    Источник
  1. Компания D против Каширского таможенного поста
    Дата: 06.02.2014
    Оспариваемая сумма НДС: 1 121 058 руб.
    Решение суда:Признать незаконными действия Каширского таможенного поста …с внесением обеспечения по ставке налога на добавленную стоимость (НДС) в размере 18 %, ввезённых по таможенной декларации № XXX
    Источник
  2. Компания E против Шереметьевской Таможни
    Дата: 27.03.2014
    Оспариваемая сумма НДС: 106 342 руб.
    Решение суда: Признать незаконным и отменить решение Шереметьевской таможни № XXXX о невозможности применения льготы по уплате НДС в отношении товара по ДТ №XXXXX
    Источник
  3. Компания F против Московской Областной Таможни
    Дата: 08.05.2014
    Оспаривая сумма НДС: 67 840 руб
    Решение суда первой инстанции:Признано недействительным решение Истринского таможенного поста NXXXX об отказе обществу в предоставлении таможенной преференции.
    Решение Арбитражного суда по апелляционной жалобе:  решение суда первой инстанции оставить без изменения, апелляционную жалобу Московской Областной Таможни – без удовлетворения.
    Источник
  1. Компания G против Московской областной таможни
    Дата: 19.05.2014 – 23.09.2014
    Оспариваемая сумма НДС: 61167 руб.
    Решение суда первой инстанции:признать неправомерными действия таможни, возвратить излишне уплаченный НДС.
    Решение Арбитражного суда по апелляционной жалобе: решение суда первой инстанции оставить без изменения, апелляционную жалобу Московской Областной Таможни – без удовлетворения.
    Источник

Three Things You Should Know about Medical Device Regulations in Russia and CIS, November 2014

At the end of this year, one may see a very slow recovery leading into a positive dynamic for Russian regulators of medical devices: the number of registration approvals is increasing and registration steps are gradually becoming shorter. Active work is continuing for the completion of the upcoming harmonization of regulations between Russia, Belarus and Kazakhstan. Below, please find my monthly selection of regulatory highlights for Russia and the CIS region:

1.”Falling Up”

“Medical Device Market: Falling Up” is the slogan of the strategic session chaired by Russian Ministry of Industry and Trade on the 12th of November as a part of the Medica 2014 exhibition in Dusseldorf. More than 100 industry representatives had a chance to get first-hand information about upcoming changes in medical device regulation in Russia directly from top-level officials as well as to discuss strategic scenarios and investment climate for the industry. The focus of this session was on localization and import regulation programs for medical products in Russia. The key strategic message from the regulator remains unchanged – “40% of medical devices for state procurements to be manufactured within Russia till 2020”.
According to Sergey Tsyb, Deputy Ministry of Industry and Trade, “This proposal has been already submitted to the Government of Russian Federation and we hope that it will be signed off within the month. There is special attachment to this document—the list of medical devices, which are already manufactured in Russia. And if there are two or more Russian analogues, this order will allow Russian manufacturers to compete in supplying their products for the Russian healthcare system”.

2. Advertising of Medical Devices across CIS

On the 20th of November, law #203-5 of Kazakhstan (signed in May 2014) came into force, amending Article 18 of National Health Code on the advertising of medical products. According to these changes, advertising medical products (including medical devices and medical equipment) via mass media henceforward is prohibited; rather, such advertisements can be placed only in specialized medical publications or health facilities. Previously, both medical devices and medicines could be advertised only if authorized by the Kazakhstan Ministry of Health according to special procedures; this has been now cancelled per the amendment above.Moreover, it should be noted that similar changes had been rejected in August 2014 by Russian regulators but are currently under intense discussion in Ukraine.

3. Federal Law on Circulation of Medical Devices…Attempt Number Three

The third version of the draft of Federal Law on the Circulation of Medical Devices became available for public discussion in November. Unlike the previous version of the law, which had been proposed by the Ministry of Health and had received controversial feedback from experts, the new version of the regulation was presented by the Ministry of Industry and Trade of Russian Federation. The text of the law has been considerably expanded, especially in the description of the registration process of medical devices. Apparently, the draft will be submitted to the government for approval within weeks, and the law should be enacted by the end of the year. However, work on it is expected to continue through 2015, as it requires harmonization with upcoming changes in regulations concerning medical devices per the Eurasian Customs Union.

Ten Questions about Clinical Trials of Medical Devices in Russia

On the 2nd of October 2014 Russian medical device regulator Roszdravnadzor organised a one-day seminar fully devoted to different aspects of clinical trials for registration of medical and in-vitro devices. More than 100 questions on this topic were put to officials by representatives of international medical device manufacturers and local clinics. Below I would like to post ten the most interesting of them answered:

1. Regulations permit two forms of clinical trials: evaluation of clinical data without patient involvement and full-scale clinical trials with patients. Who decides the form in which clinical trials will be required for registration in my particular case? According to regulations, full-scale clinical trials with involvement of patients are required for registration of new types of devices and new treatments or diagnostic methods as well as in cases when safety of medical devices has not been proved with evaluation of clinical data. In the near future Roszdravnadzor expects that all implantable 2b and 3 class medical devices will pass through full-scale clinical trials with patients. Currently, a clinic or trial centre decides if full-scale or reduced trials are required for every particular case.

2. Are clinical trials programmes (plans) and clinical data mandatory in the registration dossier? Yes. Roszdravnadzor confirmed that clinical trials plans and clinical data must be submitted in the first step of the registration (before expertise).

3. Who draws up the plan/programme of clinical trials? Local clinics or trial centres are responsible for composing the plan of the trials together with applicant for registration of the medical device in question. The clinic should be accredited by Roszdravnadzor. ISO 14155 is recommended for trial plans.

4. At what point are clinical trials officially started? Current regulations do not clarify this. The start of clinical trials could be considered as the point of signature of a contract with a clinic or an initial clinical visit or signature of informed consent from the first patient. Applicants must inform Roszdravnadzor about the start of clinical trials for their device within five business days.

5. Is an ethical committee mandatory for clinical trials? Roszdravnadzor confirmed that an ethical committee has worked within the Ministry of Health since July 2014. All clinical trials on patients must be approved by the ethical committee. The procedure of assessment of clinical data should be agreed by the ethical committee only if this data contains personal information of patients.

6. Is the ISO 14155 standard mandatory for clinical trials? National standards are not mandatory in Russia. Meanwhile it should be noted that this standard is considered a minimal requirement. In cases when companies or clinics do not have their own standards or procedures, ISO 14155 is highly recommended

7. What documents are needed to start full-scale clinical trials? Two documents are mandatory for any clinical trial on patients: authorisation from Roszdravnadzor and approval from the ethical committee.

8. Can clinical trials for registration in Russia be performed abroad? Yes. Clinical trials can be performed out of Russia if samples of the device cannot be shipped in the country because of technical reasons (e.g. equipment requires complex installation). In such cases trials must be performed by Russian experts from clinics accredited by Roszdravnadzor during inspection visits. Places where trials have been performed should be noted in the clinical report.

9. How many samples do we need for trials? Samples of medical devices must be provided to the clinic in cases of full-scale clinical trials and clinical data assessment. The quantity of samples required is defined by clinics for every particular case. Samples must be imported according to special procedures with permission issued by regulator.

10. Is it allowed by law to pay patients for participation in clinical trials? Yes, but any payment to a patient must be agreed by the ethical committee of the Ministry of Health.

Three Things You Should Know about Medical Device Regulations in Russia, August 2014

Dear Fellow Colleauges,

At the beginning of my monthly update, I would like to provide some numbers reflecting the activity of the Russian regulator. According to the official Rosdravnadzor site, for the period between 1 and 25 August, 120 registration certificates – both renewals (major part) and new registrations – have been approved, of which 38 approvals for Russian manufacturers. More than 70 unregistered medical devices have been suspended. 102 authorizations for clinical trials and 73 permits for samples importation were issued.

 

  1. New Details on Common Eurasian Medical Device Regulations Emerged:
    Following the fact that the Treaty on the Eurasian Economic Union (EAU) was signed by Russia, Kazakhstan and Belarus on 29 May, the Eurasian Economic Commission (EAEC) published on 11 August the draft of the agreement on common regulations on medical devices for the EAU.
    According to the draft, one registration certificate is anticipated to be valid throughout the whole EAU territory as far as testing performed in one country will be accepted within the Union. The EAEC expects this agreement to come into force on 1 January 2016, and after this date, current (local) registration certificates will be valid until their expiry dates or, if there is no expiry date, until 31 December 2021.
    The draft of the regulations implies a common approach on vigilant data collecting and reporting (a reporting period of five days was set) and labelling (special symbols will be required) for medical devices approved for the EAU.
  2. Coming Regulations on State Procurements of Medical Devices in Russia: “Constraints” Replaced “Strict ban”.
    After the negative feedback from medical and business associations on the draft of the Resolution on “On establishing a ban on individual types of medical devices originating from foreign countries for State and Municipal procurements”, the Russian Ministry of Industry and Trade (Minpromtorg) has officially announced the revision of its position. The term “strict ban” for state procurements for certain groups of medical devices has been replaced with the term “constraints”. The new version of the document assumes that foreign manufacturers will be able to participate in public procurement in the case when fewer than two bids from EAU manufacturers have been submitted for tender. These limitations do not extend to all medical devices, but only to a certain list of products, which has also undergone some changes: some X-ray equipment have been excluded from the list, meanwhile ECG, refrigeration equipment, diagnostic test kits and reagents have been added. It was also highlighted that conformity to the ISO 13485-2011 standard is necessary for EAU manufacturers in order to participate in state and municipal procurements.
  3. New Edition of the Registration Rules in Russia:
    New amendments to the registration rules (Resolution 1416) came into force on 29 July. The most positive outcome is the possibility to eliminate faults during experize phase. Previously there was no such option and any discrepancy in the dossier revealed by the regulator during expertise usually led to an official refusal of registration. On the other hand, some important and broadly-discussed suggestions for improvement, such as fast-track approval for first class medical devices and special procedures to renew expiring registration certificates, have NOT been approved. The new edition of the registration rules slightly extends timelines and reasons for renewals and requires the provision of clinical data in the registration dosser (not before clinical trials as it was previously).