Original text in German: RusslandInsider
We are talking to Alex Buel, head of the consultancy company GMA Consult Group, about the potential of the Eurasian Economic Union (EAEU) for western companies and highlight the things trading companies should know for imports and product certification.
Mr. Buel, your company operates around the globe. How does GMA Consult Group distinguish itself, and what services do you offer to your clients?
We are advising our clients with regard to the implementation of electrical products on global markets. For many years, this type of activity was referred to using the concept “TIC” – Testing, Inspection, Certification. In order to align to modern reality and market requirements, another letter was added to this concept, thus being extended to “CTIC”, with the letter “C” standing for consulting. It is no secret that knowledge represents the secret of success for almost every company in every industry.
Our daily work involves gathering knowledge in the field of global conformity assessment, and offer it to our clients. We advise them in relation to all product life cycles, arrange product testing in partner laboratories worldwide, conduct product inspections and provide all the necessary documents, to make sure that the products of our clients, which are distributed in certain countries, meet the requirements necessary for the trouble-free import and selling. Our main advantage lies in the use of advanced technology and in our mobility, both of which are aligned to the demands of today’s economy. To that purpose we have developed, for instance, our own software solution, the GMA portal, which allows our clients to effectively interact with our team.
What are the challenges you have noticed when it comes to imports and exports in these specialized business segments?
Today, the world develops at a fast pace, people’s needs are constantly changing, new technologies emerge. The main challenge for the manufacturer lies in keeping up with the progress, emerging on the market at the right time and with the right product. The second challenge refers to the regulatory environment, which also changes quite fast. In order to be able to enter a specific market, the manufacturer must know the requirements of the target market in advance, for a month, a year and even for the forthcoming years. The process of analyzing and systematizing the enormous information influx requires an important resource, a clear systematization and distribution of knowledge. The price of a mistake, as well as missing out on some changes or innovations on one market or the other can be very high.
Difficulties often arise when the competence of subcontractors is insufficient to facilitate an effective interaction process. We have encountered situations in which subcontractors experienced difficulties acting as information brokers, simply because they could not understand the technical vocabulary. Therefore, looking from the perspective of the non-tariff regulation, I consider the main challenges in importing and exporting products to be connected not to mechanical obstacles but to an inefficient organization of the processes, which is mostly the result of choosing the wrong partners.
What would you advise foreign companies, which are interested in exporting and certifying their products in the EAEU?
The EAEU market does not only have a huge potential, but it is also characterized by a variety of changes in the field of non-tariff regulation. The fields of conformity assessment and certification are experiencing a veritable boom in particular. A few years ago, there were hardly any challenges in entering on the Russian market. One could obtain the necessary documents without intensive verification and production control, and the number of organizations which offered services for the acquisition of these permits amounted to thousands. Today, the situation is fundamentally different. We recommend each company that wants to export their products to the purpose of delivering to EAEU countries, and obtain the certification for these there, to unconditionally adhere to the applicable provisions and select competent partners, who are highly familiar with the regulatory nuances.
What are the changes related to the non-tariff regulation within the EAEU that have taken place in recent years?
Notably, in the past two years, the market was wiped clean by untrustworthy actors, who have reduced the number of certification bodies and exacerbated the accreditation criteria. For instance, a mandatory conformity assessment has been imposed for products which are manufactured outside the EAEU, and the presence of an authorized representative of the foreign manufacturer has been made mandatory as well, with the person acting as applicant of the conformity assessment procedures and assuming responsibility for the conformity of the products with the specific requirements. Moreover, starting with 2021, all declarations of conformity will be registered only by the authorized representatives through the use of a digital signature. The certification authorities are thus deprived of the right to enter declarations pursuant to the requests of the manufacturer in the uniform register.
According to our projections, the system of technical regulation in the EAEU countries, for the next two to six years, will go through further transformations, with its final formal being similar to the European system of conformity assessment.
In your opinion, what are the main issues to be resolved? What role does the conformity assessment play as non-tariff regulatory instrument within this context?
One must understand that the very essence of the non-tariff regulation is to create a barrier. A certificate per se is an obstacle for companies. On the other hand, clearly, each state has the right to protect the health of its citizens, including the prevention of damage incurred through the use of dangerous and substandard products. The main issue lies not in regulating the system of conformity assessment but in building an effective system of market surveillance. If no punishment is enforced for breaking these rules, over time, even the most respectable company will begin to ignore them.
What difficulties have your clients faced as a result of the corona outbreak?
Naturally, the corona pandemic has also affected the TIC industry, in one way or the other. Our clients are manufacturers of non-essential products, and it makes sense that their sales volume has genuinely decreased during the crisis. Moreover, in a number of countries the conformity assessment procedures were accompanied by additional mandatory product inspections, and, due to the closed borders, such inspections have become either difficult or impossible. Manufacturers and importers have encountered even more difficulties, as a result of additional customs controls and inspections. Another problem during the pandemic was the organizing of work in the remote mode. In the meantime, the majority of our client have successfully conquered this challenge and the processes are also very good organized remotely.
What future prospects do you see when it comes to the market development in your field of activity and generally for the Russian economic development?
The market for conformity assessment services is developing in the direction of knowledge quality and process organization. The person who has the information and also knows how to use it, is at clear advantage. For instance, a good knowledge of the respective market can greatly reduce the number of necessary product verifications or avoid repeated visits of experts from various countries to the manufacturing facilities. The knowing of product requirements, long before they become binding, allows the manufacturer to secure an advantage towards the competition and, at the same time, to prepare its products, as early as possible, to meet the new demands.
As already mentioned, when it comes to the EAEU market, we are talking about a great potential, which will certainly present a positive development. All EAEU members are transition countries, and their development, generally speaking, goes hand in hand with the increased demand of products imported from abroad. This refers in particular to technological products such as household appliances, audio-video devices and telecommunications products. In the future, this sector will continue to present an enormous potential.
The questions were asked by Frank Ebbecke and Dimitri Kling. Published on 26. November 2020 (RusslandInsider #23)