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EXPORTING MEDICAL DEVICES TO EURASIAN CUSTOMS UNION

EXPORTING MEDICAL DEVICES TO EURASIAN CUSTOMS UNION

EACU Eurasian Customs Union

Eurasian Customs Union EACU was established in 2010. It includes five countries with a total population of 185 Million people. Geographical area covered is 20 Million square kilometers. Member states are Russia, Kazakhstan, Belorus, Armenia and Kyrgyzstan. 

For business interests of Western exporters the Top-3 most important countries are Russia 145 Million people, Kazakhstan 18 Million and Belarus 10 Million people.  Combined these three main target countries have 165 Million people and a substantial need for Western technology. Moreover, they also have the means to purchase and pay for them. 

Imports of products from Western countries have a single territory access in EACU zone. Products must have proven to be compliant with the requirements of Customs Union Technical Regulations. On practical level this means a mandatory single registration and certification to the Union. After registration process companies will use a EAC certification mark in their products. Product certification can be done as an example in Russia; and the same certificate will be valid in Kazakhstan, Belarus and other Union member countries. 

EAC Declaration has the equal validity as a certificate. EAC Declaration is required for customs clearance for those products that do not require an EAC Certificate. EAC Declarations can be organized for a one-time customs clearance, or for 1 to 5 years. 

Medical devices and their certification is, however, an exception to this general rule.  Medical device certification in the EACU member countries is very similar if not identical, but automatic single registration does not apply.  

IMPORTING MEDICAL DEVICES: EACU zone

There is a substantial and growing need for Western medical devices, equipment and pharmaceuticals to all and each of the Eurasian Union countries. Medical devices and pharmaceuticals are always among the Top-10 of the most important imported products in all of the Eurasian Union countries. 

The simple reason for this is that there did not exist any national production of such products in the territory countries of the USSR period.  After the USSR collapsed in 1991 none of the newly independent countries managed to create production plants that would satisfy the volumes or the technical standard of medical devices and products. This lack of products continues to be compensated with imports from the Western countries.   

IMPORTING MEDICAL DEVICES: example RUSSIA

Approval of medical devices is mandatory in Russia. Manufacturers or distributors must obtain registration for their medical devices before they can enter the Russian market.  At present there is no agreement between European Union and Russia or United States and Russia between mutual recognition of one another´s conformity regulations. Therefore all medical devices exported to Russia must be assessed according to Russian standards and requirements. 

All medical devices are registered in a Russian product classification system. So called OKP code shows whether the successfully registered medical devices will be totally exempted from value added tax, or whether they will have a 10% or a 18% value added tax.

Registration can be done either on the manufacturer´s or the distributor´s name. It is recommended to apply medical certificates on the manufacturer´s name directly: this way the manufacturer will be independent of any one distributor and can allow the use of the same product certificate by several distributor partners in Russia. 

Some medical devices are not subject to mandatory certification. In these cases manufacturers need to obtain a "letter of exemption" by an accredited independent testing laboratory.

To determine the certification requirements for any specific device, certification officials and experts need to be consulted in detail. 

END USERS OF MEDICAL SERVICES: example RUSSIA

High and middle income population are the end users of medical services. This population segment is about one third (“35%”) of the total population: an estimated 50 million people out of Russia`s total population 145 million people. On practical business terms this means that Western producers and manufacturers of medical devices, equipment and pharmaceuticals  have a very attractive market to satisfy the needs of 50 million people in Russia. There is actually no modern or advanced local own domestic production and manufacturing the needs of this segment. It is satisfied with imports from Western countries and from Western manufacturing companies.

Low income and poor population together are about 65% of the total population. It means roughly about 100 million people. The share of poor people alone is about 20% of population meaning 30 million people. The healthcare and medical service of the segment for poor people is by public sector and it is in general on a very unsatisfactory level. The lower middle income segment of population makes  the largest share of population about 45-55% with some 70 million people. Most of them use public state and/or municipal healthcare systems. The healthcare and medical facilities in this public segment are still on a poor level compared to Western standards and systems.

Employed workers in the middle income segment are very much interested to obtain so called “medical insurance coverages” arranged and paid by their employees. This is in many cases  a status symbol in Russia. Many “medical insurances” are actually just access cards and permissions to use the services of assigned private medical clinic. The basic “medical insurance fee” is typically 500 to 800 euro/year per person and practically always paid by the employer company. Medical visits etc are invoiced separately. 

Middle income classes of people are increasingly demanding Western standards of medical and healthcare services in Russia. This means more and more demands for Western medical equipment, systems and pharmaceuticals. Spending on private healthcare in Russia has risen ten-fold during the past 15 years. It is really an impressive growth of private sector medical healthcare. Private sector approaches to account for almost a third of the total market in Russia.

About 500.000 Russians travel overseas to Western countries each year for surgery or medical treatment. It means that there is a segment of population able to pay for any expenses and costs for their expections of high quality state-of-the-art medical care. This kind of overseas medical treatment abroad at least partially may be compensated with the local offerings in Russia by state-of-the art private clinics and hospitals continually expanding in the country.

HOW FOXX CAN OPEN THE MARKET FOR YOUR PRODUCTS

FOXX is a Finnish business consulting company. FOXX has it´s own subsidiaries in Russia, Kazakhstan, Belorus and the other "former USSR countries" since 1992. In Moscow,  FOXX-Russia is located inside the building complexes of The Russian Academy of Medical Sciences since 1993. The Academy is responsible of medical and healthcare matters of the entire of Russia. It has its own hospitals, R&D institutes and centers, clinics, laboratories and units authorizing the certification organisations for medical devices and pharmaceutical products.

FOXX provides business services to Western companies in the EACU zone. In medical business & industry typical services provided by FOXX are:

·   Certification of medical devices and equipment for importing and selling products 

*  Providing official evaluations and quotations for price and procedure of certification

·   Sourcing and selecting distributors and importers for Western company

·  Market studies, including establishing contacts with important customers

·   Outsourced local sales personnel to enforce selling, marketing and customer contacts

Western medical device, equipment and pharmaceutical business and industry will increase successfully in Russia, Kazakhstan, Belorus and the other "former USSR countries" in many years to come. We would be delighted to offer and provide our business services to your company`s specific needs for business and exports. 

for more information FOXX COMPANY