TASS reported that the Russian government has postponed a complete ban on e-cigarettes, primarily due to revenue concerns. The Ministry of Finance estimates that the new excise tax, effective March 2025, will generate 156 billion rubles (approximately $2 billion) in revenue for the state budget over two years. While health authorities have clearly stated that e-cigarettes pose a threat to public health, the financial, economic, and regulatory authorities have opted for "control rather than ban" amidst a multi-faceted negotiation.

According to a report by Russia's TASS news agency on August 6, one of the key market regulatory measures introduced in Russia at the end of 2022 is the honest labeling of e-cigarettes and their e-liquids. This measure aims to "legalize" the e-cigarette industry and protect the public from counterfeit nicotine. According to the Center for Development of Advanced Technologies (CRPT), the number of legal sales outlets has nearly doubled since the introduction of this requirement.

According to Article 15.12 of the Code of Administrative Offences, the sale of unmarked e-cigarettes will be punished. For legal entities, a fine of 300,000 rubles (about US$3,761); for particularly large-scale crimes or conspiracy, a fine of 400,000 to 800,000 rubles (about US$5,015-10,000), or up to 6 years in prison and a fine of up to 1 million rubles (about US$12,000).

In addition to labeling, sellers of "electronic products" must also comply with requirements set out in a law passed in April 2023. This law stipulates that nicotine-containing products must not be sold below a government-imposed minimum price. Furthermore, the sale of e-cigarettes, including those without nicotine, to minors is completely prohibited. Advertising and demonstrations of the use of such products are also prohibited, as are their public display in retail stores.

Total Ban Temporarily Suspended

In 2024, a group of deputies led by Yaroslav Nilov, Chairman of the State Duma Committee on Labor, Social Policy, and Veterans' Affairs, proposed a more radical initiative: a complete ban on e-cigarette sales. The bill was submitted to the lower house of parliament in May 2024.

“Despite certain bans on e-cigarette sales being enacted, these are easily circumvented, and minors continue to purchase e-cigarettes,” the bill's description reads. “To save the country, we believe it is necessary to impose a complete ban on e-cigarette sales at the federal level.” The bill never reached a first reading.

The State Duma website published the conclusions of the Joint Executive Committee (Youth Policy Committee and Family Protection Committee) and the Legal Department. The First Committee welcomed the bill but called for more standardized terminology. The Second Committee acknowledged that "there are cases of deaths caused by e-cigarette use in Russia," but also recommended amendments to the document. The Legal Department noted that "the proposed amendments conflict with the provisions of Article 19, Parts 1 to 7 of the Federal Law, which permit such trade but impose restrictions on its implementation."

Seeking A Balance of Interests

The drafters of the suspended bill acknowledged in a statement: "According to data from the Russian Ministry of Finance, as of January 1, 2023, excise tax revenue on the aforementioned goods amounted to 6.4 billion rubles (approximately $80.07 million)." In 2024, the excise tax was doubled. Amendments to the bill will take effect in March 2025.

According to the Ministry of Finance's calculations, the excise tax on raw nicotine and nicotine-free tobacco products, effective March 1, 2025, will generate an additional 156 billion rubles (approximately $2 billion) in revenue for the state budget over the next two years. Perhaps the risk of a significant reduction in budget revenues played a role in the bill's shelving.

Yaroslav Nilov told TASS: "The government and the State Duma are discussing the formulation of a comprehensive resolution aimed at taking into account the opinions of many stakeholders. At present, the political process is underway and the positions of all parties are converging. The Ministry of Health believes that e-cigarettes are harmful to health and shorten life expectancy. The heads of the economic and financial departments stated that e-cigarettes are taxable products, which means budget revenue. At the same time, the ban will lead to the import and distribution of counterfeit goods, although studies have shown that the market is already flooded with counterfeit goods, which has caused damage to both public health and the national economy."

While a decision on a full ban hasn't been made, Yaroslav Nilov's colleagues are putting forward new proposals aimed at making e-cigarettes less appealing. State Duma deputy Ksenia Goryacheva of the New People's Party has written to Prime Minister Mikhail Mishustin, proposing that manufacturers of e-cigarette products be required to use unobtrusive, single-colored packaging.

"Redesigning packaging isn't a panacea, but it's an important step. When e-cigarette packaging looks like childhood lollipops, we need to not only sell the product but also target children with targeted advertising. And, of course, we need educational programs, stricter sales controls, and psychosocial support for those already addicted," said Ksenia Goryacheva.

Ksenia Goryacheva expressed her support for the idea of a complete ban on e-cigarettes. At the same time, she noted that it is crucial to avoid leaving the market in the dark. "We also propose a gradual, comprehensive ban on the sale of nicotine-containing products to people born after 2009. This way, children won't have time to develop bad habits. This is a global change, and we are working on it together with experts and colleagues. We also understand that the age limit needs to be lowered again," she added. She explained that these measures are currently being developed, with the primary focus being on limiting access to e-cigarettes, reducing their appeal, and controlling their quality.

Artem Metelev, Chairman of the State Duma Committee on Youth Policy, has also made a similar proposal. He recently wrote to Anton Shalayev, Director of the Russian National Standards Agency, asking him to consider amending the agency's regulations on the production of nicotine-containing e-cigarette liquids. The deputy minister proposed requiring manufacturers to place warning labels on the packaging of e-cigarettes and nicotine-containing e-cigarette liquids, informing consumers of the dangers of vaping these products, similar to existing regulations for cigarettes.

According to Ksenia Goryacheva, the government has not yet responded to her letter. "The deadline has not yet passed. The labeling and registration of nicotine-containing products is currently a focus of multiple agencies, and I hope the government will take similar measures," she said.

Another initiative came from a group of MPs from the Liberal Democratic Party (LDPR). Led by party leader Leonid Slutsky, they submitted a bill to the State Duma that would ban the use of "substances intended to increase the appeal of such products, including food flavorings and additives that increase the addictiveness of nicotine" in the production of e-cigarette liquids.

The explanatory document states that the government will be given the power to determine a list of substances permitted for production starting September 1, 2023, but this authority has not yet been implemented. "Experts emphasize that one reason for the lack of such a list of substances is that the Eurasian Economic Commission is currently developing a draft technical regulation on nicotine-containing products in the Eurasian Economic Union. Once adopted, this regulation will provide all member states with a common list of substances that cannot be used in the production of both nicotine-containing and nicotine-free e-cigarette liquids," the explanatory document states.

Leonid Slutsky expressed support for a complete ban on e-cigarettes and cigarettes—a bill the LDP proposed as early as 2017. However, he argued that, pending a decision, the purpose of banning flavors is to reduce the appeal of nicotine consumption.

“Young people are mostly attracted to the flavors of candy, gum, coffee, menthol, and cherry. If we remove these aromatic lures, most people will be turned off by the pleasures of this fashionable innovation,” the deputy minister said. “Any potential direct tax or other state revenue from e-cigarette sales cannot compare to the state’s long-term strategic task of saving the Russian people, especially the younger generation. Russian boys and girls can be cool without e-cigarettes.”

He stated that if the flavor ban bill is passed, the LDP will do its utmost to ensure its compliance. The party also plans to draft a bill on fines for violating the new regulations.

The internet is flooded with advertisements for e-cigarettes, claiming these shops boast established customer bases, offer direct delivery, provide equipment, and even offer customized online advertising.

As Yaroslav Nilov explains, the appeal of such businesses is obvious; all it takes is establishing a legal entity and choosing a convenient location. For entrepreneurs, the advantages include low rent, a long shelf life, and high profit margins. The average retail price of an e-cigarette is 1,400 rubles (about $18), while a wholesale purchase of 100 cigarettes costs less than 800 rubles (about $10).

It is worth noting that the sale of e-cigarettes is banned in dozens of countries. In China, Russia's primary supplier of e-cigarettes, sales of such products on the domestic market are strictly restricted.

However, Russia has had some successful precedents in closing down e-cigarette shops. For example, the Vologda Oblast government closed 32 retail stores selling nicotine-containing products in just two weeks in June. Governor Georgy Filimonov said this represents 10% of the total number of e-cigarette stores in the region. According to him, previously there were 316 e-cigarette retail stores in the region, some of which were located near educational institutions.