Environmental Fee: When a Product Code Triggers a Court Dispute
OKPD2, TN VED, recycling verification, and identifying the fee payer. We analyze case law and the most contentious issues surrounding Extended Producer Responsibility.
In the practice of industrial environmental specialists, calculating the environmental fee and meeting waste recycling targets for end-of-life products often lead to disputes with regional offices of Rosprirodnadzor. Moreover, disagreements can arise not only over product volumes or proof of actual recycling, but also over the classification codes applied, the content of primary accounting documents, and contractual arrangements with waste recyclers.
Imagine a situation: a company manufactures products that, based on their characteristics, belong to a specific product group. The documentation contains both OKPD2 and EAEU TN VED codes, but comparing them does not clearly place the products into the exact same category. During an audit, a Rosprirodnadzor inspector adopts a specific interpretation that results in an additional environmental fee assessment.
This raises the question: how justified is the regulatory authority's position, what statutory requirements must be considered during classification, and can case law be used to protect the company's interests?
Let us examine this through the lens of four court cases heard by commercial courts.
OKPD2 or TN VED: What Determines Product Classification?
Let us start with the regulatory requirements.
The primary statute governing Extended Producer Responsibility (EPR) for manufacturers and importers is Federal Law No. 89-FZ of June 24, 1998, "On Production and Consumption Waste" [1].
On January 1, 2024, the EPR system underwent significant changes following the entry into force of Federal Law No. 451-FZ of August 4, 2023 [2].
For products and packaging subject to the current EPR mechanism, companies must follow the lists approved by Russian Government Decree No. 2414 of December 29, 2023 [3].
Let us pay close attention to Note 1 to the List of Products and Packaging Subject to Waste Recycling After Use.
According to this note, whether a product falls under the List is determined by its name, physical characteristics, and chemical properties under the Russian Classification of Products by Economic Activity OK 034-2014 (OKPD2). Meanwhile, EAEU TN VED codes and position names are intended for use by importers [3].
Thus, the law establishes clear rules for applying these classification systems. Treating OKPD2 and TN VED as completely interchangeable tools would, in my view, be incorrect.
However, another question arises: what should be done if the actual characteristics of the product, its commercial name, and its classification attributes do not allow for an unambiguous determination of the corresponding group in the List?
When such situations arise, I consider it advisable to sequentially establish:
the actual intended use, as well as the physical and chemical characteristics of the product;
the corresponding OKPD2 code and, where necessary, the EAEU TN VED code;
the product name and group within List No. 2414;
the grounds on which the product is assigned to that specific group.
It is particularly important to account for the notes and exemptions provided for specific product items.
Summary: a discrepancy between the codes of two classification systems does not, in itself, warrant a definitive conclusion that a violation has occurred. It is necessary to establish whether the product characteristics were properly identified and whether the provisions of the relevant List were correctly applied. At the same time, the absence of a direct court ruling on the priority of classification systems does not override the requirements explicitly enshrined in Decree No. 2414.
Missing OKPD2 Codes in Recycling Certificates: A Technicality or Grounds for Back Charges?
Let us examine Case No. A13-12101/2021, in which the Commercial Court of the North-Western District issued a ruling on February 21, 2023 [4].
A company submitted its 2017 recycling target compliance reports to Rosprirodnadzor along with documents confirming the transfer of waste for recycling.
During its review, the regulatory authority identified deficiencies in the submitted certificates, including the omission of the OKPD2 product code.
However, this is not the only noteworthy aspect of this court case.
The case files also revealed contradictions in the certificates between the indicated FKKO waste codes and the described waste management process. Furthermore, the operations actually performed involved waste sorting.
As a reminder, under Article 1 of Law No. 89-FZ, pre-treatment and recycling are distinct types of waste management activities. Sorting falls under pre-treatment and does not, in itself, confirm that waste recycling has been completed.
Consequently, the courts upheld Rosprirodnadzor's claims.
Some might draw an oversimplified conclusion from this ruling: that omitting an OKPD2 code from a certificate automatically invalidates compliance with recycling targets.
I consider such an interpretation incomplete.
In this case, the court evaluated the totality of the circumstances, including the content of the certificates, the nature of the operations performed, and whether actual waste recycling could be verified.
Summary: when preparing documentation, merely entering the correct product or waste code is not enough. You must ensure full traceability of the entire operation: what waste was transferred, how it was recycled, what final product was obtained, and which documents verify the outcome.
For businesses, this means verifying not only the formal details on the certificates, but also the contractor's actual waste recycling technology.
Actual Recycling or Missing Data in the Information System?
The next case is No. A56-26568/2022, decided by a ruling of the Commercial Court of the North-Western District on August 7, 2023 [5].
Rosprirodnadzor filed a lawsuit seeking to recover 73,150.67 rubles in unpaid environmental fees for 2018 from a company.
The claim was based on the fact that the organizations to which the waste had been transferred had not declared their recycling equipment capacity or submitted facility data to the EGIS UOIT system.
According to the supervisory authority, these circumstances demonstrated a failure to verify recycling.
However, the appellate court—whose findings were upheld in cassation—established that during the period in dispute, the law did not require a company to verify a contractor's capacity data in that information system when entering into a contract.
Moreover, the case record contained certificates and other documents confirming actual waste recycling resulting in manufactured products.
Notably, during its inspection, Rosprirodnadzor failed to request additional contracts and explanations from the company that were necessary to verify the submitted information.
As a result, the claim to recover the environmental fee was dismissed.
In practice, such disputes arise quite frequently: an inspector concludes that a violation has occurred simply because data is missing from an information system, without thoroughly examining the documentation and the actual business operations.
At the same time, an important nuance must be kept in mind. This dispute concerned reporting for the year 2018.
Following the EPR reform, the requirements for recyclers, their inclusion in the official register, and the verification of self-managed recycling have changed. Therefore, the court's conclusions cannot be applied to legal relations in 2025–2026 without accounting for the current version of the law.
Summary: when challenging Rosprirodnadzor's claims, it is essential to establish not only the factual circumstances, but also the exact version of the regulations in force during the specific reporting period. A court ruling based on outdated rules does not exempt a company from complying with new mandatory requirements.
Can Recycling Be Verified If It Was Performed by a Subcontractor?
An interesting legal position is set out in the ruling of the Commercial Court of the North Caucasus District dated April 19, 2023, in Case No. A32-11263/2022 [6].
Rosprirodnadzor sought to recover over 5 million rubles in environmental fee arrears from a company.
During the audit, it emerged that the company had contracted with organizations that subsequently transferred the waste to another legal entity for actual recycling.
The supervisory authority insisted that the law does not permit fulfilling recycling obligations through such a subcontracting model.
The courts disagreed with this position.
The decisive factor was the documentary proof of the waste's movement and its actual recycling by the entity engaged under contracts with the primary contractors.
The cassation court pointed out that having the recycling performed by a third party under agreements with contractors does not refute the established fact that recycling took place.
In doing so, the court also specifically evaluated prior judicial rulings in administrative cases related to the same circumstances.
What does this mean for businesses?
In my view, the key takeaway is the need to evaluate the entire waste management chain, rather than just the relationship between the client and the primary contractor.
Contractual documentation and primary accounting records must clearly trace the transfer of waste, its movement among the process participants, and the final recycling outcome.
However, a caveat is necessary here as well: this court case concerned obligations for 2020 and does not mean that any subcontracting arrangement is permissible under the current rules of the reformed EPR system.
Summary: holding a certificate from a primary contractor does not automatically guarantee that recycling will be recognized as verified. A company must understand who actually performs the technological operations and what documents confirm the result.
Who Must Pay the Environmental Fee: The Contract Manufacturer or the Client?
Another illustrative case is No. A32-47257/2021, decided by the Commercial Court of the North Caucasus District on January 11, 2023 [7].
A company that manufactured PET preforms using client-supplied raw materials paid an environmental fee of 1,083,281 rubles for 2019.
Subsequently, the company determined that it had no legal obligation to pay the fee and applied to Rosprirodnadzor for a refund of the overpaid amount.
After the request was denied, the matter went to court.
The courts established that the manufacturer was actually providing toll processing services using the client's raw materials. The finished products belonged to the client, and the contractor had no right to dispose of them independently or sell them to third parties.
Given the nature of the contractual relationship and the legislation in force during the disputed period, the courts concluded that the contractor had no obligation to pay the corresponding environmental fee.
As a result, the claim for a refund of 1,083,281 rubles was granted.
This dispute is primarily relevant for companies engaged in contract manufacturing, toll processing of client-supplied materials, and private-label production.
In such situations, production, commercial, and legal departments often take different approaches to defining the status of the manufactured goods.
However, for EPR purposes, it is not enough to identify whose equipment was used to make the product. It is necessary to determine which entity bears the statutory obligation to ensure recycling under the laws of the relevant period.
Nor should this ruling be viewed as a blanket exemption from the environmental fee for toll manufacturers. Following the EPR reform, the rules for identifying the responsible party have changed.
Summary: in contract manufacturing, it is necessary to analyze not only the physical production of goods, but also the legal status of the parties, the terms of product transfer, the allocation of ownership rights, and the statutory provisions in force during the relevant period.
What About Exported Products?
I would like to separately address an issue of great relevance to large industrial enterprises that sell a significant share of their products outside the Russian Federation.
Under Article 24.5(4) of Law No. 89-FZ, no environmental fee is payable on the weight of products and packaging exported from the Russian Federation [1].
Consequently, when calculating the environmental fee, companies must ensure accurate accounting of exported products and maintain documentary proof of their export.
I recommend paying special attention to this if your company uses multiple sales channels: direct exports, sales through trading houses, and sales to Russian counterparties.
Selling goods to a Russian intermediary should not be automatically equated with exporting. What matters are the statutory conditions and documented proof that the products actually left the Russian Federation.
Summary: properly separating export and domestic product flows helps prevent overassessment of the environmental fee. However, achieving this requires the environmental department to work closely with commercial, finance, and logistics teams.
Conclusions and Recommendations
The reviewed case law demonstrates that when resolving environmental fee disputes, courts evaluate not only the formal content of submitted documents, but also the actual realities of business operations.
At the same time, none of the analyzed rulings establishes a universal rule that would allow companies to ignore product classification requirements or proper documentation procedures.
Based on the analyzed court rulings and current regulatory requirements, I believe corporate environmental specialists should focus on the following key areas.
First — product classification. Ensure that a product's inclusion in a specific group under List No. 2414 is determined based on its physical and chemical characteristics, the relevant classification codes, and the applicable notes.
Second — recycling verification. Obtaining a certificate from a contractor is not enough. It is crucial to be able to verify that the technological operations were actually performed and yielded a recycled product, and that the recycler meets all statutory requirements.
Third — contractual arrangements. When using contract manufacturing, tolling arrangements, or third-party contractors, clearly define the legal status of all participants and how EPR obligations are allocated.
Fourth — reporting audits. If disagreements with Rosprirodnadzor arise, I recommend demanding specific regulatory grounds for their objections and independently comparing the inspector's conclusions against the requirements in force during the relevant reporting period.
Fifth — case law. Court rulings should be applied with due regard for the specific facts of each case and subsequent changes in environmental legislation.
In closing, I would like to highlight one practical point.
Environmental fee compliance is often delegated solely to the environmental department. Yet the accuracy of calculations directly depends on data regarding the production, procurement, sale, and export of goods, as well as contract terms and accounting records.
Therefore, preparing EPR reporting should be treated as a cross-functional process involving environmental specialists, legal counsel, finance and tax teams, procurement, and other business units.
Bottom line: the most effective way to minimize financial and legal risks is not challenging back charges after the fact, but proactively building a unified system for product accounting, goods classification, and EPR compliance verification.
At the same time, an inspector's objections should not be treated as an indisputable finding of a violation. Auditors can make mistakes too, and when backed by a sound legal position, a company has every right to use statutory mechanisms to defend its interests.
Regulatory Sources and Case Law
On Production and Consumption Waste: Federal Law No. 89-FZ of June 24, 1998 (as amended).
On Amending the Federal Law "On Production and Consumption Waste" and Certain Legislative Acts of the Russian Federation: Federal Law No. 451-FZ of August 4, 2023.
On Approving the Lists of Products and Packaging Subject to Waste Recycling After Use, and Recycling Targets for Waste from the Use of Products and Packaging: Decree of the Government of the Russian Federation No. 2414 of December 29, 2023.
Ruling of the Commercial Court of the North-Western District No. F07-22328/2022 of February 21, 2023, in Case No. A13-12101/2021.
Ruling of the Commercial Court of the North-Western District No. F07-9585/2023 of August 7, 2023, in Case No. A56-26568/2022.
Ruling of the Commercial Court of the North Caucasus District of April 19, 2023, in Case No. A32-11263/2022.
Ruling of the Commercial Court of the North Caucasus District of January 11, 2023, in Case No. A32-47257/2021.