Every counterfeit drug entering the pharmaceutical supply chain poses immense health and financial risk to patients. To combat this problem and secure the distribution chain against this growing threat, Russia is currently in the midst of building the world’s most strict – and ambitious – pharma track and trace system, called Chestny ZNAK.

Signed into law by President Vladimir Poutine in December 2017, the legislation’s primary goal is to streamline quality control in the pharma industry, prevent counterfeit drugs from entering the system, and monitor demand, supply, and expenditure.

Phased implementation of the law began in 2019 and is expected to culminate by 2024. By then, every distributor and manufacturer in the pharma supply chain must comply and connect with Chestny ZNAK. The Government has also introduced strict fines and penalties for those who don’t fulfil the requirements.

No matter what your role in the supply chain is – manufacturer, packager, or distributor – it’s in your organization’s best interest to know how the track and trace system works and what the regulations require. So, here’s a small crash course on Russia’s pharma serialization regulations and Chestny ZNAK.

Russia's Pharma Serialization Regulations


Before we examine the fine strokes of how Chestny ZNAK works, let’s look at what it is. Chestny ZNAK, which means honest badge or honest sign, is the centralized track and trace system, which will store all the information on every pharmaceutical product moving through the supply chain.

Moreover, it’ll also offer all the supply chain intermediaries – from manufacturers to the end-user – a means to verify the legitimacy of the products. All you’ll need to do is scan the 2D barcodes via your Chestny ZNAK app and it’ll run the barcode against its internal database to verify the product’s authenticity.

The entire track and trace system is driven by the Center for Research in Perspective Technologies (CRPT), a private-public partnership. Its prime stakeholder is the business giant USM, established in 2012, with footholds in many key industry sectors like telecoms, internet, metals, mining, technology, and many more.

Now, let’s see how the system works.

Step 1


First, CRPT sends every economic agent in the supply chain – manufacturer, wholesaler, retailer, or importer – a unique code that must be affixed to each product while packaging. However, it’s important to note that only agents permitted by the CRPT can receive these codes.

To get the code, you must be a verified pharmaceutical license holder. The CRPT will issue you with a code after you send an application outlining all the necessary information, including the GTINs, Serial numbers, and other data specified under the government decree. Through a relevant combination of serial numbers and GTINs, the CRPT will issue you with a verification code for each item, generated using an asymmetric encryption algorithm.

Step 2


Once the product begins its journey through the supply chain, the digital code acts as an immutable passport that helps agents validate the product at every network junction. During this stage, every transfer of ownership must be recorded.

Step 3


Once the product reaches the dispensaries, the 2D matrices are scanned, and Chestny ZNAK receives the transfer confirmation. After that, the product is ready for sale.

It’s essential to note that, unlike EU and US track and trace requirements, Chestny ZNAK also includes scanning, labelling, and recording of over-the-counter (OTC) drugs– which is the main reason why it’s considered more stringent than other laws.

Step 4


When the medicine is sold by the dispensary, the product must be scanned at the check-out. When that’s done, Chestny ZNAK will automatically receive a message, which says, “The product has left circulation.”

For this to work, dispensaries must have POS cash registers, along with a computer, 2D matrix scanner, internet connectivity, and printers.

Step 5


Lastly, when end-users buy the product, they can scan the 2D codes using the Chestny ZNAK mobile app, called the “main assistant for counterfeit detection and product quality tracking.” Ultimately, under this track and trace system, consumers will be the final gatekeepers of the pharma supply chain.

Russia's Pharma Serialization Regulations


Arguably, Chestny ZNAK track and trace regulations are the strictest in the world. Organizations that do not comply with the guidelines will face penalties and fines, such as “deprivation of liberty” (prison), and, in essence, can be banned from conducting business in Russia.

The serialization guidelines vary by industry, and labelling requirements have gone through a series of changes. However, the fundamentals remain the same:

The Russian Law mandates that all individual units have 2D Data Matrix codes with an 85-character alphanumeric sequence, encompassing at least four information groups – Global Trade Item Numbers (GTIN), serial numbers, verification keys, and verification codes (aka crypto codes). The 2D Matrix must also encode the Foreign Economic Activity Common Nomenclature (FEACN).

Apart from the 2D Matrix codes, the owner of pharma goods must also create Universal Transfer Documents (UTD) at the moment of ownership and then transfer them to the CRPT.

Crypto codes are an essential cog in Chesty ZNAK’s serialization machinery. Initially, every crypto code comprised 88 characters. However, a federal decree released in August 2019 slightly amended the process and cut the drug labelling codes requirement to 44 characters. The codes are issued by the CRPT, available only to authorized representatives, as mentioned earlier.

When you receive the crypto code from CRPT, you must print it as a 2D Matrix code, with minimum grade 2 print qualities.

By including crypto verification, one can unequivocally establish the legitimacy of the applied digital identification code, as the combination of GTIN/Crypto key/ Serial Number/Crypto signature is next to impossible to reproduce or guess. Offline authentication is also possible through a secret algorithm that doesn’t require a database or Internet access.

The Federal State Information System for Monitoring Drug Circulation (FSIS MDC) will centralize the serialization process. Supply chain members need to register with the FSIS MDC and report all batch and serial numbers.

In short, these are the broad strokes of the Chestny ZNAK serialization requirements.

Russia's Pharma Serialization Regulations


Packaging aggregation is a vital element for tracking serialized products and is mandatory under Russian track-and-trace regulations. The requirements outline establishing a parent-child relationship of products at various packaging levels by serializing bundles, shipping boxes, or pallets along with the products.

This hierarchical serialization facilitates granular tracking of pharmaceutical products, as each product doesn’t exist solely on its own but as part of a whole. Such an interconnected system doesn’t allow for any illegal counterfeiting and also streamlines the operations for every supply chain member.

The aggregation requirements also stipulate that all supply chain stakeholders must report every modification made to individual batches. This includes how much of the original batch is left together and where all the removed units went. Most of the reporting responsibility falls on the shoulders of the manufacturers.

Russia's Pharma Serialization Regulations


Once the regulations are fully effective, serialization and aggregation compliance will affect your business far beyond the assembly line. In fact, you will have to exchange data continuously with Chestny ZNAK. Marking the products will also be mandatory for all Russian manufacturers and international exporters.

However, the most complex requirement of the Russian regulation is to add crypto codes to the standard 2D Matrix. Given the technical sophistication of the cryptographic approach and the tight timeline, the industry is unsurprisingly under pressure to fulfil the implementation deadline.

Taking care of all of these extensive requirements may severely affect your day-to-day operations. Therefore, having a track-and-trace partner by your side can help you immensely in implementing an end-to-end system and ensuring chain-wide compliance.


  • Adopt the right technologies for smoother integration and transition
  • Attain end-to-end cryptographic, reporting, and aggregation compliance
  • Train your team effectively in use of the new hardware and software
  • Ensure timely delivery of products in line with all the regulations
  • Around the clock technical support and service
  • Timely software and hardware updates

In a nutshell, by onboarding a track-and-trace solution provider, you can help your organization adapt to the rapidly changing regulatory climate, integrate new systems for end-to-end compliance, achieve better inventory management, and ultimately steer clear of all the legal repercussions arising from non-compliance.


Russian pharma companies and enterprises trading with Russia undoubtedly have a lot to think about. They also need to have up-to-date information.

Moreover, they must be nimble, agile, and ready to adapt to changes to ensure undisrupted operations. Beyond building internal systems, the key to attaining compliance is to collaborate with a solution provider that understands the complexities and nuances of the regulations.

When choosing a vendor, make sure they are an authorized CRPT representative. Ideally, they must have a presence in Russia and be familiar with the language. Although the requirements may seem rigorous, they’re easily surmountable with proper planning and the right partner by your side.

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