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Newsletter Articles

Digest of new laws, proposals, case law and decisions of the state authorities in regard to media, information, technologies and foreign companies

29 Apr 2022 Europe

I Legislation — new laws, amendments and proposals

a)    Relevant New Laws and Amendments

  • Decree of the President of the Russian Federation from March 30, 2022 N 166 "On measures to ensure the technological independence and security of the critical information infrastructure of the Russian Federation”

By decree of Russian President Vladimir Putin, from March 31, the Russian Federation introduced a ban on public procurement of foreign software for use on critical infrastructure without approval. From January 1, 2025, the ban will take effect not only on the purchase, but also on the use of such software.

  • Federal Law N 63-FZ from March 25, 2022 "On Amendments to the Criminal Code of the Russian Federation and Articles 150 and 151 of the Code of Criminal Procedure of the Russian Federation"  

Established criminal liability for public dissemination under the guise of reliable messages of deliberately false information containing data on the exercise by Russian state bodies of their powers outside the territory of the Russian Federation in order to protect its interests, maintain international peace and security.

  • Decree of the Government of the Russian Federation from March 29, 2022 N 506 "On goods (groups of goods) in respect to which certain provisions of the Civil Code of Russian Federation (on the protection of exclusive rights to the results of intellectual activity expressed in such goods, and the means of individualization with which such goods are marked) cannot be applied"

Responsibility for parallel imports of a number of foreign-made goods has been abolished. The document allows the import into the Russian Federation of demanded original goods of foreign production without the consent of the copyright holders. The list of these goods will be approved by the Ministry of Industry and Trade of Russia on the proposals of the federal executive authorities.

  • Decision of the Board of Directors of the Bank of Russia from April 1, 2022 "On establishing the acceptable amount of single operations between residents and non-residents"

The list of contracts, which are not subject to the restriction on the amount of prepayment (advance) in favour of non-residents established by the Bank of Russia, has been expanded. The Bank of Russia has set a limit on the amount within which residents can make an advance payment in favour of non-residents under certain types of contracts (30% of the amount of obligations under the contract).

  • Letter of the Bank of Russia from April 7, 2022 N 31-4-1/507 "On the Application of paragraph 1.7 of Official Clarifications of the Bank of Russia"

The issue of the types of transactions with securities and real estate, which are subject to a special procedure for the implementation, established by the Decree of the President of the Russian Federation was clarified. 

Taking into account paragraph 12 of the Decree of the President of the Russian Federation of 05.03.2022 N 95 "On the temporary procedure for fulfilling obligations to certain foreign creditors", a special procedure for the implementation (execution) by residents of transactions (operations) entailing the emergence of ownership of securities and real estate does not apply to transactions (operations) with persons who simultaneously meet the requirements of subparagraphs "a" and "b" of paragraph 12 of Decree N 95. Thus, "special foreign persons" include persons who simultaneously meet the requirements of subparagraphs "a" and "b" of paragraph 12 of Decree No. 95.

b)    Proposals and Parliament Bills

The Federal Antimonopoly Service proposed to completely ban inside Russia contracts linked to foreign currency or world commodity indices. This may lead to the need for full prepayment of goods and the rejection of long-term contracts. 

  • The provisions on liability for parallel imports may be abolished

The Ministry of Industry and Trade has developed a draft bill that provides for the abolition of liability for parallel imports of products "according to a certain range." The FAS press service mentioned that proposals were being discussed to extend parallel imports to all goods, with only certain exceptions.

  • Bill on criminal liability for implementation of sanctions has been submitted to the State Duma

Amendments to Part 2 of Art. 201 of the Criminal Code (“Abuse of Power”) are being considered in the form of adding a new aggravating circumstance “enforcement of a decision of a foreign state, an alliance of foreign states or an international organisation to introduce restrictive measures against the Russian Federation.” The execution of foreign sanctions will be punished by a fine of up to 1 million rubles or forced labour for up to five years, with possible deprivation of the right to engage in certain work for up to three years. This offence can also result in imprisonment for up to 10 years.

Due to the permission of the Cabinet of Ministers of parallel imports, a legal conflict arose, since equipment can be supplied to Russia without the permission of the copyright holder. The Ministry of Digital Development has prepared amendments to the Code of Administrative Offences; the moratorium on fines will affect sellers, but not manufacturers of equipment.

  • Cinemas may be allowed not to pay for music for films from “unfriendly countries”

Andrey Kutepov, the head of the Federation Council Committee on Economic Policy, has prepared proposals to support Russian cinemas, including imposing a moratorium on payments for the use of author's music in films and cartoons for counterparties from unfriendly countries.

Together with the Prosecutor General's Office, the Ministry of Internal Affairs of Russia is considering such a proposal. The latter was announced by the Deputy Minister of Internal Affairs of the Russian Federation, head of the Investigation Department Sergei Lebedev. As Lebedev stated, the modern realities of combating cybercrime require changes to the legislation that allow law enforcement officers to obtain information from the databases of banking institutions and telecom operators.

Though scholars and lawyers sceptically look up to such novels: probably, this will become one more sphere for violations of police and investigative departments of human’s rights. And the provision itself does not seem to have to do anything with cybercrimes.

The State Duma is planning to consider such amendments to the Tax Code this spring. The bill provides for mandatory reporting to the Federal Tax Service on the turnover of digital assets that exceed 600,000 rubles in one year. The Central Bank insists that the circulation of cryptocurrencies will lead to the growth of the shadow economy and loss of tax revenues. 

  • “Rusbrand” asked not to punish businesses for the Meta symbols

Another international association has asked the Russian authorities not to punish businesses for selling products with Instagram and Facebook symbols on their packaging (owned by Meta Platforms Inc., which is recognized as an extremist organization in Russia). Corresponding letters were sent to the Ministry of Industry and Trade and the Ministry of Economic Development by the Rusbrand Association (which unites Nestle, Danone, PepsiCo and others).

  • Roskomnadzor: the law on strengthening data protection will allow litigation with foreign IT companies in the Russian Federation

According to the press-service of Roskomnadzor, a  bill was submitted to the State Duma, according to which “Russians will be able to demand that foreign operators observe all the rights that Russian legislation provides”. The text of the proposal was not published, due to which no peculiarities can be added. The bill also establishes additional protection of biometric personal data of minors.

  • Draft Federal Law N 101234-8 "On Amendments to the Federal Law "On Personal Data" and Other Legislative Acts of the Russian Federation on the Protection of the Rights of Personal Data Subjects"

A draft law on the possibility of limiting the cross-border transfer of personal data has been submitted to the State Duma. Among others, the bill introduces the obligation of operators to immediately inform authorised authorities about incidents with their personal data bases, as well as the obligation to ensure continuous interaction with the state system for detecting, preventing and eliminating the consequences of computer attacks on information resources of the Russian Federation.

The Central Bank is considering the option of extending the deadlines for the mandatory sale of currency (now exporters must sell it within three business days after being credited to the account), changing the minimum sales threshold, in particular, calculating the standard based on import costs and other parameters. The Central Bank also said that it does not have the authority to limit the bank margin when selling foreign exchange earnings.

  • The Government considers softening the draft bill on the ban on currency clauses in transactions within the Russian Federation

The Cabinet of Ministers is discussing the possibility of expanding the list of transactions that will not fall under the proposed FAS ban on contracts with payment linked to foreign currency or world commodity indices. The authorities also want to remove from the bill the rule according to which payment for contracts that already have a currency clause will be calculated at the rate of January 1, 2022, if the parties do not adjust it within 30 days from the date the law enters into force.

  • The Cabinet of Ministers will support the bill proposing criminal punishment for the implementation of sanctions

Due to this bill responsibility is provided, in particular, for refusing to work with banks that fell under sanctions. The government has no "conceptual objections" to the proposed measures of criminal liability: the state has the right to establish penalties for socially dangerous acts, the Cabinet's draft response to the bill says. The Russian Union  of Industrialists and Entrepreneurs (RSPP), on the other hand, opposed the bill: as it could push companies to accelerate their exit from the domestic market.

  • Draft Federal Law N 104796-8 "On external administration for managing an organization"

The State Duma received a draft law on the external management of foreign organizations that leave Russia An external administration may be appointed by a court decision in relation to organizations that are essential for ensuring the stability of the economy and civil circulation, protecting the rights and legitimate interests of citizens in the Russian Federation as a whole or in a separate region, in which foreign persons directly or indirectly own more than 25% of the shares (shares).

  • The authorities of the Russian Federation froze the project on external management in foreign companies

At the same time, a few days after submitting the Draft Federal Law “On external administration” the Russian authorities announced to have put on hold the adoption of the bill. Departments continue to work on the document, but do not yet plan to submit it to the government. The fact is that most companies have only declared their withdrawal, but so far they prefer to negotiate and comply with all obligations. The government is ready to meet them halfway, so it intends to leave the bill on external management as a last resort.

  • The Ministry of Industry and Trade has proposed a targeted approach for parallel imports

The agency proposes to import into the country without the permission of the copyright holders only products of brands that have stopped or suspended work in the Russian Federation, and not any goods. Now a list of such brands is being formed. Manufacturers of clothes, shoes and other goods can be listed within it. 

II Case Law — significant court decisions

  • The court banned the activity of Meta in Russia

The Tverskoy Court of Moscow during a court session on March 21, ruled to immediately ban the activities of Meta (owning Facebook, Instagram, WhatsApp) in Russia in connection with the extremist activities of the American company. As the representative of the Prosecutor General's Office noted, the use by citizens and companies of Facebook, Instagram and WhatsApp, which belong to the American company Meta, cannot be recognized as extremism. He also added that after the ban, users still have the opportunity to technically bypass the blocking. Yet, only the practice will show how the designated Meta ruling will be applied in regards to the citizens.

After “Meta” was designated as an extremist organisation, few other suits were filed against foreign organisations. Lawyers do not look optimistically on the issue. 

  • Consideration of the lawsuit against Apple has begun in Moscow

The Presnensky District Court of Moscow accepted for consideration the lawsuit of the “Public Consumer Initiative” against the Russian branch of the American company Apple, Apple Rus LLC. The public organisation demands that the actions of the defendant, who suspended the import, sale and maintenance of products in Russia, be declared illegal, so that the company is forced to stop these actions, and that the accounts and property of the subsidiary would be arrested.

  • The Magistrate's Court registered two administrative protocols against the non-profit Wikimedia Foundation Inc. (manages the infrastructure that powers Wikipedia)

Claims against the resource are related to the refusal to remove false information about the special operation “to protect” Donbass. The fund may face a fine of up to 8 million rubles.

  • Class action of Russian users against Netflix

Russian users filed a lawsuit with the Khamovnichesky District Court of Moscow against Netflix for 60 million rubles. The basis for the lawsuit is a “violation of the rights of Russian users in connection with the unilateral refusal of Netflix to provide services in Russia”.

III Significant warning or punishment decisions made by relevant state authorities

  • Internet service "Wikipedia" will be brought to administrative responsibility for not deleting illegal information

Roskomnadzor will draw up a protocol on an administrative offense under Art. 13.41 of the Code of Administrative Offences of the Russian Federation in relation to the Internet portal "Wikipedia" for failure to remove inaccurate socially significant materials on the topic of a “special military operation” of the Russian Armed Forces in Ukraine, as well as other prohibited information. Due to which Wikipedia may face a fine of up to 4 million rubles.

  • FSTEC will revoke certificates from foreign developers

The Federal Service for Technical and Export Control has temporarily suspended the validity of certificates for software products of foreign companies that have stopped working in Russia. As of March 25, 56 certificates have already been suspended. If companies do not guarantee technical support for their solutions within 90 days, FSTEC will revoke their certificates.

  • Introduction of censorship

Roskomnadzor was previously mentioned to be not a censorship agency - the reasoning of the authorities was due to the notion of censorship, which implies prohibiting information before publication, while Roskomnadzor punishes after the fact. But now the RKN officially demands not to publish Zelensky's interview even before it is published. Therefore, excuses do not work: now the situation looks like a classic censorship. Which is a 100% violation of the Constitution of the Russian Federation.

  • Actions against Google LLC for non-compliance with Russian law

Considering “numerous violations of Russian law” by the American IT company Google LLC, Roskomnadzor decided to introduce coercive measures of informing and economic nature. In particular, the following measures will be applied to Google and its information resources: 

- informing Internet users by means of search engines about violations of Russian legislation by Google LLC;

- a ban on the distribution of advertising by Google LLC and its information resources as an object of advertising.

The above measures of informing and economic nature in relation to Google LLC will remain in force until the IT-company completely eliminates violations of Russian law.

  • Roskomnadzor: to remove restrictions

Roskomnadzor demanded that the administration of the Google search service immediately remove restrictions on the search results of the official websites of Russian government agencies, as well as restores access to the video recording of the briefing held by the official representative of the Russian Foreign Ministry Zakharova M.V., to the “Duma TV” channel of the State Duma of the Russian Federation on video hosting YouTube and Russian state media (VGTRK channels).

  • Roskomnadzor drew up two more administrative protocols against Google for not deleting illegal information 

On April 14, 2022, Roskomnadzor drew up two more administrative protocols against the American IT company Google LLC under Parts 2 and 4 of Art. 13.41 of the Code of Administrative Offenses of the Russian Federation for the failure of the administration of the YouTube video hosting to remove materials recognized by the General Prosecutor's Office of Russia and court decisions as prohibited. In the near future, these protocols will be submitted to the court for consideration and determination of the amount of fines.

The protocols against Google provide links to fake materials that discredit the Armed Forces of the Russian Federation, as well as to YouTube videos of extremist nature with calls for violent actions against Russian military personnel, materials of extremist organizations such as the "Right Sector" and the nationalist regiment “Azov”.

According to Russian law, failure to remove this kind of unreliable materials within the prescribed period from the date of receipt of the relevant request from Roskomnadzor, the site owner faces administrative liability in the form of a fine of up to 4 million rubles. For non-removal by the resource owner of materials containing calls for extremist activities, a fine of up to 8 million rubles may be considered. 

  • Roskomnadzor demanded that Google immediately take measures to exclude threats against Russian users from its services

Roskomnadzor sent a request to Google LLC to immediately take measures to exclude threats against Russian users from the company's services. Earlier, a “violation of an extremist nature” was detected in the operation of the Google.Translate service. The specified service, when entering the phrase “dear Russians” for translation, offered Russian users to replace it with a translation of the phrase “dead Russians”. Moreover, there were no such offers for search queries mentioning other nationalities.

On April 11, 2022 Google LLC has fixed an error in the Google Translate service when translating the phrase “dear Russians”, due to which Roskomnadzor approached the company with a demand.