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July 13, 2021
2021-1332

Russia's law on activities of foreign Internet companies in Russia signed by the President

Executive summary

In May 2021, the Russian Government published Draft law No. 1176731-7 “On the activities of foreign entities on the “Internet” telecommunications network in the territory of the Russian Federation” (the Bill), which is aimed at creating a level playing field for Russian and foreign companies operating on the Internet in Russia.

On 23 June 2021, the Federation Council of the Federal Assembly of the Russian Federation approved the Bill.

On 1 July, the Bill was signed by the Russian President, became Law and was published.

The key provisions are:

  • The Law sets forth a range of measures to compel foreign companies operating on the Internet in Russia (Internet companies) to comply with Russian law. Specifically, these include banning a foreign entity from advertising on an information resource, banning payments from being made to it and banning the display in search results, collection and the cross-border transfer of personal data.
  • To operate in Russia, owners of information resources with a daily audience in excess of 500,000 Russian users will have to open branches or representative offices or establish Russian legal entities that wholly represent the interests of the parent companies and act as the main channel of communication between them and Russian regulators in the territory of Russia.

Detailed discussion

Foreign Internet company

A foreign entity operating on the Internet in Russia (foreign Internet company) is a legal entity that carries on any activities not prohibited in Russia and is the owner of an Internet site and/or a webpage and/or an information system and/or a computer program that are accessed daily by more than 500,000 Internet users located in the Russian Federation.

Activities of foreign Internet companies in Russia

A foreign Internet company is obliged to:

  • Place on its information resource an online contact form for use by Russian citizens and organizations, the requirements for which are to be established by the federal executive body in charge of mass media, mass communication, information technology and communications (Roskomnadzor)
  • Register an account on the official Internet site of Roskomnadzor and use it to communicate with Russian state authorities
  • Open a branch or representative office or establish a Russian legal entity and ensure that the branch or representative office or the Russian legal entity operates in Russian in accordance with the following requirements:
    • Receiving and considering communications addressed by Russian citizens and organizations to the foreign Internet company, and complying with court orders and decisions (demands) made by Russian state authorities in relation to the foreign company
    • Representing the interests of the foreign Internet company in courts
    • Taking measures in the territory of Russia to limit access to and/or remove information that is disseminated on the foreign company’s information resource in breach of Russian law if such a requirement is laid down in Russian legislation on information, information technology and information protection

Types of measures to compel foreign Internet companies to comply with Russian law

Violations of the law may result in:

  • Prohibition on the distribution of advertising for an Internet resource and on the resource itself
  • Prohibition on the making of payments to the company
  • Prohibition on the collection and cross-border transfer of personal data
  • Partial or full restriction of access to a resource

Next steps

The changes take effect from the publication date of the Law, with the exception of provisions on enforcement measures to be imposed for failure by a foreign Internet company to provide information on advertising in accordance with applicable Russian law, which will come into force from 1 September 2021, and the obligation of Internet companies to open a branch or representative office or establish a Russian legal entity, which will come into force from 1 January 2022.

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For additional information with respect to this Alert, please contact the following:

Ernst & Young, Moscow

 

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