Russian Federation

[RU] Restrictions on payments to “unfriendly” rightsholders

IRIS 2022-7:1/13

Andrei Richter

Comenius University (Bratislava)

On 27 May 2022, the President of the Russian Federation issued a decree “on the provisional procedure for the compliance with the obligations to certain rightsholders”.

The decree provides instructions related to the way significant groups of rightsholders, mostly foreign ones, are entitled to receive debts, penalties, fines or other payments from Russia for the use of their intellectual property. The decree applies to the payments intended for the following groups:

- foreign rightsholders from the “unfriendly states” that are listed in the ordinance of the Government of Russia of 5 March 2022 (this list comprises 48 states, including all the states of the EU, the U.K., the U.S., and Canada, which have imposed sanctions on Russia and its citizens), as well as persons under their control;

- rightsholders who have publicly supported or called for the imposition of sanctions;

- rightsholders who have either restricted the use of their intellectual property in Russia or discontinued their business operations in Russia following 23 February 2022;

- rightsholders who have been involved in activities such as spreading “false information” discrediting the use, “in the name of world peace and security”, of Russia’s armed forces and/or Russian state actions abroad;

- rightsholders who have disseminated online information that presents a clear disrespect to Russian society, public bodies, official symbols or the Constitution, or undermines public morals.

From 27 May 2022, Russian persons (comprising the Russian state, regional state authorities, municipalities and Russian residents) are allowed to make payments for the use of intellectual property to such rightsholders by transferring funds, in Russian rubles only (according to the official rate of exchange), to a special type of account opened in specific banks in the name of a particular rightsholder (without the presence or consent of the latter). Consent, however, is necessary to start payments to the account.

Upon meeting these conditions, Russian licensees retain the legal right to continue using the relevant intellectual property unrestrictedly in accordance with the terms that were originally established.

Any transfer from a special account to another bank account is permitted only upon individual authorisation from the Governmental Commission on Foreign Investments Control.

The decree envisions certain exceptions to this procedure. The provisional procedures are not defined in time and may be changed or cancelled by another decree of the President.