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On 30 June 2015, the government published Federal Law dated 29.06.2015 No. 188-FZ “On Amendments to the Federal Law – On Information, Information Technologies, and Protection of Information” and Article 14 of the Federal Law “On the Contract System in the Procurement of Goods, Works, Services for State and Municipal Needs” (hereinafter referred to as the “Law”).[1]

The changes proposed by the Law, are the first step towards ensuring that Russian-manufactured products, such as software, receive priority during state tenders. According to the explanatory memorandum to the Law, with a view to its adoption, it is designed to protect the domestic market of the Russian Federation, assist in the development of the national economy, as well as to support Russian companies operating in the information technologies field.

What will change?

First of all, the Law provides for the creation of a single register of Russian-manufactured programs for computers and databases (hereinafter referred to as the “Register”).

For inclusion in the Register, the ownership of exclusive rights must be proven by the named legal owners (in fact – proving that it was actually manufactured in the Russian Federation), availability of the software on the commercial market, the absence of significant (30 percent or more) payments to foreign persons and their control of Russian organizations, the absence of state secrets in the information describing the software, and in the software itself. Rights holders are commercial and non-profit organizations included in the register of accredited organizations working in the information technologies field.[2]

Moreover, the decision to refuse to include in the Register of the corresponding programs or databases may be appealed by the owner in court within three months fr om the date of such decision.

The procedure for creation, formation and maintenance of the Register, the composition of the information entered into the Register, is subject to direct approval by the RF Government through normative acts.

The Law also amends Article 14 of the Federal Law “On the Contract System in the Procurement of Goods, Works, Services for State and Municipal Needs”. These changes are essentially wider: they affect not only the software industry, but also companies operating in other areas wh ere the government has already established, or plans to establish bans or limits on the admission of foreign products to state tenders.

Thus, the current edition of Part 3 of Article 14 of the Law establishes the possibility to prohibit or restrict admission to state tenders of certain products of foreign production by the decision of the RF Government. The Law, in turn, places an obligation on the customers – if these acts of the RF Government contain exceptions to such prohibitions or restrictions – to prove the impossibility of purchasing products of Russian manufacturers, and to post such a justification in the unified information system.

As a whole, the changes to the Law, give the RF Government the opportunity to provide Russian programs, included in the Register, a priority during the holding of state tenders, as well as to monitor compliance by customers in giving such priority through a unified information system.

At the same time, it should be noted that, if the RF Government should decide on the establishment of a ban or restrictions on the admission of software made by foreign manufacturers to state tenders, in the availability of Russian analogues, to ensure the full-fledged operation of the Law, in line with the objectives for its adoption, the RF Government must develop a procedure for the preparation and placement of justifications for the inability to comply with the prohibitions or restrictions, as well as requirements for the content of such justifications.

Changes made to the Law will come into force on 01 January 2016. Accordingly, it is expected that the RF Government will be vigorously pursuing work on creating normative acts during the year 2015.

[1] See: http://publication.pravo.gov.ru/Document/View/0001201506300082

[2] Register shall be maintained on the basis of the Regulation on State Accreditation of Organizations Operating in the Field of Information Technologies, Decree of the RF Government dated 06.11.2007 No. 758