New law “grounding” foreign internet resources
Federal Law No. 236-FZ On the Activities of Foreign Internet Entities in the Russian Federation (further the “Law”) was signed, published, and entered into force immediately on July 1, 2021. This Law provides for mandatory requirements, prohibitions, and restrictions on foreign entities operating on the internet in Russia.
The law will affect large foreign social networks, video hosting sites, messengers, mail services, search engines, hosting providers, online stores, gaming services, and advertising agencies.
The main requirements and restrictions will take effect in 2022.
Who will be subject to the Law?
The Law applies to foreign entities (legal entities and individuals, as well as organizations that are not legal entities) operating on the internet in Russia. Activity on the internet is deemed performed in Russia if it is intended to users located in Russia.
The Law lists the following categories of foreign entities operating on the internet in Russia:
- Owners of information resources (websites, information systems, software)
The Law will not affect all owners of internet resources. It will affect only large ones whose daily number of users from Russia exceeds 500,000 and only if they meet one of the following conditions:
- Information posted on the information system is posted in Russian (languages of the peoples and republics of Russia);
- Advertising intended to attract consumers from Russia is disseminated on the information system;
- The foreign entity processes data on users from Russia;
- The foreign entity receives money from Russian users.
- Hosting providers, advertising system operators, organizers of information dissemination on the internet
New obligations for foreign entities operating on the internet
Foreign entities operating on the internet in Russia must:
- Ensure that an electronic form is available for Russian users to send requests;
- Open an online account with Roskomnadzor;
- From January 1, 2022 onwards, set up a branch/representative office or a subsidiary in Russia;
- Install the software proposed by Roskomnadzor to determine the information resource’s number of users.
The foreign entity’s branch, representative office, or subsidiary is set up to interact with Russian users and comply with court decisions and claims from Russian state authorities against the foreign entity, in particular, to restrict access to information or remove information from the information resource if the dissemination of such information is contrary to Russian law.
Roskomnadzor will be in charge of compiling a list of the foreign entities operating on the internet in Russia.
Penalties for foreign entities operating on the internet in Russia
If the foreign entities listed in the Law fail to comply with Russian law, from September 1, 2022, they will:
- Be required to inform their users of the breach of Russian law;
- Be banned from advertising themselves and/or their information resource;
- Be banned from disseminating advertising intended to attract consumers from Russia;
- Be banned from transferring funds from Russian users to foreign entities;
In such case, foreign entities are included in a special list. Banks, payment agents, telecom operators, and mail operators will be prohibited from transferring monetary funds to any legal entity included in the list.
A foreign payment service provider that has accepted payment, transferred monetary funds, including electronic money to such foreign entity will be included in another special list, and the transfer of monetary funds will also be restricted for such service provider.
Roskomnadzor is entitled to carry out a “test purchase” to identify credit organizations that violate the ban on money transfers to foreign entities included in special lists.
- Be banned from search results;
- Be banned from collecting and cross-border transferring personal data;
- Have their access partially restricted;
- Have their access completely restricted.
The Law may be “bypassed” if the daily number of users from Russia is less than 500,000 for 3 months. To do so, foreign entities must submit the appropriate application.
We look forward to advising you on the ins and outs of the law “grounding” foreign internet resources as well as on how relevant it is to your company.
If you have any questions or would like to discuss this matter further, please contact Anton Kabakov or Natalia Vorobyeva.
Truly yours,