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Regulatory “sandboxes” in the sphere of digital innovations will begin to operate in Russia


 
Published on July 31, 2020 the Federal Law "On Experimental Legal Regimes in the Field of Digital Innovation"1 will enter into force in January 2021.
 
The federal law defines the purposes and principles of experimental legal regimes in the sphere of digital innovations, the circle of participants of experimental legal regimes in the sphere of digital innovations, and also regulates the relations connected with their establishment and realization, including change, suspension, termination, monitoring, estimation of their efficiency and effectiveness.
 
As the authors of the law explain, at the moment there is no general mechanism for establishing experimental legal regimes. In the absence of such a mechanism, a varied practice of conducting legal experiments has emerged. For instance, there is information only about the regulatory “sandbox” of the Central Bank of Russia, which announced the beginning of its work in 20182. One of the first products of the “sandbox” was the Sberbank service, a platform that allows you to confirm transactions at a bank’s branch using a digital signature.
 
The objectives of the experimental legal regime are:
 
1) formation of new types, forms and ways of conducting economic activity;
2) development of competition;
3) expansion of the offering, improvement of quality or availability of goods, works and services;
4) increasing in efficiency of state or municipal administration;
5) ensuring the development of science and social sphere;
6) improvement of general regulation based on the results of the experimental legal regime;
7) attraction of investments into development of business activity in the field of digital innovations in the Russian Federation;
8) creation of favorable conditions for development and implementation of digital innovations.
 
Special regulation will be introduced by the initiator - a person who wants to use the relevant benefits. The initiators of the "regulatory sandbox" may be legal entities, entrepreneurs, and in some cases, governmental and municipal bodies.
 
The establishment of the experimental legal regime will be possible if the following four conditions are met simultaneously:
 
1) The applicable general regulation contains requirements that make digital innovation impossible or significantly difficult to implement; 
2) There is a technological possibility to apply digital innovations or preparation is required to use them;
3) The establishment of an experimental legal regime should result in the achievement of one or more of the objectives specified in the law; 
4) The initiator of the regime has provided an assessment of the risks that the new regulation may entail for the values protected by the federal law and has developed measures to minimize such risks.
 
In addition to the above conditions, the legislator has also defined the requirements for the initiator:
 
1) Absence of arrears in taxes, duties and other mandatory payments for the last calendar year, the amount of which exceeds 25 percent of the book value of the initiator's assets, according to the financial statements for the last reporting period;
2) Absence of criminal record with respect to the initiator - an entrepreneurs or a management of a legal entity;
3) The initiator is not in the process of reorganization, liquidation (discontinuation of activity for entrepreneurs), insolvency (bankruptcy) proceedings;
4) The initiator is not a foreign legal entity or it is not Russian legal entity in the registered capital of which the share of foreign legal entities in the aggregate is 50 percent or more.
 
The experimental legal regime can be established for a maximum period of three years and usually in a designated territory. The period may be extended by one year under certain conditions. 
 
The adopted law will provide an opportunity for new innovative products to enter the market, as well as further legal, economic and technical development of the industries specified in the law, and recovery of the economy after the coronavirus pandemic.
 
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