Ministry of Economic Development Explained How to Conduct Payments for Intellectual Property

29 July 2022
Nikita Ayrapetov
Associate
Anna Kuminova
Associate

Ministry of Economic Development published a Letter from 19.07.2022 No. 26614 – KM/D01i “On the elaboration of the Decree of the Russian President No. 322 from 27.05.2022” on its official website.

As it was reported previously, the Decree of the Russian President from 27.05.2022 No. 322 "On the Temporary Procedure of Performance of Obligations to Certain Rights Holders" introduced mandatory payments in rubles for debtors of certain categories of rightsholders of intellectual property and means of individualization (link).

According to explanations of the Ministry of Economic Development, provisions of the Decree apply not only to foreign rightsholders, but to Russian rightsholders too, if they meet one of the following requirements:

  • Publicly supporting or calling for the implementation of sanctions against Russia
  • Prohibited the use of intellectual property and means of individualization on the territory of Russia, either for all or for some individuals or entities after 23 February 2022, if such actions are related to the imposition of sanctions against Russia having no economic viability
  • Ceased, suspended, or significantly restricted their activities after 23 February 2022 in Russia due to the imposition of sanctions or for other reasons having no economic viability
  • Committed acts aimed at discrediting the use of the Russian armed forces and/or the exercise by Russian State bodies of their powers outside Russia, or spread misleading information about the use of the Russian armed forces and/or the exercise by Russian State bodies of their powers outside Russia
  • Spread information on the Internet expressed in an indecent manner, which offends human dignity or public morals, and which is clearly disrespectful to society, the State, the official Russian State symbols or the Russian public authorities

The provisions of the Decree apply to all legal relations on intellectual property use involving a fulfillment of monetary obligations to rightsholders that meet one of the Decree’s requirements, regardless of the date of obligation acquisition or the date of the payment necessity in accordance with the contract or not (regardless of the type of contract or contract obligations).

According to the explanations, only a debtor can open a special O-type account in a bank authorized by the Russian Government1 dedicated to payments for intellectual property use.

When paying to the rightsholder that meets one of the Decree’s exclusions, following the Decree’s provisions is not obligatory. In this case a bank has no right to deny a monetary transfer to such a rightsholder. In addition, the debtor is not obliged to provide proof to the bank that the rightsholder meets one of the Decree’s exclusions.

Furthermore, Decree’s provisions are applicable for sublicensees, if a payment is made to a body that is subject to the Decree (both the rightsholder or the licensee). A similar procedure applies to Russian copyright and related rights management organizations.

1 A bank “Otkritie” is authorized by the Russian Government