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The Russian State Duma is planning to impose limitations on government procurement of foreign software products (draft Law No. 7646787-6, introduced to the State Duma on April 9, 2015). According to the draft law, the Russian Government should establish a state register of “Russian software programs”. A software program would be viewed as a Russian product, if the IP rights for such software are owned by either the state, or a Russian non-governmental organization controlled by the state, or a Russian legal entity 50% or more owned by the state or Russian nationals. According to the draft Law, Russian government buyers (including state-owned corporations) should purchase, by default, only the software included into the state register. In order to be able to purchase foreign software products, the Russian government buyers would have to formally demonstrate that the products listed in the Russian state register do not meet their requirements. The procedure and criteria for the substantiation of purchasing foreign software is to be elaborated by the Russian Government. If adopted, the draft Law might seriously affect trade in foreign software products in Russia.

Author

Alexander Bychkov is a partner in Baker McKenzie's Moscow office. Alexander Bychkov is the co-head of the Firm’s CIS Tax Practice Group and the head of the CIS International Trade and Customs group, which includes professionals working in the Moscow, St. Petersburg, Kyiv and Almaty offices. In addition, he is a member of the Firm’s Pharmaceuticals & Healthcare group. Since 2006 Mr. Bychkov has been consistently recognized as one of the leading professionals in the tax field within Russia and across the CIS. His practice is recognized by Chambers and International Tax Review.

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