Legal news: large foreign IT companies are obliged to open branches in Russia

10/06/2021

This requirement applies to foreign companies having more than 500,000 Russian users daily. Until 1 January 2022, to continue operating in our country, they have to open representative offices, branches or establish Russian legal entities that will represent the interests of parent companies. The new operating rules for IT giants are stipulated in Federal Law No. 236-ФЗ.

So far, the list includes 20 online resources: messengers (WhatsApp, Telegram and Viber), social networks (Facebook, Instagram, TikTok and Twitter), search engines (Google and Bing.com), video hosting services (YouTube and Twitch.tv), email service (Gmail), online stores (Aliexpress.com, Ikea.com and Iherb.com), hosting providers (Amazon, Digital Ocean, Cloudflare, GoDaddy), and Wikipedia.org.

A complete list of foreign IT companies covered by the law will be posted on the official website of Roskomnadzor (Order of Roskomnadzor No. 129 dated 16.07.2021).

If a foreign IT company fails to comply with the requirements of the law, it may face a whole list of restrictions. For example, a ban on the distribution of advertising on an information resource, search results, making payments to an information resource, the collection and international transfer of personal data of Russian citizens. As a last resort, the possibility of partial or complete blocking of the offending site is stipulated.

Regulation of large global IT companies’ operations is a common legal practice in many countries. The purpose of the adopted law is to regulate and establish equal conditions for Russian and foreign IT companies.

Roskomnadzor advises IT giants to think about creating a branch or opening a representative office now, because its accreditation will take at least a month after the submission of all the documents.