27.03.2014

Overview of certain changes to Russian legislation in march 2014

CIVIL LAW

The Federal Law dated 12 March 2014 № 35-FZ introduces amendments to the provisions of the Parts 1, 2 and 4 of the Civil Code of the Russian (the Civil Code) and other regulatory acts of the Russian Federation regarding the rights to results of intellectual activity and means of individualization. 

 

Most of the amendments become effective from 1 October 2014, in particular:

-         the right of persons holding jointly an exclusive right to an intellectual property object to enter into agreement regulating the procedure for disposal of such right;

-         the imperative rule under which proceeds from joint disposal of an exclusive right should be distributed equally among the right holders;

-         the right of a right holder to terminate unilaterally an agreement on disposal of an exclusive right only in the event of a material breach by the acquirer of the payment obligation;

-         the prohibition for a right holder to use a result of intellectual activity for which it granted an exclusive license; 

-         the right of a right holder to grant open nonexclusive licenses for works of literature, science and art to general public.

The provisions of a newly introduced Article 358.18 of the Civil Code regulating pledge of exclusive rights enter into force starting from 1 July 2014.

The following changes become effective from 1 January 2015:

-         the right of right holder to grant the right of use of a work of art free of charge to general public by means of placement of the respective declaration on the Internet site of an authorized body (to be determined by the Government of Russia);

-         clarification of the procedure for disposal of an exclusive right to works of literature, science and art and neighboring rights;  

-         decrease up to five years of the effective term of an exclusive right to utility models;

-         the right of a right holder to demand at its discretion from an infringer payment of compensation instead of damages.

The respective provisions of the Civil Code as amended shall apply to the relations that commenced after the date of their entry into force and to the relations that commenced before the date of their entry into force – only in the part of rights and obligations that will commence after such date.

PHARMACEUTICAL INDUSTRY  

The Administrative Regulation for Performance by the Ministry of Industry and Trade of the Russian Federation (Minpromtorg) of the State Function for License Control of Medicines for Medical Use Manufacturing, approved by the Order of Minpromtorg №1607 dated 4 October 2013, registered by the Ministry of Justice on 3 March 2014.

The Regulation establishes, in particular:

-         licensing requirements to a licensee for medicines manufacturing;

-         the rights, duties and restrictions with respect to officials of Minpromtorg in the course of exercising  licensing control;

-         the rights and duties of persons with respect to whom licensing control is exercised;

-         forms, procedures and terms for exercising  licensing control;

-         extrajudicial procedure for appealing against decisions and actions (omission) of officials of Minpromtorg.

A period of examination in the course of licensing control (from the date of commencement to the date of drawing an act upon results of the examination) cannot exceed twenty business days. If a licensee is a subject of small-size business the total period for planned on-site examinations cannot exceed fifty hours per year for a small-size business and fifteen hours per year for a micro business.

Minpromtorg by its Order of dated 11 March 2014 № 387 approved the Procedure for Issuing a Passport of a Medicine for Medical Use (Attachment 1) and the form of a passport of a medicine for medical use (Attachment 2).

Passports of medicines shall be issued to exporters of medicines for the purposes of provision to importers upon their request.

A decision on issuing of a passport of medicine shall be adopted by the Department for Development of Pharmaceutical Industry of Minpromtorg within thirty calendar days after submission of the required documents by an applicant. The passport itself shall be issued to the applicant within three business days following its signing off and registration.

The information on the passports issued shall be available on the official site of Minpromtorg (http://www.minpromtorg.gov.ru/services).

BANKING AND FINANCING

The Instruction of the Bank of Russia dated 27 December 2013 № 148-I "On the Procedures for Securities Issuing by Credit Organizations in the Territory of the Russian Federation", registered by the Ministry of Justice on 28 February 2014 and entering into force upon expiry of ten days following its publication in the Bulletin of the Bank of Russia.

The Instruction replaces the Instruction of the Bank of Russia dated 10 March № 128-I "On the Procedures for Securities Issuing by Credit Organizations and Their Registration in the Territory of the Russian Federation" and regulates the stages and terms for securities issuing by credit organizations, in particular, in the event of issuing of:

-         shares of a credit organization at its establishment;  

-         shares of a credit organization in the course of change of its authorized capital;

-         bonds; 

-         options.

Issues (additional issues) of issue securities as well as securities prospects of credit organizations are subject to the state registration with the Department for Licensing of Activity and Financial Rehabilitation of Credit Organizations of the Bank of Russia and territorial institutions of the Bank of Russia (depending who is an issuer).

The Instruction of the Bank of Russia dated 25 February 2014 года № 149-I "On the Organization of Inspections Activities of the Bank of Russia",that became effective from 24 March 2014 and abrogated the Instruction of the Bank of Russia dated 01 December 2003 № 108-I, establishes a new procedure for control of credit organizations.

In particular, apart from complex and theme examinations specialized examinations will be conducted only with respect to a separate issue of a credit organization’s (its branch) activity within  a certain period of time, inter alia with respect to compliance with the limits for mandatory reserves, correspondence of assets, cash, operations with foreign currency cash and checks. The period of a specialized examination should not exceed twenty business days.

An unscheduled inspection may be conducted, in particular, due to a failure by credit organizations – operators of payment systems to perform prescriptions of the Bank of Russia, change of financial stability, economic position and financial condition of credit organizations and prospects of their activity.

The Instruction amends as well the procedure for coordination of examinations, formalization of the authority for their conducting by officials of the Central Bank and formalization of their results.

CONSTITUTIONAL LAW

The Federal Constitutional Law dated 21 March 2014 № 6-FKZ "On Adoption to the Russian Federation of the Republic of Crimea and Formation within the Russian Federation of New Entities - the Republic of Crimea and the City of Federal Significance Sevastopol" that came into force on 21 March 2014 (the date of entry into force of the Agreement between the Russian Federation and the Republic of Crimea on Adoption of the Republic of Crimea to the Russian Federation of and Formation within the Russian Federation of New Entities signed on 18 March 2014 in Moscow) regulates the issues in connection with economic, financial and legal integration of the Republic of Crimea and Sevastopol City to the Russian Federation within the transition period which will last until 1 January 2015.

Starting from 16 March 2014 (the date of adoption of the Republic of Crimea to the Russian Federation):

-       new entities of the Russian Federation are formed - the Republic of Crimea and the city of federal significance Sevastopol (Crimea and Sevastopol);

-       the citizens of the Ukraine and stateless persons permanently residing by the above date in Crimea and Sevastopol are deemed citizens of the Russian Federation (except for persons who will declare within one month their will to keep the citizenship they and/or their minor children have or remain stateless).

The citizens of the Ukraine permanently residing in Crimea and Sevastopol who acquired the citizenship of the Russian Federation are entitled to state pensions, allowances and social security benefits at the level not lower that established by 21 February 2014. 

During the transition period in Crimea and Sevastopol territorial divisions of Russian federal executive authorities, prosecutor’s offices, federal courts, notarial and advocates’ chambers will be established. Before establishment of Russian courts justice shall be exercised in the name of the Russian Federation by the courts acting by 16 March 2014.

State and municipal bodies, establishments and organizations functioning in Crimea and Sevastopol by 16 March 2014 may continue to function in their organizational forms until their legal status is regulated in accordance with the laws of the Russian Federation.

Documents issued by the state and other official authorities of the Ukraine, the Autonomous Republic of Crimea and Sevastopol City shall be effective in Crimea and Sevastopol without any confirmation on the part of the Russian Federation, Crimea and Sevastopol unless otherwise is implied by the respective documents or the nature of relations that they concern. Such documents include the documents confirming civil status, education, property right, right to pensions, allowances, compensations and other social security benefits, right to medical aid, permits and licenses (except for licenses for banking operations and noncredit financial organizations).

The legislation of the Russian Federation became effective in Crimea and Sevastopol starting from 16 March 2014, except for tax and budget legislation which will become effective from 1 January 2015. Before this date Crimea and Sevastopol will be entitled to introduce taxes and tax concessions as well to regulate tax control issues.    

Ruble is an official currency in Crimea and Sevastopol. Ukrainian hryvnia is allowed in circulation before1 January 2016.

Credit organizations having a license issued by the National Bank of the Ukraine may conduct banking operations before the end of the transition period. Non-credit financial organizations registered in Crimea and Sevastopol and having permissions for the respective activities issued by the state and other official authorities of the Ukraine may conduct their activity subject to specific regulation established by Russian laws. Credit organizations may acquire a license of the Bank of Russia, non-credit – a permission for the respective activity in accordance with the laws of the Russian Federation before 1 January 2015.

INTERNATIONAL LAW

The Federal Law dated 12 March 2014 No. 24-FZ ratified the Agreement between the Russian Federation and the People’s Republic of China on Alleviation of Trips of Citizens signed on 22 March 2013 in Moscow which replaces the basic Agreement between Russia and China on Mutual Trips dated 2000. 

The Agreement provides for simplification of visa requirements for certain categories of citizens of Russia and China and for introduction of visa-free regime for the holders of official passports of two countries for a term of up to 30 days (in addition to visa-free regime for the holders of diplomatic passports).