Maria Ostashenko

Maria Ostashenko

Partner
Maria Ostashenko

Chambers Europe

She is pleasant and kind to work with, responds fast, and has a good understanding of the situation and what needs to be done.

Biography
Recent work
Publications and Insights
Rankings and awards

Maria Ostashenko is a Partner at ALRUD Law Firm, heading Commercial, Intellectual Property and Data Protection and Cybersecurity practice areas.

Leading team of Commercial practice Maria advises ALRUD clients on managing credit risks of parties, on forms of legal presence and models of conducting business in Russia, supports launching start-ups and implementation of complex projects related to international contracts.

In the Intellectual property area Maria renders legal support for formalizing IP rights, use, management and protection of brands and intangible assets, conducting marketing campaigns and advertising. She possesses extensive experience of resolving disputes regarding intellectual property, including alternative dispute resolution.

Maria represents international clients in the matters involving data protection regulation in Russia, advises on obligations of operators related to data processing, including cross-border data transfers, structuring data flow between the members of international groups.

Maria supports Russian and foreign clients providing her expertise in areas including pharmaceuticals and healthcare, FMCG, banks and financial institutions, retail trade, telecommunications, media and technology.

Maria is a frequent speaker at major Russian and foreign conferences and workshops, and an author of many analytical articles published in legal periodicals. Maria is a member of International Bar Association (IBA), International Trademark Association (INTA), International Technology Law Association (iTechLaw), International Distribution Institute (IDI), International Association of Privacy Professionals (IAPP). Maria also took part in working on the draft amendments to the Civil Code of the RF and presently conducts workshops on the Civil Code developments.

Maria Ostashenko graduated from the Moscow State University in 2004 and was awarded a LL.M. degree in private law by the Russian Private Law School by the President of the RF in 2006. Maria joined ALRUD team the same year.

Include advising:

An innovative biopharmaceuticals manufacturer, global manufacturing leader in orphan disease treatment,

on relations with distributors in Russia and CIS countries, marketing strategy and activities.

A world-famous US manufacturer of smart phones and tablets

on issues related to the Client’s advertising campaigns in Russia.

A UK luxury fashion brand

on the issues related to business activities in Russia, including on entering into distribution agreements and importing products into Russia.

A retail group managing a worldwide coffeehouse chain

on entering into franchise agreement with a Russian partner and importing goods into Russia.

An international payment system

regarding Russian data protection legislation requirements applicable to the Client’s products and to cross-border data transfers within the company group.

Numerous clients from the retail industry

on protecting brands against infringements in the internet.

Partner webinar of ALRUD and the Russo-British Chamber of Commerce
On may 20, the partner webinar of ALRUD Law firm and the Russo-British Chamber of Commerce 'Terms of trade and customer contracts - the key points to safeguard Businesses' was held. During the webinar, the experts discussed the most relevant issues of the legal mechanisms to prevent risks for business, which may occur in case of extraordinary and unforeseeable circumstances. The speakers were Maria Ostashenko, ALRUD Partner and Head of Commercial, Intellectual property, Data Protection and Cybersecurity practices and Ksenia Erokhina, ALRUD Senior Associate.
1589922000000
A guide to contract work during the crisis
In times of the ongoing crisis, associated with the spread of the novel coronavirus infection (COVID-19), and the introduction of epidemiological requirements and restrictions, many businesses have faced difficulties with contractual performance, including the failure in supply, cancellation of scheduled events and often cutbacks in profits and the impossibility to perform monetary obligations. In such a situation, companies are forced to decide the future of concluded contracts, at short notice, and may seek legal means to properly perform their obligations, or to distribute the risks relating to suspension, or termination, of obligations that have become difficult, or impossible, to perform. This guide does not purport to cover all possible situations regarding the failure to perform commercial contracts during the crisis. However, we have done our best to collect answers to the most common legal issues about contract work, during financial and other shocks faced by Russian companies and their foreign partners. 1. What to do with a contract, performance of which has become impossible, or unprofitable, in times of the crisis? Depending on the specific circumstances, the contract can be terminated due to the impossibility of performance (Articles 416 and 417 of the Civil Code of the Russian Federation), amended, or terminated, due to a material change of circumstances (Article 451 of the Civil Code of the Russian Federation). You can suspend performance and exclude liability for a delay due to ‘force majeure’ (Clause 3 of Article 401 of the Civil Code of the Russian Federation), or restructure the obligations of the parties, by modifying the terms of the contract (on price, terms, performance, etc.), or by terminating it (unilateral refusal, set-off, novation, compensation for release from obligations etc.). The set of tools, and the choice of a specific instrument, depends both on the conditions of the concluded contract and on the actual circumstances of its performance. At the same time, it is necessary to take into account the specifics of the applicable legislation and enforcement practices, as well as to ensure proper formalization, in order to exclude the risk of subsequent judicial challenge. 2. In what cases, and how, can a contract be terminated due to the impossibility of its performance? The occurrence of force majeure circumstances does not in itself terminate the obligation if performance remains possible after such circumstances have ceased to exist. However, in cases where performance of an obligation is hindered by physical impossibility (that is, the obligation from the contract cannot be objectively performed by any person1), or legal impossibility (when the obligation can be physically performed, but this will be a violation of an act of a state authority, or local government), such obligation shall terminate automatically. Physical impossibility includes, in particular, the loss of an individually-defined object intended for transfer, or use, under the contract. Legal impossibility includes the introduction of export, or import, restrictions. It is important that the circumstance that led to the impossibility of performance of the contract arises after its conclusion, and does not depend on any of the parties. The Supreme Court of the Russian Federation in the “Review on certain issues of judicial practice related to the application of legislation and measures to counteract the spread of novel coronavirus infection (COVID-19) No. 1 in the Russian Federation", approved by the Presidium of the Supreme Court of the Russian Federation of April 21th, 2020 (“Review No. 1”), confirmed that the spread of novel coronavirus infection, and the restrictive measures taken in connection with this, could lead to the termination of contractual obligations due to the complete, or partial, impossibility to perform them, on the basis of Articles 416 and 417 of the Civil Code of the Russian Federation. To terminate the contract due to the impossibility of its performance, prepare a written notice on the termination of the contract, indicating the circumstances that impede performance of contractual obligations, and send such notice to your counterparty at the address of registration (indicated in the Unified State Register of Legal Entities, or Unified State Register of Individual Entrepreneurs), or at the address indicated in the contract. 3. In what cases, except as indicated in paragraph 2, is a party entitled to initiate the termination, or amendment, of the contract unilaterally, for reasons related to COVID-19? If the right to a unilateral termination of a contract, or a change in its terms, is provided by law, or the contract (Article 450.1 of the Civil Code of the Russian Federation), it is not required to apply to the court. It is enough to notify the counterparty about the termination, or amendment, of the contract by sending him/her a written notice, in accordance with the procedure laid down in the contract, or the provisions of the law on sending legally relevant messages (Article 165.1 of the Civil Code of the Russian Federation). The contract will be deemed terminated, or amended, from the date the counterparty received such notice, unless otherwise provided in the notice, contract, or law. If the right to unilateral termination of the contract, or change of its conditions, is not provided (in general, or for the current situation), then you can use the following tools: (A) the creditor has the right to refuse to perform the contract, if he/she has lost interest in connection with the delay of the debtor2, including for reasons related to COVID-19. The debtor does not have such a right, unless it is expressly provided for by the contract; (B) the creditor has the right to terminate the contract in the event of a foreseeable breach of the contract by the debtor, that is, if there are circumstances that clearly indicate that such performance will not be made on time3 (for example, if the contractual delivery time for the goods in respect of which export, or import, restrictions have been introduced, although will be effective in the future, it will obviously fall within the period of validity of such restrictive measures, which will lead to a violation of the contract); (C) in addition, the contract may be terminated, or amended, due to a material change of circumstances4 if the interested party proves5 that the following conditions apply simultaneously: (i) at the conclusion of the contract, the parties believed that such changes would not occur; (ii) the reasons for the changes are insurmountable; (iii) the interested party does not bear the risk of changing circumstances and (iv) negative consequences will come for him/her in terms of such damage that the interested party did not expect when concluding the contract, if the contract is performed unchanged. In its Review No. 1, the Supreme Court of the Russian Federation confirmed that the circumstances of the spread of COVID-19 may be the basis for the requirement to amend, or terminate, the contract due to a significant change in circumstances6. However, it is important to consider that the contract may exclude the right of the parties to invoke the material change of circumstances, as a basis for amending, or terminating the contract. In all these cases, the party initiating the amendment, or termination, of the contract should send the counterparty a written notice, or proposal, to amend, or terminate, the contract. In case of rejection of the proposal to amend, or terminate, the contract (including due to a material change of circumstances), or in case of failure to receive a response to the proposal, to terminate, or amend, within 30 days7 from the date of its sending, the interested party has the right to apply to the court, with a corresponding lawsuit8. 4. Is it possible to avoid liability for non-performance, or breach of contract, in the crisis (including due to COVID-19)? As a general rule, a party that has carried out entrepreneurial activities is responsible for non-performance, or breach, of obligations, even in the absence of fault. The only exception is non-performance, or breach, of the contract caused by the occurrence of extraordinary and unforeseeable circumstances, for which neither of the parties is responsible (force majeure)9. To date, in judicial practice, an approach has been formed, according to which breach of obligations on the part of the debtor’s counterparties, lack of necessary goods on the market, lack of cash, the financial crisis10, illegal actions of third parties11, devaluation of the national currency and rate fluctuations12, bankruptcy of a debtor’s counterparty13 or revocation of a license14 are not considered to qualify as force majeure circumstances. Thus, if non-performance, or breach of the contract, is due to one of the indicated circumstances, you may need to turn to other tools, for example, refer to the objective impossibility of performance of the contract (paragraph 2), a material change of circumstances (paragraph 3), or initiate negotiations on changing the terms of the contract, for period of the crisis (including for the period of the circumstances related to COVID-19). The recognition of the circumstances related to COVID-19 as force majeure depends on the terms of the contract itself, as well as on the specific circumstances of its performance. Thus, the Supreme Court of the Russian Federation clarified that recognition of the spread of novel coronavirus infection as force majeure cannot be universal for all categories of debtors, regardless of the type of their activity, the conditions for its implementation, including the region in which the organization operates. The existence of the force majeure circumstances must be established, taking into account the circumstances of a particular case (including the deadline for performance of the obligation, the nature of the unperformed obligation, the reasonableness and good faith of the actions of the debtor, etc.)15. It is important to note the position of the Supreme Court of the Russian Federation, as provided for in Review No. 1, according to which, in some cases related to COVID-19, the lack of necessary funds can also be recognized as force majeure (despite the fact that such a circumstance is not traditionally recognized as force majeure, in judicial practice). See paragraph 5 and paragraph 6 for how to properly notify the counterparty of the force majeure circumstances and what evidence should be provided. Negotiations to amend, or terminate, the contract should be recorded, and all changes to the terms of cooperation should be recorded in the form of supplementary agreements, or annexes to the current contract. If it is impossible to determine the procedure for further performance of the contract by the current date, indicate in the supplementary agreement that the parties are not responsible for non-performance of obligations, during the crisis (in particular during COVID-19), as well as the obligation of the parties to negotiate, after a specified period of time, to determine the future of the contract and agree liability for non-performance of such obligation. 5. How to properly notify the counterparty of the force majeure circumstances? The term and force majeure notification procedure may be specified in the contract. If the procedure is agreed, it must be followed, otherwise a force majeure clause might not be effective.16 If the notification procedure has not been agreed, the written notice of the occurrence of force majeure should be given to the counterparty as soon as possible, to avoid claims for damages17. If the contract does not specify the parties’ addresses to send legally-relevant notifications, the notification should be sent to the registration address of the counterparty, specified in the Unified State Register of Legal Entities, or Unified State Register of Individual Entrepreneurs18. Notice will be deemed received from the date of delivery, unless the parties have provided for other rules in the contract19. Proof of force majeure should be attached to the notice (see paragraph 6). 6. How to prove the causal link between a force majeure event and non-performance? The parties may agree, in the contract, a list of force majeure evidence that will be conclusive, for instance, indicate a force majeure certificate issued by the Chamber of Commerce and Industry of the Russian Federation (“RF CCI”). Kindly note that RF CCI may issue certificates only for force majeure events that have occurred on the territory of Russia and arisen as part of performance of a foreign trade contract. In order to confirm force majeure events that have occurred in the territory of other states, it is necessary to apply to a competent authority of those states. You should not rely on a certificate of RF CCI, if a contract is not a foreign trade contract. In this case, as evidence, indicate that a certificate of occurrence of a force majeure event issued by chambers of commerce and industry of constituent territories of the Russian Federation20. To avoid disputes arising from new contracts, specify that the document confirming the occurrence of force majeure circumstances should be issued by the RF CCI (in case of local contracts – CCI of a constituent territory of the Russian Federation), or another competent authority. 7. How to calculate the terms of contractual performance in the context of “non-business days” introduced in Russia? The term of performance of the contractual obligation is calculated in calendar days, if calculation in business days is not directly specified by law, or the contract. If the last day of the term is a non-business day, the day of expiry of the term will be the next business day21. Since the Decrees of the President of the Russian Federation22 declared the days from March 30th to May 11th, 2020 to be “non-business”, the question arises of performance of the obligation, the deadline for which falls on the period of such “non-business days." According to the Review No. 1 and the “Review on certain issues of judicial practice related to the application of legislation and measures to counteract the spread of novel coronavirus infection (COVID-19) No. 2 in the Russian Federation”, approved by the Presidium of the Supreme Court of the Russian Federation on April 30th, 2020 (“Review No. 2"),"non-business days" are among the measures established to ensure the sanitary and epidemiological well-being of the population, aimed at preventing the spread of novel coronavirus infection (COVID-19), and cannot be regarded as “non-business days” in the meaning assigned to it by Civil Code of the Russian Federation23. In the sense of the Reviews, otherwise it would mean a suspension of performance of all civil obligations, without exception for a long period, and a significant restriction of civil circulation in general. Such interpretations do not meet the goals of the said Decrees of the President of the Russian Federation. In this regard, if there are no grounds for exemption from liability for non-performance of the obligation (Article 401 of the Civil Code of the Russian Federation), the establishment of non-business days in the period from March 30th to May 11th, 2020 is not a basis for postponing the time for performance of obligation, on the basis of the provisions of Article 193 of the Civil Code of the Russian Federation. The same rule applies to government and municipal contracts, for which from April 4th to May 11th, 2020, inclusive, terms specified by law24 and regulations and calculated in business days, are calculated in calendar days (without regard to Saturdays and Sundays). If the last day of the term is a “non-business day”, the day of expiry shall be that non-business day, and if it is a Saturday or Sunday, the next Monday.25 8. What should be included in a force majeure clause, for contracts concluded during COVID-19, and after that? The contract should establish what circumstances are qualified as force majeure, the procedure, form and term for notification of the occurrence of a force majeure event, as well as agree on a list of evidence of force majeure. If the parties are interested in maintaining the obligation for the period of the crisis, we recommend to include a clause that the occurrence of force majeure does not terminate the contract (either completely, or partially). It is reasonable to agree that, upon expiry of the period of validity of the force majeure circumstances agreed upon by the parties (for example, 2 – 3 months), each party, or one of the parties, has the right to refuse further performance of the contract in an out-of-court procedure. 9. Should COVID-19 be expressly mentioned as a force majeure event in contracts entered into, prior to the lifting of restrictive measures? Force majeure events may include only those events that are both extraordinary and inevitable. That is, those are exceptional circumstances that are not customary, under given conditions, and any party, engaged in a similar activity as a debtor in question, could not have prevented their occurrence (nor their consequences)26. Kindly note that, if certain events are named as force majeure in an agreement, it does not automatically mean that they will be qualified as such by the court, in case of disputes. Further, in case a contract is made during the COVID-19 period, the court may hold that the coronavirus is not a force majeure event, since it does not satisfy the criteria of an “extraordinary” event, which is similar to disputes arising from contracts concluded during the period of international sanctions.27 In this regard, in our opinion, it is more effective to distribute the risks of introducing new restrictive measures, due to COVID-19, through contractual institutions of compensation of property losses, waiver of rights and a contract withdrawal (see paragraph 10). 10. What clauses to include in the contract made during COVID-19? The Civil Code of the Russian Federation allows the parties to agree, in advance, on indemnity clauses (compensation of property losses), related to occurrence of circumstances specified in the contract, that are not related to the parties' breach of their obligations28, including in case novel COVID-19-related restrictive measures are introduced. In order for the indemnity clause to be valid and enforceable, it is necessary to specify the amount of the indemnified losses (fixed amount, or calculation formula) and the range of circumstances, which upon their occurrence, allow the party to claim such indemnity. Apart from indemnity clauses, we recommend including a clause on the right of the parties (or one of them) to unilaterally refuse to continue with the contract (in whole, or in part, affected by the restrictive measures) in the event of the certain circumstances (for example, in the case of the introduction of new restrictive measures, or in the absence of the necessary goods on the market, or in case the other party becomes insolvent). Among other things, in long-term contracts, you should be more careful about the conditions for the calculations of prices, in particular, include the conditions for the revision of the price upon the occurrence of the agreed circumstances. At the same time, the terms of the contract that “the price may be changed” will most likely not be enough. It is worth carefully considering monetary clauses, which should meet the interests of the parties, in the event of a devaluation of the national currency, or other financial shocks. For example, in the contract you can specify a fixed exchange rate, or to include a formula for calculating the price, when experiencing fluctuation of the exchange rates. In times of the crisis associated with the spread of COVID-19, the conclusion, amendment, or termination of the contract using electronic, or other technical, means became even more relevant (Articles 160 and 434 of the Civil Code of the Russian Federation). In order to give legal force to the contract concluded, in particular, by exchanging emails, or using platforms for generating and verifying electronic signatures (DocuSign, etc.), the parties shall conclude an agreement on electronic interaction. 1 Para. 21 of the Review of case law, approved by the Presidium of the Supreme Court of the Russian Federation of April 26th, 2017. 2 Para. 2 of Art. 405 of the Civil Code of the Russian Federation (hereinafter –"CC RF"), para. 9 of the Resolution of the Plenum of the Supreme Court of the Russian Federation of March 23rd, 2016 No. 7 “On application by the courts of certain provisions of the Civil Code of the Russian Federation on liability for breach of obligations” (hereinafter – "Resolution of the Plenum of the Supreme Court of the Russian Federation No. 7"). 3 Para. 2 of Art. 328 of the CC RF. 4 Art. 451 of the CC RF. 5 The decision of the Presidium of the Supreme Arbitrage Court of the Russian Federation of October 14th, 2008 No. 5934/08; the decision of the Supreme Court of the Russian Federation of August 8th, 2016 No. 57-KG16-7. 6 Question 8 of the Review No. 1. 7 Para. 2 of Art. 452 of the CC RF. 8 Please note that due to a fundamental change in the circumstances (see section (C)), the contract, as a general rule, is terminated by a court decision. The contract in the event of a fundamental change in the circumstances may be amended by the court decision in exceptional cases specified in paragraph 4 of Article 451 of the CC RF. 9 Para. 3 of Art. 401 of the CC RF. 10 Para. 3 of Art. 401 of the CC RF. 11 The decision of the Presidium of the Supreme Arbitrage Court of the Russian Federation of June 9, 1998 No. 6168/97. 12 The decision of the Arbitrage Court of the Moscow District of August 3rd, 2017 No. Ф05-9562/2017 in the case No. А40-129109/2016. 13 The decision of the Supreme Court of the Russian Federation of December 6th, 2005 No. 49-В05-19. 14 The decision of the Arbitrage Court of the Moscow District of March 28th, 2016 No. Ф05-2728/2016. 15 Question 7 of the Review No. 1. 16 See, for example, the Resolution of the Arbitrage Court of the North-Western District of February 7th, 2017 N F07-11803/2016 in the case No. A05-551/2016 (Ruling of the Supreme Court of the Russian Federation of April 18th, 2017 No. 307-EWS17-4115 denied the transfer of the case No. A05-551/2016 to the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation for review in cassation proceedings of this decision), Resolution of the Arbitrage Court of the Moscow District dated September 2nd, 2019 in case No. A41-90677/2018, Resolution of the Arbitrage Court of the Volga District dated June 8th, 2018 No. F06-33131/2018 in case No. A65-20171/2017. 17 Para. 10 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 7. 18 Para. 3 of Art. 54 of the CC RF, para. 63 of the Resolution of the Plenum of the Supreme Court of the Russian Federation of June 23rd, 2015 No. 25. 19 Para. 1 of Art. 165.1 of the CC RF. 20 Protocol of the Government Commission on Increasing Sustainability of the Russian Economy Development No. 3 of March 20th, 2020. 21 Art. 190 of the CC RF, Art. 193 of the CC RF. 22 The Decree of the President RF of April 2nd, 2020 No. 239 “On measures to ensure sanitary-epidemiological well-being of the population in the territory of the Russian Federation in connection with novel coronavirus infection spread (COVID-19)”. 23 The weekend and non-business days mentioned in the CC RF should be determined in accordance with Art. 111 and 112 of the Labor Code of the Russian Federation. 24 Federal Law No. 44-FZ of April 5th, 2013 “On the Contract System for the Procurement of Goods, Works and Services to Support State and Municipal Needs”. 25 The Resolution of the Government of the Russian Federation of April 3rd, 2020 No. 443 “On the peculiarities of procurement during the period of taking measures to ensure sanitary-epidemiological well-being of the population in the territory of the Russian Federation in connection with the novel coronavirus infection spread”. 26 Para. 3 of Art. 401 of the CC RF, para. 8 of the Resolution of the Plenum of the Supreme Court No. 7, the Resolution of the Presidium of Supreme Arbitrage Court of the RF of June 21st, 2012 No. 3352/12. 27 Para. 8 of Resolution of the Plenum of the Supreme Court of the Russian Federation No. 7. 28 Art. 406.1 of the CC RF. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Commercial, Dispute Resolution Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1589317200000
Webinar "Electronic document flow during and after COVID-19"
On April 29, ALRUD Law firm held a webinar "Electronic document flow during and after COVID-19". The coronavirus pandemic encourages businesses to move their usual operations to a digital environment. The digitalization trend has existed for several years but in the context of widespread quarantine and self-isolation, the issues of electronic document flow have become even more relevant. During the webinar, ALRUD experts analyzed the most relevant legal and practical issues of using electronic documents in commercial circulation. The webinar was opened by Maria Ostashenko, ALRUD Partner and Head of Commercial, Intellectual property, Data Protection and Cybersecurity practices. The speakers were Ksenia Erokhina, ALRUD Senior Associate, Sergey Artemiev, ALRUD Consultant, and Natalia Bashmakova, ALRUD Senior Attorney.
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Update on the regulation and advertising of medicines in Russia
We would like to provide you with an update on some changes in the legal regulation of medicines in Russia made due to dynamic spread of the coronavirus (COVID-19). On April 3rd, 2020, there was enacted a federal law, according to which, licensed pharmacy organizations are permitted to sell remotely (online): Over-the-counter medicines (under the respective procedure to be set by the Russian Government) and Prescribed medicines (only within the emergency, as a temporary measure to be introduced by the Russian Government (if required) until December 31st, 2020). This new regulation provides for new business opportunities for pharmacy organizations and medicine manufacturers. At the same time, the Russian Federal Antimonopoly Service (FAS) scrutinizes the advertising of medicines where it is used a reference to therapeutic efficacy against COVID-19. In particular, in January 2020, an advertisement of the medicine Arbidol, which was released on the radio, stated that the medicine has therapeutic efficacy against 2019-nCoV (COVID-19). In March 2020, FAS found this advertisement illegal, since the medicine’s package leaflet did not contain the information on such therapeutic efficacy. Therefore, FAS issued an order to the advertiser to stop the violation. Besides, in February 2020, the similar advertisement of the medicine Remantadin at pharmacies was qualified by the regional subdivision of FAS as containing signs of violation due to the same reason. The advertiser removed the advertisement promptly and voluntarily. Under the Russian law, an advertisement of a medicine is allowed only within the limits of the information contained in a duly approved package leaflet of the medicine. Otherwise, such an advertisement will be deemed illegal and will lead to an administrative fine up to RUB 500,000 (approx. USD 6,556) for legal entities. Summarizing the above, we would like to emphasize the following: Although the permission for pharmacy organization to sell medicines remotely (online) is an obvious and expected step towards liberalization, it cannot be actually applied until the respective regulations are adopted by the Government. We recommend monitoring closely the regulations in this area. Taking into account the scrutiny of FAS, pharmaceutical companies should be more careful while advertising medicines, particularly, as a treatment of COVID-19. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practice: Intellectual Property Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
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ALRUD experts talk about the new digital-labeling system called “Chestny Znak”
On April 21, ALRUD Law Firm held a webinar 'Digital labeling 'Chestny Znak' in Russia: Practice Aspects and Liabilities', dedicated to the Russian new system of digital labeling called 'Chestny Znak'. The Russian Government continues to implement new Russian digital labelling system 'Chestny Znak' and to expand the scope of goods subject to new labelling rules. Currently, the products to be labelled include not only tobacco products, pharmaceuticals, but also perfumes, photo cameras, apparel, footwear and some others. During the webinar, the speakers gave a brief overview of 'Chestny Znak' labelling system: the principles of the system, the stages of its implementation. Also the speakers paid attention to the legal effect of implementing new labelling rules, and also discussed the liability for labelling violations: civil, administrative, and criminal types of liability for non-compliance with new requirements. The webinar was opened by Maria Ostashenko, ALRUD Partner and Head of Commercial, Intellectual property, Data Protection and Cybersecurity practices. The speakers were Dina Kravchenko, ALRUD Consultant, and Vladislav Dorozhkin, ALRUD Attorney.
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The impact of the coronavirus (COVID-19) on performance of contractual obligations
The coronavirus (COVID-2019)1, which today affects more than 150 countries and territories around the world, has already had, and continues to have, a significant impact on the global economy. In such circumstances, Russian business inevitably faces, on the one hand, the need to comply with the epidemiological requirements and restrictions imposed by the Russian and foreign public authorities, and, on the other hand, with the problems of performance of its current obligations, including foreign trade contracts. In this information letter, we have aimed to touch upon the most relevant issues of the legal consequences of the coronavirus, for current and future Russian law contracts. 1. Excused from performance of the obligations, or from liability for the breach of the obligations, in connection with the coronavirus 1.1 Force majeure In accordance with paragraph 3 of article 401 of the Civil Code of the Russian Federation, force majeure is an extraordinary, and objectively unavoidable, circumstance under the current conditions, the occurrence of which excludes liability for the breach, or non-performance, of the obligations. To exclude liability of the debtor for non-performance of the obligations, it is necessary to prove that the inability to perform the respective obligations was caused by force majeure, that is, in this case, the coronavirus and/or restrictive measures taken in connection with its spread. Judicial practice considers epidemics and pandemics as force majeure2. The current legislation3 understands the term 'epidemic' as infectious diseases that pose a threat to others, that is, human infectious diseases characterized by severe acute disease, a high mortality rate and disability, together with the rapid spread of the disease among the population. The Government of the Russian Federation approved the list of such diseases4. The coronavirus (2019-nCoV) is included in this list5. It should be noted that, in connection with the spread of the coronavirus, individual regions of the Russian Federation introduced a high-alert regime and established a number of restrictions on entrepreneurial activity. On March 5th 2020, the Mayor of Moscow issued a Decree No. 12-UM “On the introduction of a high-alert regime” (hereinafter “Decree No. 12-UM”), which established special measures to prevent the spread of the coronavirus in Moscow. Decree No. 12-UM includes mandatory self-isolation at home for arrivals from the certain countries and a number of other restrictions. On March 14th 2020, Decree No. 12-UM was amended and the spread of the coronavirus (2019-nCoV) was recognized as an extraordinary and unavoidable circumstance, which led to the introduction of the high-alert regime, which, in turn, is a force majeure6. A similar provision is contained in Resolution of the Governor of the Moscow Region of March 12, 2020 No. 108-PG, which introduced the high-alert regime on the territory of the Moscow Region (amended by the Resolution of March 13, 2020 No. 115-PG). These normative acts do not qualify the spread of coronavirus itself as a force majeure, but the high-alert regime introduced by public authorities of the regions of the Russian Federation to prevent such spread. As of March 19th 2020, the high-alert regime was introduced throughout the Russian Federation7. At the federal level, neither this regime, nor the coronavirus, was recognized as a force majeure. Moreover, according to current case law, unlike a state of emergency, such regime determines only the activities of public authorities and is not sufficient in itself to be qualified as a force majeure8. At the same time, in an attempt to help businesses out of the crisis, federal authorities and non-governmental associations are adopting acts and explanations that allow parties to qualify the coronavirus as a force majeure, in certain circumstances. In particular, at the moment, the Ministry of Finance of the Russian Federation and the Federal Antimonopoly Service of the Russian Federation have issued clarifications on the recognition of the coronavirus as a force majeure in public procurement9 (the corresponding act is also being prepared at the level of the Government of the Russian Federation10), and the Chamber of Commerce and Industry of the Russian Federation is already issuing certificates of force majeure due to the coronavirus, in cases of disruption of export contracts. In addition, the Ministry of Finance of the Russian Federation requests not to prosecute residents who cannot ensure the timely repatriation of foreign exchange earnings, due to force majeure circumstances, including due to the measures taken by foreign governments to prevent the spread of the coronavirus11, and the Ministry of Economic Development of the Russian Federation has prepared a bill, according to which, the government will have the right to introduce a moratorium on initiating bankruptcy cases of organizations in an emergency of natural, or man-made, disasters, as well as significant changes in the rate of the ruble12. Nevertheless, the quarantine measures have not been fully introduced by the Russian public authorities, so, the question of inability to perform obligations in connection with the epidemic, or current, restrictions will be decided by the court, on a case-by-case basis. 1.2 Objective inability to perform obligations Force majeure excludes liability for breach of an obligation, but does not terminate it. Unlike force majeure, if there is an objective inability to perform an obligation, it terminates automatically (paragraph 1 of article 416 and article 417 of the Civil Code of the Russian Federation). Inability to perform obligations should be caused by the circumstance that occurred after the obligation had arisen, for which neither of the parties is responsible13 (for example, an act of a public authority, or local government, that establishes epidemiological restrictions). Inability to perform obligations must be factual, objective and final (permanent)14. Accordingly, acts of public authorities and local government adopted to prevent the spread of the coronavirus, and obstructing the performance of the contracts, can be qualified by the courts as a basis for terminating the relevant obligations. 1.3 Material change of circumstances If, due to the spread of the coronavirus, the circumstances have changed so much that, if the parties could reasonably foresee it, they would not have concluded the contract at all, or would have concluded it on significantly different conditions, the court, at the request of the party to the contract, has the right to terminate, or amend, the terms of the contract, due to material change of circumstances (article 451 of the Civil Code of the Russian Federation). To satisfy the claim for amendment, or termination, of the contract, the party must prove the existence of the conditions listed in paragraph 2 of Article 451 of the Civil Code of the Russian Federation, in particular, the insuperability of the changes and an imbalance between the property interests, in the case of the further performance of the contract, in its original form. Regarding the qualification of the epidemic as a material change in circumstances, judicial practice cannot rely on numerous cases15, but this should not be become an obstacle to the application of this concept to the current situation. 2. Contractual instruments to reduce the risk of non-performance of obligations The rapid spread of the coronavirus, and the significant amount of measures taken at the state level around the world, objectively compels market players to pay more attention to the content of contracts, to ensure the proper performance of obligations and the potential risk allocation associated with its non-performance. We can recommend considering use of the following contractual instruments, which help the parties to ensure legal certainty in case of unforeseen situations, during the performance of the contract. 2.1 Force majeure clause and a concept of material change of circumstances It should be borne in mind that paragraph 3 of article 401 and article 451 of the Civil Code of the Russian Federation are dispositive law. This means that the parties have the right both to exclude the application of these articles to the concluded contract, and to regulate them additionally by their contract (for example, to provide deadlines for notification of the occurrence of force majeure events, or to agree on the procedure for the provision of evidence of the occurrence of a force majeure). However, it is important to understand that the absence of a clause on force majeure, or a material change of circumstances in the current contract, does not indicate the impossibility of their use in the current circumstances. 2.2 Indemnity (article 406.1 of the Civil Code of the Russian Federation) The spread of the coronavirus leads to restrictions on air and rail traffic, trade restrictions and prohibitions, which involve significant extra costs and losses for one, or for each, side. Such losses may be, for example, losses caused by the inability to perform obligations, the submission of claims by third parties, or public authorities, etc. The parties are entitled to provide for a procedure for compensating such extra costs through the mechanism of indemnity16. Unlike the compensation of losses under the rules of articles 15 and 393 of the Civil Code of the Russian Federation, indemnity under the rules of article 406.1 of the Civil Code of the Russian Federation applies if there is no breach of the obligations by the relevant party, and regardless of the causal relationship between the behavior of that party and the losses subject to compensation17. Both the indication in the contract of any specific amount of indemnity and the procedure for its calculation are acceptable. 2.3 Unilateral termination of contract In addition to indemnity, the parties are entitled to provide for the right to unilaterally terminate the obligation, which is also one of the ways to minimize the risks associated with the consequences of the coronavirus. In most cases, termination fees may apply. 2.4 Unilateral modification of contract If parties do not want to include the right to a unilateral refusal to continue with the contract, or the other party does not agree to enter into the contract on similar conditions, it is possible to provide for the right to unilaterally change specific terms of the contract (for example, event or delivery date change). Thus, there is currently a high level of uncertainty regarding operations under the existing contracts, performance of which may be questionable, or impossible. Companies need to closely monitor the development of the situation around the coronavirus, the laws adopted in connection with it and quickly respond to changing circumstances, including by amending the existing contracts that the parties intended to perform in other circumstances, or terminating them timely. It should be kept in mind that the actions of the parties, in any case, must comply with the principles of reasonableness and good faith. 1 On March 11, 2020, the World Health Organization announced that the spread of the new coronavirus (COVID-19) had reached the stage of a pandemic. 2 The decision of the Supreme Arbitration Court of the Russian Federation of May 03, 2012 No. VAS-3352/12 in the case No. A40-25926 / 2011-13-230; The decision of the Arbitration Court of the Ural District of February 6, 2019 No. Ф09-8477 / 18 in the case No. А76-30210 / 2016; The decision of the Arbitration Court of the Far Eastern District of August 27, 2019 No. Ф03-3458 / 2019 in the case No. А04-9007 / 2018; The decision of the Arbitration Court of the Moscow District of April 01, 2016 No. F05-1154 / 2016 in the case No. A40-97911 / 15-121-785. 3 Paragraph 17 of article 1 of the Federal Law of March 30, 1999 No. 52-FZ “On the medical and epidemiological welfare of the population”. 4 Decree of the Government of the Russian Federation of December 1, 2004 No. 715 “On approval of the list of socially significant diseases and the list of diseases that pose a threat to others”. 5 Decree of the Government of the Russian Federation dated January 31, 2020 No. 66 “On Amending the List of Diseases that pose a threat to others”. 6 Paragraph 1.6 of the Decree of the Mayor of Moscow of March 14, 2020 No. 20-UM “On Amendments to the Decree of the Mayor of Moscow dated March 5, 2020 No. 12-UM”. 7 A source: https://tass.ru/obschestvo/8027563 8 The decision of the Sixth Arbitration Court of Appeal of January 29, 2020 in the case No. A04-3320 / 2019. 9 The letter of the Ministry of Finance of the Russian Federation of March 03, 2020 No. 24-06-06 / 21324 “On the procurement of a sole supplier (contractor, executor) upon introducing a high alert”. https://fas.gov.ru/news/29575 10 A source: http://kommersant.ru/doc/428.3265 11 A source: here 12 A source: https://regulation.gov.ru/projects#npa=100548 13 Article 416 of the Civil Code of the Russian Federation (part one) of November 30, 1994 No. 51-FZ (hereinafter - the 'Civil Code of the Russian Federation'). 14 The decision of the Judicial College on Economic Disputes of the Supreme Court of the Russian Federation of January 30, 2017 in the case No. 305-ES16-14210, A40-85057 / 2015. 15 The decision of the Arbitration Court of the Central District of August 14, 2015 No. F10-2685 / 2015 in the case of No. A35-8264 / 2014. 16 Article 406.1 of the Civil Code of the Russian Federation. 17 Paragraph 15 of Resolution of the Plenum of the Supreme Court of the Russian Federation of March 24, 2016 No. 7 “On the application by courts of certain provisions of the Civil Code of the Russian Federation on liability for the breach of the obligations”. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Commercial, Dispute Resolution Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1585083600000
New system for registration of EAEU trademarks and appellations of origin
We would like to inform you that on February 3, 2020, the Agreement on trademarks, service marks and appellations of origin of the Eurasian Economic Union (“Agreement”) was signed in Moscow. The Agreement was signed by all Eurasian Economic Union (“EAEU”) member states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia. The Agreement introduces a new system for the registration of EAEU trademarks (“Trademark of the Union”) and EAEU appellations of origin (“AO of the Union”). Instead of registering a Trademark and AO separately in each EAEU member state, the Agreement provides an opportunity to register means of individualization in any of the EAEU member states and receive a unified protection certificate. The entry into force of the Agreement is made dependent on all the EAEU member states bringing the established registration procedures and fees in accordance with the Agreement. The new registration system is expected to be operational by the end of 2020. Key provisions Trademark registration procedure To register the Trademark of the Union, it is required to submit one application to any of the EAEU member states’ intellectual property office. At the same time, the applicant does not select the list of EAEU member states in which legal protection is sought, since the application for the Trademark of the Union is considered by all national intellectual property offices at the same time. It is possible to convert a national trademark application into an application for the Trademark of the Union, and vice versa, if the requirements for convention priority are met. At the request of the right holder, it is possible to replace the trademark registration in each EAEU member state with the Trademark of the Union. The registration period for Trademark of the Union will be from 8 months and can be extended, depending on the intellectual property offices’ need to request additional documents and information. Requirements for the designation to be registered Only designations that can be represented in graphical form can be registered as a Trademark of the Union. The designation must meet the eligibility criteria in each of the EAEU member states. If the designation cannot be registered as a trademark in one of the member states, the designation is not subject to registration as Trademark of the Union. Disposal of the exclusive rights to the Trademark of the Union The right holder of the Trademark of the Union has the right to dispose of exclusive rights in accordance with the laws of the member states, which includes alienation, licensing rights to use, conclusion of franchising agreement or pledge of the exclusive rights to the Trademark of the Union. Such disposal of rights is subject to mandatory registration with the filing intellectual property office. Challenging registration and early termination of the Trademark of the Union Any interested parties have the right to submit a request about the existence of grounds for refusing registration within 3 months from the date of publication of the application. It is possible to challenge the legal protection of an already registered Trademark of the Union by submitting an objection to the national intellectual property office of any member state of the EAEU. Early termination of the Trademark of the Union is possible if the right holder does not use it for 3 years in all member states of the EAEU. Registration of the Trademark of the Union Prior to the entry into force of the Agreement, the EAEU member states will exchange lists of AOs registered in each EAEU member state. Applicants from EAEU member states apply to the national intellectual property office for registration of AO, while applicants from non-EAEU member states are entitled to apply to any office. Amount of fees The amount of fees will be fixed for all EAEU member states and established by the decision of the Council of the Eurasian Economic Commission (EEC). Term of the rights to Trademark and AO of the Union The term of the rights to the Trademark of the Union is 10 years from the date of filing an application with the right of extension for an unlimited number of times. The term of the rights to the AO of the Union is also 10 years from the date of filing an application with the possibility of extension, if the conditions for the protection of the AO are preserved. Findings and recommendations Registration of the Trademark and AO of the Union may be a priority for companies doing their business in all or the most of the EAEU member countries, as well as for interested right holders who are faced with the problem of counterfeit and parallel import. The registration system of trademark and AO in the EAEU corresponds to the provisions on the unified customs register of intellectual property in the EAEU and will simplify the procedure for including company trademarks in the EAEU unified customs register. Registration of the Trademark and the AO of the Union will protect the rights to intellectual property in the EAEU, both in national law enforcement bodies and in the Eurasian Economic Commission (e.g., if there are signs of unfair competition). We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Intellectual Property Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1584046800000
Maria Ostashenko is the author of Data Protection and Cyber Security
The In-House Lawyer and The Legal500 publishers have published the Data Protection and Cyber Security Guide, which focuses on various data protection and cybersecurity issues in 23 jurisdictions. The authors of the guide are experts of leading law firms from around the world, which are included in The Legal500 ranking. The Russian part was prepared by ALRUD Partner Maria Ostashenko, who was recommended by The Legal500 EMEA rating in the field of intellectual property, telecommunications, media and technology, and dispute resolution. In-House Lawyer is a law magazine and online portal that provides reliable information, in all areas of law, for inhouse lawyers of companies. The Legal500 guides, which have been published over 33 years, provide the most extensive and accurate information about law firms, from more than 150 countries. You can read the full text of the publication here.
1579813200000
New sanctions for failure to localize personal data in Russia
We would like to inform you that on the December 2nd, 2019, the President has signed the draft law introducing amendments to the Code of Administrative Offences of the Russian Federation (“Law”). In particular, the Law sets out new administrative fines for non-compliance with so-called localization requirement. The amount of related fines may be up to RUB 18,000,000 (approx. EUR 255,000, USD 282,000). This is extremely high, in comparison with other penalties, under Russian data protection laws. Under the Law, it shall enter into force upon its official publication, which also took place on December 2nd, 2019. Background On September 1st, 2015 the so-called data localization requirement entered into force. It implies that certain operations on Russian citizens’ personal data shall be performed in databases located in Russia. Companies operating in Russia made great efforts to fulfil this new requirement. At the same time, blockage of a website, or app, remained the only straightforward enforcement action against those who did not comply with the localization requirement. The best known example is LinkedIn, which is still not available for users in Russia. Roskomnadzor (Russian data protection authority) found some workarounds allowing to bypass this regulatory gap and impose certain fines de facto for data localization reasons. In particular, it requested information on the location of the database, or prescribed rectification of revealed violation of the localization requirement (e.g., Facebook and Twitter cases). Failure to fulfil such orders is a ground for imposing administrative fines on the respective data controllers. However, their amount was too low for ensuring effective enforcement. Roskomnadzor was not satisfied with such state of affairs and insisted on introducing new enforcement mechanisms. New fines According to the Law, the fine imposed on the companies may be up to RUB 6,000,000 (approx. EUR 85,000, USD 94,200) for the first localization offence and up to RUB 18,000,000 (approx. EUR 255,000, USD 282,000) for the subsequent offence. Such high fines can significantly affect the privacy landscape in Russia. If, previously, risks for the companies processing personal data of Russian citizens, in cases of non-compliance with the localization requirement were rather remote, now they may become the most important issue in terms of data protection. Localizing data according to Russian laws still remains a great challenge requiring high costs (especially for data-driven companies), but now it may become a “must-have” measure for those companies which are planning to develop their business in the Russian market. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Data Protection and Cybersecurity Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1576011600000
Adoption of the Law on pre-installation of Russian applications
On December 02, 2019, a Federal Law amending the Law on Protection of Consumer Rights and introducing the concept of pre-installation of Russian applications into the existing legislation was adopted. Adoption of this law is initiated by the need to adapt the current legislation to ensure protection of citizens’ interests in time of modern technologies’ development influencing the market conditions in general. The law comes into force on July 01, 2020. The initial concept of pre-installation of Russian applications was developed by the Federal Antimonopoly Service (FAS) after a number of high-profile cases on antitrust violation of such IT giants as Google and Microsoft, during which the possibility of exercising uncompetitive advantages by international developers of programs via pre-installation of their own applications and, consequently, setting barriers for the Russian developers, had been revealed. This concept was based on the Roadmap for the development of competition in the economic sectors of the Russian Federation and the transition of certain areas of natural monopolies from a state of a natural monopoly to a competitive market for 2018-2020. According to this, conditions for the development of competition in the market for applications for user equipment shall be created. Contents of the law According to the law, when selling certain types of technically-complex products with pre-installed programs for electronic devices (in particular, smartphones, computers, TVs with the Smart TV function), the producer shall be obliged to pre-install a number of Russian programs to such devices. According to the explanatory note, the law is aimed at pre-installing additional applications and programs focused on the Russian users, as well as at protecting interests of Russian internet companies, in order to reduce possible abuses of powers by large foreign companies active in the information technologies market. List of devices, for the sale of which it would be necessary to comply with these requirements, as well as the list of applications to be installed, shall be approved by the Russian Government. For implementation of such requirements, the State Duma currently considers a bill on amendments to the Code of the Russian Federation on Administrative Offenses. According to the bill, sale of certain types of technically-complex products with pre-installed programs for electronic computing devices in breach of these requirements on pre-installation of Russian applications will entail an administrative fine: from RUB 30 000 to 50 000 for the company’s officials and from RUB 50 000 to 200 000 for the legal entities. Main categories of pre-installed applications The law does not currently contain direct reference to any categories of products, with regard to which the law might be applied. At the same time, according to the initial concept of pre-installation of Russian applications, proposed by the FAS in an alternative bill, the following categories of programs were supposed to be pre-installed: Antivirus software; Search engines; Navigation systems; Mail services and social medias. Furthermore, there are also independent expert opinions distinguishing the following categories of applications, with regard to which Russian developers may compete with foreign applications and, thus, which may be potentially considered for pre-installation: Mobile applications: search engines, mail, cloud services, navigation systems, social networks, document editors, antivirus applications, music services and Digital TV; PC applications: search engines, cloud services, navigation systems, music services, document editors and Digital TV. Our recommendations The considered law will significantly change the conditions of functioning of the markets, create additional advantages for Russian developers carrying out their business activities in Russia. Whereas, producers of technically-complex products shall regularly monitor the approved list of devices and applications, with regard to which pre-installation requirements are applied. Moreover, additional analysis and assurance of the technological capability of the alternative Russian software pre-installation might be required. At the same time, at the moment it is not completely clear how compliance with the requirements for pre-installation of applications shall be monitored. It seems that there is a risk of holding manufacturers of technically-complex products liable for violations of the requirements for pre-installation of applications when selling products that had been put on sale prior to coming into effect of the considered law or prior to inclusion of the corresponding device or software in the list approved by the Russian Government. It is expected that some transitional period should be introduced, during which the activities of developers should be brought into compliance with the new legal requirements in Russia. Furthermore, the Russian Government shall clarify also the list of devices and to-be-preinstalled applications. Even though the law has not come into force yet, its provisions should be considered already now in order to effectively adapt business activities to the new legislative requirements in the future at a short notice. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Industry: Telecommunications, media and technology Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1575406800000
On important provisions of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated April 23, 2019 No. 10
On April 23, 2019 the Plenum of the Supreme Court of the Russian Federation adopted the Resolution No. 10 “On Application of the Fourth Part of the Civil Code of the Russian Federa-tion” that summarizes the judicial practice in the area of intellectual property of the recent years. Follow the link to find our brief comments with respect to the most important provisions of the Resolution.
1567458000000
Main approaches of enforcement practice in the area of data protection and positions of Roskomnadzor: practical guidance
In recent years, the Federal Service for Supervision of Communications, Information Technology, and Mass Media («Roskomnadzor») and Russian courts have developed many positions and approaches that data controllers should take into account in their activities. Below, you can find some practical recommendations based on these positions and approaches, as well as on the practical experience of our lawyers. This review does not constitute legal advice. However, we believe that it can serve as a practical guidance for companies willing to ensure compliance with Russian personal data laws and to consider the practical aspects of their enforcement. Click here to download the file. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Data Protection and Cybersecurity Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1558299600000
Introduction of digital rights and amendments to the requirements to the form of transactions
This is to inform you that, on March 18 2019, the Federal Law of the Russian Federation on “Introduction of amendments to the first, second part and Article 1124 of the third part of the Civil Code of the Russian Federation” (the “Law”) was adopted. The Law edits the list of objects of civil rights and introduces a new concept “Digital rights”, andalsoamends the requirements to the form of transactions to the Civil Code of the Russian Federation (“СС RF”). The Law comes into force on October 01, 2019. Asthe Law provides for amendments relevant to conducting business using information technology, including the Internet, we would like to inform you on key provisions of the Law. 1. Digitalrights Pursuant to the Law, the Digital rights are property rights. As such, the content and conditions for their exercise are determined by the rules of information system, where such rights exist. The authors of the Law comment that, in the first instance, the Law is aimed at regulating crypto-currency, anti-money laundering and terrorist financing. It also introducesthe possibility of including the Digital rights to estate, or bankruptcy estates. Execution and disposal of the Digital rights areonly possible within the information system and through making relevant entries into the information system. A person who can dispose of such right, by the rules of the information system, is deemed to have the respective Digital right. At the same time, the transfer of a Digital right, under a transaction, does not require consent of theperson bound by such Digital right. The Law does not provide for any specific characteristics, or classification, of the Digital rights and does not define,norstate, the features of types of information systems. The relevant rules will be specified in other regulations, including the law on “Digital financial assets”, the enactment of which is expected soon. 2. Formoftransactions The Law supplements Article 160 of the CC RF with a provision on compliance with the written form of transaction, when such a transaction is made using such electronicor technical means that allow unchangeablereproduction ofthe transaction content on physical media. The Law also simplifies the rule for signing such transactions and states that the signature requirement is fulfilled if the signing method allows reliable identification of the person agreeing to the transaction. However, either the law, or anagreement between the parties, may provide for a different (e.g., more complicated) procedure foridentification of the person. These amendments reflect the existing practical aspects of contracting in electronic form through determining parties, e.g., by using SMS or biometric identification, without threatening their validity and avoid the need to enter into a separate agreement on signing of such transactions. 3. Smartcontracts In addition to that, the Law establishes the possibility of executing a transaction, using information technology upon the occurrence of the circumstances specified in such transaction, without making a performance request to the counterparty. This provision of the Law allows the parties, for example, to agree on the automatic execution of transactions, including so-called “smart contracts”. Therefore, in general, the Law expands the legal regulation of the use of information technologies by in-troducing the concept of “Digital rights” and the rules for performing “smart contracts”, as well as simplifies signing of transactions in electronic form. ALRUD specialists are ready to provide any necessary legal assistance in all matters related to use of these mechanisms and new provisions of CC RF. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Commercial, Financial technology Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1554757200000
New rules of audits/inspections of companies processing personal data by the Russian Data Protection Authority
We would like to inform you of the new rules of audits/inspections of companies processing personal data approved by the Decree of the Russian Government dated February 13, 2019 No. 146 «On Approving the Rules on Arranging and Exercising Control over Compliance of Personal Data Processing» («Decree»). The Russian Data Protection Authority (DPA) is entitled to investigate companies’ compliance with data protection laws. For this purpose, it conducts audits/inspections (scheduled/unscheduled) in accordance with the rules specified in the legislation. The Decree sets out a new set of rules whichcompletely replacethe previous ones. The key changes introduced by the document are as follows: Certain categories of companies can be inspected more frequently. For example, companies processing sensitive and biometric data; companies acting in the capacity of data processors which are processing data on behalf of data controllers which haveno presence in Russia; companies transferring data to countries considered «inadequate» under Russian law, in terms of data protection (e.g., USA). There is an additional ground for unscheduled inspection. This ground is a decision of the DPA based on monitoring of the company on the Internet (e.g., if data is collected and otherwise processed through websites/app).or analysis of any available information (e.g., information contained in data subjects' complaints; any information in a public domain). Companies will have maximum 6 months to rectify violations revealed in the course of inspection. After inspection, the DPA requests the company to rectify revealed violations. Previous legislation did not set out statutory deadlines for companies to comply with such requests. Under the Decree, the deadline cannot exceed 6 months. The DPA can suspend data processing activities for a period, until the company rectifies violation. This is not a new enforcement power of the DPA. However, unlike previous regulations, the Decree clearly specifies a case/ground where the DPA will request suspension of processing activities - if company does not rectify violation upon request of the DPA, and this violation is sensitive in terms of data subjects' rights and legitimate interests. Apart from inspections, the DPA supervises compliance by way of monitoring companies on the Internet, or analyzing any available information about their processing activities (e.g., information received from data subjects, any other parties, or available in a public domain). Upon such monitoring, the DPA is entitled to request the company to rectify notifiedviolations. If the company does not comply, it will face administrative fines. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Data Protection and Cybersecurity Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1551646800000
The Supreme Court of the Russian Federation clarified application of general provisions of the Russian Civil Code on contract
At the end of the last year, the Plenum of the Supreme Court of the Russian Federation (the “Supreme Court”) adopted the Ruling dated December 25, 2018 No. 49 “On some issues on application of general provisions of the Civil Code of the Russian Federation (the “Civil Code”) on entering into and interpreting the contract” (the “Ruling”) clarifying the general provisions of the Civil Code in relation to entering into a contract, its content, and interpretation. This Ruling highlights essential practical issues on entering into a contract when making offer and acceptance, concluding a contract in legal proceedings as well as clarifies application of rules onpublic offer and preliminary contracts and representations. The Ruling maintains an approach to saving legal force ofa contract when interpreting it. These rules have a prac-tical use and will be useful for entrepreneurs in conclusion and performance of various contracts. In this regard, we would like to inform you of the key points of the Ruling. 1. Enteringinto a contract The Supreme Court has confirmed the absence of necessity to perform all conditions of the offer before performance of the contract to recognize such actions as acceptance. Thus, the offer shall be treated as accepted in case of availability of the offer and commencement of performance of its conditions within the period specified in the offer. 2. Publicoffercontract The Supreme Court clarified that loan agreements and voluntary property insurance contracts are not included in the scope of public offer contracts regulation. Moreover, it has been noted that the contractor of a public offer contract is entitled to categorize consumers for establishing different prices, in particular, based on objective personal characteristics. However, this categorization shall be introduced to consumers (for example, via a website). The Ruling also covers the possibility of termination of a public offer contract unilaterally. A party is entitled to terminate or refuse to perform a public offer contract if the consumer violated its terms and there is a legal provision allowing such termination. Similar regulation is related to public offer agreements between entrepreneurs. 3. Preliminarycontracts The Supreme Court has divided preliminary contracts and sales agreements with a pre-payment clause. Thus, if a contract includes a clause on payment of the whole price or its significant part before entering into a principal contract, it shall be qualified as a sales agree-ment with a prepayment clause. If there is no such clause, the contract shall be treated as preliminary contract. Besides, a preliminary contract should not be registered even if the principal agreement requires such state registration. 4. Representations The Supreme Court has determined that if representations have a direct link with a subject matter of the agreement, such representations shall be governed by the rules on representations and the respective type of contract. However, if representations do not have such link (for example, representations on the status of a party), they should be regulated by the rules on representations and liabilities for breach of obligations. Moreover, the Ruling clarifies that a third party is entitled to provide representations if such person has an interest in the conclusion of a contract. The third party’s interest is presumed. A witness cannot prove existence or contents of representations. 5. Entering into a contract in legal pro-ceedings Solving the gap in legislation, the Supreme Court explained that if a court rules to force the parties to enter into a contract, it shall state the terms and conditions of such contract in the ruling. The contract shall be entered into from the effective date of the court ruling without any additional actions (signing a con-tract, exchange of documents, etc.). Besides, the Supreme Court determined the revision limits of terms and conditions of a disputed contract by court. Thus, a court is entitled to amend and add terms of a contract, in particular, if there are case special circums-tances. 6. Interpretationofcontract The Supreme Court eliminated an ambiguity regarding preferred interpretation of contracts. In particular, a priority of interpretation in favor of saving a contract has been fixed (if it possible to save the contract). The Supreme Court has also outlined the need to interpret a contract in favor of a party who drafted provisions of the contract. Therefore, the Supreme Court presumes that such party is a person engaged in business activities that require specialized knowledge (for example, a bank in a loan agreement). We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Commercial Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1550782800000
Guidelines on the territorial scope of the GDPR
We would like to inform you that recently the European Data Protection Board (Independent EU body in charge of clarifying data protection laws and ensuring their consistent interpretation.) has released its guidelines clarifying the territorial scope of the General Data Protection Regulation. Click here to download the file. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Data Protection and Cybersecurity Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1549486800000
Guidelines on advertising of over-the-counter (OTC) medicines
During 2017-2018, the Federal Antimonopoly Service of Russia (“FAS”) paid close attention to advertisements of OTC medicines and considered large number cases of violations of advertising legislation by pharmaceutical companies. At the end of 2018, FAS in collaboration with the Association of International Pharmaceutical Manufacturers and other market players, established a guideline on recommended advertising of OTC medicines (“Guideline”). This Guideline is based on the analysis of the FAS’s practice and court practice in recent years. The Guideline contains important approaches to controversial issues arising in the advertising of OTC medicines in Russia. The Guideline will be followed by FAS when considering advertising cases and can help pharmaceutical companies in the production of advertisement of medicines. For your convenience, we have prepared a short summary of the most important recommendations that shall be taken into account. 1. Inaccurate advertising Advertising shall be deemed as inaccurate where information on the therapeutic effect and therapeutic properties does not correlate within: Approved summary of product characteristics and package leaflet; Standards of medical care approved by the Ministry of Health; Other documents approved by the Ministry of Health. According to the Guideline, generic words, for instance, “cold, cough, chill, fever, etc.”, can be used in advertisements, provided that their medical terms and synonyms are included in the package leaflet. 2. Guaranteed treatment Russian law prohibits any guarantee of the efficacy of a medicine. Pharmaceutical companies may use, in advertising, therapeutic properties of a medicine and its effect upon a patient's organism. FAS recommends the use of words and expressions that indicate the process and impact of a medicine and not the guaranteed result. Moreover, used therapeutic properties should correspond to the package leaflet. The following phrases are acceptable. Verbs / verbs, indicating the process of treatment (treats, promotes treatment, affects symptoms, helps to relieve symptoms, etc.); Nouns / phrases that do not indicate the inevitable onset of the result (illness, symptoms (including specific types of symptoms), helps (contributes) to treatment, facilitates rehabilitation); Phrases indicating time of absorption (within two minutes, a medicine begins to be absorbed); Indications for use and therapeutic properties (for pain relief, aimed at treatment, has an antispasmodic effect). 3. Words “fast”, “rapidly”, “instantly”, etc. The use of such words as “fast”, “rapidly” and “instantly” characterizing the time of the therapeutic effect and therapeutic properties is unacceptable. With regard to other medicine’s characteristics, the use of these words is permissible, for example: “it dissolves quickly”, “stored for a long time”. 4. Persuading healthy consumers to use a medicine Russian law prohibits persuading healthy consumers to use a medicine. If a medicine is used for prevention of disease, it should be directly indicated in the advertisement. It is unacceptable to use phrases “everyone should take this medicine”, “many people have these symptoms”. 5. Assumptions that a consumer has a disease Russian law restricts stating, or suggesting in an advertisement, that a consumer has a disease, or symptoms of diseases. For example, it is not recommended to use the following: Do you have cough? Sneeze? Headache? It seems you are getting sick ... What's this? Are you ill? You have flu. It is allowed to mention the symptoms that are specified in the product leaflet, for example, “when you have a cough”,“in case of a cold”. Advertisements can also refer to indications and usage in package leaflet, or information, on consumers’ intention to relieve a symptom: “for treatment of a cough”. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Healthcare and Pharmaceutical Industry Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1547413200000
Temporary legal protection of industrial designs during examination of applications
We would like to inform you that on December 27, 2018, the President of the Russian Federation signed the Federal Law No. 549-FZ “On Making Amendments to the Part Four of the Civil Code of the Russian Federation” (previously known as the Bill No. 428309-7) that provides for temporary legal protection to industrial designs during the stage of substantive examination of applications (URL: http://sozd.duma.gov.ru/bill/428309-7) («Law»). The Law was officially published on December 28, 2018, and will enter into force upon expiry of 180 days from that date (URL: http://publication.pravo.gov.ru/Document/View/0001201812280020). What does «temporary legal protection within an examination of an application» mean? Currently (until the Law is entered into force) such protection is provided only to an invention as a subject matter of patent rights (Article 1392 of the Civil Code of the Russian Federation). It means that within the period starting from the date of publication of an application (Publication of information regarding an application after a formal examination with a successful result) until the date of a patent issuance (Publication of information regarding a patent issuance after a substantive examination with a successful result), i.e., during the substantive examination of the application by the Russian Patent Office, the invention is protected by law (within the scope of a published formula of the invention). What legal remedies are available? If a person uses the claimed invention during that period, such person will have to pay a monetary compensation to the applicant provided that the applicant has received a patent to the invention. The amount of the compensation should be determined by their agreement, or in the case of a dispute – by the court. What IP rights are protected? The Law extends the procedure of temporary legal protection of inventions to industrial de-signs. While an invention is protected within the scope of its published formula, an industrial design will be protected within the scope of a combination of its essential features reflected in the images of a product appearance contained in a published application. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Intellectual Property Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter, bear any liability for consequences of any decisions made in reliance upon this information.
1547499600000
Recent amendments to the Customs Register of Intellectual Property
We would like to inform you that, on September 4, 2018, the amendments to the procedure of, trademark inclusion into the Customs Register of Intellectual Property (“Customs Register”) came into force. The amendments were made by the new Federal Law dated 03.08.2018 No. 289-FZ“On Customs Regulation in Russia” (“Federal Law”). Click here to learn more. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Intellectual Property Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
1542661200000
Forthcoming fundamental changes of the Russian data protection legislation
We would like to inform you that on 10th October 2018, the Russian Federation signed a protocol modernizing the Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data dd. 1981 (“Protocol” and “Convention 108” respectively). The Convention 108, that has been adopted by the Council of Europe is the only legally-binding multilateral agreement in the field of personal data protection. Convention 108 provides a legal framework, and requires the parties to incorporate into their respective national laws, necessary measures to ensure protection of human rights in the area of personal data processing. Convention 108 was a source of inspiration for the EU data protection laws. Its provisions were also a guidance for Russian lawmakers. Convention 108 was opened for signatures in 1981, long before technological breakthrough and globalization in IT area. The purpose of this Protocol is the modernization of the Convention 108 in the light of new challenges. Russia, being the party to the Convention 108, will have to incorporate the amendments and ensure their proper enforcement. Below, you will find a brief overview of the key changes under the Protocol, which will likely be incorporated into Russian legislation in the near future. Harmonization with the EU General Data Protection Regulation (“GDPR”) The Protocol significantly increases the level of data protection and specifies principles and requirements already implemented in the GDPR, which has recently come into force. In this sense, incorporation of the Protocol’s provisions into national legislation will be a step forward for the harmonization of Russian data protection legislation with the European one. Key novelties under the Protocol The updated Convention 108 ensures a higher level of protection by introducing some fundamental changes, such as Data breach notification. Under the Protocol, a data controller shall, without delay, notify its data protection authority of any data breaches which may seriously interfere with the rights and fundamental freedoms of data subjects. Russian laws currently do not require data controllers to notify the data protection authority of security incidents. New types of sensitive data. The Protocol expands the categories of sensitive personal data to those recognized as sensitive data under the GDPR. e.g., it relates to genetic, trade union membership and ethnic origin. New roles in data processing. Apart from the data controller, Convention 108 regulates data recipients (parties to whom data are disclosed, or made available) and data processor (a party processing data on behalf of the data controller). Strengthening proportionality and data minimization principles. In accordance with the Protocol, data processing shall be proportionate in relation to the legitimate purpose pursued and reflect, at all stages of the processing, a fair balance between all interests concerned, whether public or private, and the rights and freedoms at stake. New data subjects’ rights. In particular, the Protocol specifies the right not to be subject to a decision, based exclusively on an automatic processing, without having data subjects’ views taken into consideration, the right to obtain knowledge of the reasoning underlying the processing and the right to object. Additional safeguards protecting data subjects. Data controllers are obliged to examine the likely impact of intended data processing on the rights and fundamental freedoms of data subjects prior to the commencement of such processing and implement relevant technical and organizational measures. Privacy by design principle. Data controllers and data processors shall design the data processing in such a manner as to prevent, or minimize, the risk of interference with data subjects’ rights and fundamental freedoms. Please note that this is not a full list of legislative novelties set out by the Protocol. Entry into force, further impact on data exchanges with the EU countries In accordance with the established procedure, the Protocol shall enter into force on the first day of the month following the expiration of a period of three months, after the date on which all parties to the Convention 108 have expressed their consent to be bound by the Protocol. Currently, only 21 parties to the Convention 108 (of 53) have signed the Protocol and therefore it has not entered into force yet. If all 53 parties do not sign the Protocol within 5 years after the date on which it was opened for signature (i.e. after June 25, 2018), then it will come into force automatically for those parties who have signed it. Officials of the Russian data protection authority (Roskomnadzor) already announced that they were working on a draft bill to amend legislation in accordance with the amended Convention 108. This means that Russia will implement the GDPR standards in its national legislation. If Russia efficiently implements provisions of the Convention 108, it will have more chances to be recognized, under the EU law, as a jurisdiction providing adequate level of data protection. This will remove many restrictions regarding international data transfers. The final decision in this regard will be made by the European Commission. We hope that the information provided herein will be useful for you. If you or any of your colleagues would like to receive our newsletters via e-mail, please fill in the 'Subscribe' form at the bottom of the page. Practices: Data Protection and Cybersecurity Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.
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Chambers Europe, 2020 recommends Maria Ostashenko for Intellectual Property.
Chambers Global, 2020 recommends Maria Ostashenko for Intellectual Property, Technology, Media and Telecommunications.
The Legal 500 Europe, Middle East & Africa 2020 recommends Maria Ostashenko for Intellectual Property, Technology, Media and Telecommunications, Commercial, Corporate and M&A.
Best Lawyers 2020 recommends Maria Ostashenko for Media law.
Who’s Who Legal 2019 recommends Maria Ostashenko for Data Privacy and Protection, Labour & Employment and Information Technology.
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