On 27 May 2022, the Russian President adopted Decree No. 322 “On the temporary procedure for the performance of obligations to certain creditors” (“Decree“).
According to the Decree, Russian persons (comprising the Russian state, regional state authorities, municipalities and Russian residents) are instructed to make payments for the use of intellectual property to foreign IP right holders (including penalties, fines and other payments) by transferring funds in rubles to a special O-type bank account opened in the name of the foreign IP right holder.
The Decree applies to the payments made to the following types of foreign IP right holders:
- Persons from states that have imposed sanctions on Russia (“Unfriendly States“) including persons under their control
- Persons who have supported or publicly called for the imposition of sanctions against Russia and Russian persons
- Persons who have either restricted the use of intellectual property belonging to them in Russia or who have discontinued their business operations in Russia
- Persons who have spoken negatively or publicly disseminated false information about Russia, its armed forces and Russian state bodies
The specific features of the O-type bank account will be determined by the Russian Central Bank within the next 10 days. However, the Decree already establishes that a foreign IP rights holder may transfer rubles from the special O-type account to a bank account outside of Russia only upon authorization from the Governmental Commission on Foreign Investments Control.
Also, unless the foreign IP rights holder has formally consented to the opening of an O-type bank account in its name, Russian persons (licensees) have the right not to make any royalty payments to such foreign person (yet, retaining the legal right to continue using the relevant IP) until such consent is obtained.
At the same time, the Decree does not apply to the following:
- Foreign IP right holders from Unfriendly States, which duly perform their obligations under their contract with the Russian resident (i.e., who have not discontinued supporting their contractual obligations in Russia)
- IP-related contracts necessary for the importation of medicines, medical devices, industrial, agricultural and food products into Russia
- IP-related contracts necessary for the provision of communication services (including internet access) and the production or use of computers, software and servers in Russia
- IP-related payments made by Russian individuals which do not exceed RUB 100,000, if the IP objects are to be used for personal needs.