Russian legislature to attempt making foreign IT companies open local offices

On 21 May 2021, a new draft bill concerning foreign IT companies operating in Russia was submitted to the State Duma. According to the text of this proposal, owners of foreign Internet resources with a daily audience exceeding 500 000 Russian-based users will be required to (1) establish a Russian legal entity or (2) open a representative office/create a branch under Russian law that would "fully represent the interests of the parent company and provide for its communication with the state regulatory authorities".

Foreign companies will also be required to register a personal account on the Roskomnadzor website (for communication with the governmental agency) and add "an electronic contact form for Russian citizens" to their webpages.

Those requirements, as stated in the explanatory note to the bill, will also apply to hosting providers, advertising systems operators and organizers of the dissemination of information on the Internet - the last term being a notion introduced by the antiterrorist law 97-FZ in 2014 which encompasses all web services that store the user data of Russian citizens.

Failure to comply with the new law may lead to severe consequences, including prohibition of promoting "foreign-owned" websites through advertisements and posting any advertisements on them, restriction on accepting payments from Russian citizens, ban on search engines and even partial or complete blocking of service.

The presence of local offices would give wider authority to Roskomnadzor in terms of control over the activities of Internet companies and would allow individuals and legal entities to file claims against them in Russian courts with the purpose of restricting or blocking certain information (for instance – defamation claims).

If approved, the bill will come into force as from 1 January 2022.