Lidings client seminar 2013 (in English)

LIDINGS

October 2013, Moscow

Leading the Way in Russian Law

Andrey ZeleninPartner, Head of Dispute Resolution

Sergey PatrakeevCounsel, Co-head of Real Estate

Vadim KonyushkevichSenior associate, Corporate

SEMINAR ON RECENT CHANGES TO THE RUSSIAN LEGISLATION

ABOUT LIDINGS


Lidings is leading legal advisor in the Russian marketproviding unparalleled legal advice to internationalcompanies – leaders in their industry sectors, operating inRussia and the CIS on a wide range of business and legalmatters

The Firm’s offices in Moscow and St. Petersburg comprisemore than 25 lawyers

PRACTICE AREAS

BANKING AND FINANCE

CORPORATE AND M&A

DISPUTE RESOLUTION

EMPLOYMENT

GOVERNMENT RELATIONS

INTELLECTUAL PROPERTY

REAL ESTATE AND CONSTRUCTION

TAX AND CUSTOMS


LEGAL ADVICE TO FOREIGN BUSINESSESOver 90% of the Firm’s clients are multinational companies andcorporations

Lidings is currently advising over 350 international companies form 35countries worldwide with special focus on the companies frompharmaceutical, automotive, aviation, financial, and energy sectors


This is a snapshot only of the companiesLidings offers comprehensive legalservices to. For further informationabout our expertise please refer to theLidings website www.lidings.com

*

“Best Law Firm in Real Estate and Dispute Resolution in Russia”ACQ Finance, 2012

“Best Life Sciences practice in Russia”Who is Who Legal, 2012

“Second place in the rating of the most visible Russian law firms”Martindale-Hubbell, 2011

“Foreign Business Advisory Law Firm of the Year in Russia”ACQ Finance, 2010

“TOP-15 leading M&A advisers in Russia”Mergermarket, 2011

“TOP-20 leading Russian law firms”PRAVO.RU, 2011

“Recommended legal adviser in Banking and Finance”IFLR1000, 2012

“Recommended legal adviser in all key practice areas” The Legal 500 EMEA, 2013

RECOGNITIONLeading Russian and internationaldirectories recommend Lidings in keypractice areas highlighting its expertisein advising foreign businesses in Russia

*


Lidings’ lawyers are highly skilled multilingual legal expertswho hold degrees from the best institutions in Russia andabroad

Their expert knowledge of Russian legislation and of theintricacies of Russia’s unique business culture has built upLidings’ reputation as one of the top law firms in the nation

LAWYERS


Our lawyers act for a broad spectrum of foreign companies operatingthroughout Russia and CIS. Geographic range of our services coversthe most dynamic regions of Russia and the CIS including: Moscowand the Moscow region, St. Petersburg and the Leningrad region,Krasnodar region, Bryansk region, Samara region, Tver region,Kaliningrad region, the Republic of Bashkortostan, Tatarstan,Sverdlovsk region, and other major regional centers

GEOGRAPHIC RANGE


CORPORATE MATTERS


GENERAL INFORMATION ON THE REVIEW OF THE CIVIL CODE

The policy document underlying the review –The Concept of Development of the Civil Legislation

The Concept was developed on the basis of the Decree ofthe President of the Russian Federation dated 18 July 2008№ 1108 "On improvement of the Civil Code of the RussianFederation", approved at a meeting of the Council on thecodification and improvement of the civil legislation dated07 October 2009.


GENERAL INFORMATION ON THE REVIEW OF THE CIVIL CODE

Bringing the provisions of the Civil Code in accordance withthe current market requirements

Ensuring the stability of the civil legislation

Reflection of the court practice concerning application ofthe Civil Code

Bringing the provisions of the Civil Code in accordance withthe provisions of the European law

Achievement of uniformity in regulation of civil relations inCIS countries


MAIN GOALS OF THE REFORM

Legislative draft № 47538-6 “On amendments to the first,second, third and fourth parts of the Civil Code of theRussian Federation and in distinctive legislative acts of theRussian Federation has been divided into separate legislativedrafts which are enacted in blocks

ENACTING THE PRINCIPLE OF GOOD FAITH

Art. 10 of the Civil Code is complemented by the conceptof “action to circumvent the law with illegal purpose, orother deliberate bad faith exercise of civil rights”

Avoidance of law is now qualified as abuse of rights


GENERAL PROVISIONS OF THE CIVIL CODE

AVOIDANCE OF LAW

CUSTOM IS THE SOURCE OF LAW

Para 1 Article 5 of the Civil Code fixes a broader definition of“custom” (without pointing out the specific scope of itsapplication)

Custom is the source of law

The examples of customs – sources of law formed indifferent areas of activity, for example, local custom allowingfree gathering of mushrooms or free fishing



CORPORATE RELATIONS

The subject of regulation is "corporate relations“, i.e. onesconnected with participation in corporate organizations andmanaging them (Article 2 of the Civil Code)

Corporate relations belong to the category of civil law, notpublic law

The inclusion of these relations in the subject of regulationby civil law confirms the role of the Civil Code as the basis ofthe entire regulatory system of legal entities



THE SUBJECT OF CIVIL LAW REGULATION

STATE REGISTRATION OF RIGHTS IN REAL ESTATE

Inclusion of a new Article 81 “State registration of rights inreal estate” in the Civil Code

Introduction of state registration of rights, restrictions andburdens not only for real estate but also of other types ofproperty in cases provided by law

Competence of Federal Service of State Registration,Cadastral and Mapping has been increased to include areview of applicant’s authorities, legality of grounds forregistration, legality of transaction, if the right to propertyarises or terminates on the basis of notarized transaction


GENERAL PROVISIONS ON REGISTRATION


STATE REGISTRATION OF ESTATES IN REAL ESTATE

Since 01 March 2013 the following transactions are notsubject to state registration:

Sale of residential premises (Article 558 of Civil Code)

Sale of enterprise (Article 560 of Civil Code)

Gift contract of real estate (Article 574 of Civil Code)

Annuity agreement providing for alienation of real estate(Article 584 of Civil Code)



CANCELLATION OF STATE REGISTRATION OF CERTAIN TYPES OF CONTRACTS

THE CONCEPT OF LEGALLY SIGNIFICANT MESSAGES

Article 165.1 of the Civil Code has introduced the concept oflegally significant messages (notifications, declarations andothers), which are associated with the occurrence of civillaw related consequences for a person

Messages are deemed to be received from the moment oftheir delivery. If the recipient did not receive or read themby circumstances under his control, the message is stillconsidered to be delivered

Special procedure of exchange of the messages can resultfrom custom or practice

The emergence of this article has great practical importanceto the participants of civil relations, particularly with respectto consent to the transaction, the exchange of offer andacceptance, communication of information about thesubject of the transaction to the other side


TRANSACTIONS AND AGENCY

Amendments in effect since

01 September 2013

(NOTIFICATIONS, DECLARATIONS AND OTHERS)

THE GROUNDS OF DECLARING TRANSACTIONS AS VOID

The frames of the consequences of the transactionsinvalidity have been clarified with the aim to reduce theopportunity for recognition of transactions void. There is nolonger a presumption of nullity of a transaction whichviolates the requirements of the law (Article 168 of the CivilCode). Such a deal would now be recognized as voidable,unless otherwise provided by law

Challenging a transaction becomes more complicated: thelist of persons who may apply with such a claim is limited.Until recently a claim that the transaction is void could bebrought by any interested person. Now the legislator haslimited the possibility to use invalidation as a way out of thelegal relations



THE GROUNDS OF DECLARING TRANSACTIONS AS VOID

The court will verify presence of actual violation of therights and legitimate interests of the plaintiff by thetransaction. Now we need to wait for new court practice onthe issue in order to assess the impact of this amendment

A transaction may be declared void only if a certain set ofconditions are met:

- if the transaction violates the requirements of the law orother legal act

- if the transaction infringes public interest or the rightsand legitimate interests of third parties

- the transaction is not voidable under the law



THE GROUNDS OF ADMITTANCE OF TRANSACTION AS VOID

The concept of “error in essentia” has been introduced. Itrefers to the Party's obvious typographical errors,misconceptions about the nature or subject of thetransaction, etc.

The meaning of fraud includes "the intentional omission ofthe circumstances of which person acting in good faith hadto inform based on the terms of turnover

The three-year limitation period for claims for theinvalidation of the transaction and application itsconsequences shall not exceed 10 years from the date ofcommencement of the transaction. This time limit begins torun from the date when the person knew or should haveknown about the beginning of execution of the transaction



THE GROUNDS OF ADMITTANCE OF TRANSACTION AS VOID

General limitation period has not changed and equals to 3years. However now it is calculated from the date theperson became aware of the violation of his rights and ofwho is the proper defendant. A similar position wasexpressed in paragraph 12 of the Information Letter of theSupreme Court of the Russian Federation of 13.11.2008"Review of court practice on some issues related to therecovery of property from illegal possession." Now, thelimitation period is limited to 10 years as an absolute period,which should have a positive impact on the practice



INTRODUCTION OF A GENERAL RULE ON PRELIMINARY OR SUBSEQUENT CONSENT FOR CONCLUSION OF TRANSACTION

In a preliminary consent for the transaction the followingelements must be clearly defined: subject of the transactionfor conclusion of which consent is given, including itsparties, substantial terms or a method of theirestablishment

The subsequent consent (approval) to a must be specific.Silence is no longer considered as consent to the transactionor its approval



DECISIONS OF MEETINGS

The Civil Code amended Chapter 9.1, devoted to issues ofresolutions of general meetings

Legal consequences arise from the decisions of the meetingof members of the legal entity, as well as co-owners,creditors in bankruptcy, etc.

Decision of the meeting shall be deemed adopted if itreceives the majority of the meeting participants votes

The provisions of the Civil Code establish a number ofrequirements to the minutes of the meeting



The Civil Code provides for the grounds for recognition ofdecisions of meetings as invalid and a general principle ofthem being voidable unless the law establishes they are void(by analogy with the transactions)

Decision of the meeting is void, if it is rendered on a issuewhich is not included in the agenda, in the absence of aquorum on the issue, beyond the scope of competence ofthe meeting or if it is contrary to the principles of publicorder and morality (Article 181.5 of the Civil Code)

The existing company laws, i.e. Federal laws dated 08February 1998 № 14 -FZ "On Limited Liability Companies"and dated 26 December 1995 № 208- FZ "On Joint StockCompanies" ( Para 1, Article 181.1 of the Civil Code) willhave a priority in regulating the corporate meetings


DECISIONS OF MEETINGSTRANSACTIONS AND AGENCY

THE CONCEPTS OF UNLIMITED AND IRREVOCABLE POWERS OF ATTORNEY

The Civil Code for the first time introduces the concept of“irrevocable power of attorney”. Irrevocable power ofattorney:

The authority under an irrevocable power of attorney cannot be transferred to a third party. The terms of itscancellation can be stipulated in the text of the power ofattorney itself

The term of the power of attorney can be unlimited(formerly – 3 years). If no term is indicated it is valid within1 year


- is a method to secure the performance of thebeneficiary obligations towards therepresentative;

- may be issued to a representative in connectionwith business activities;

- is subject to mandatory notarization


THE CONCEPTS OF UNLIMITED AND IRREVOCABLE POWERS OF ATTORNEY

Additional methods for protection of rights and legalinterests under transaction committed by unauthorizedperson (Article 183 of the Civil Code):

A party to the transaction will have the right to refuse fromit until the approval of the transaction, if such a partybecame aware of the absence of authority of representativeto commit the transaction or abuse of his authority. Thecounterparty to a transaction concluded with anunauthorized person is entitled to request the other party,whether it is going to approve the deal. If it refuses toapprove the deal or its response is not received within areasonable time period, the other party may request theunauthorized representative to fulfill the transaction or mayabandon it unilaterally and demand compensation ofdamages from the unauthorized representative



AMENDMENTS TO THE REGULATION OF SECURITIES

Securities are now grouped into documentary and non-documentary ones. Documentary securities are qualified asgoods, while non-documentary securities – as liabilities orother rights

Documentary securities – documents which comply withformal requirements and certify rights, for implementationand transfer of which it is necessary to present the securityitself

Vindication of documentary securities from illegalpossession is carried out under the general rules onvindication with certain particularities

Non-documentary securities – liabilities or other rights,which are stipulated in the decision on their issuance oranother act of the issuer, implementation and transfer ofthese rights are possible only under special rules of recordof such rights


Amendments in effect since

01 October 2013

THE OBJECTS OF CIVIL RIGHTS

OBJECTS OF CIVIL RIGHTS

Record of rights to non-documentary securities can only bekept by an independent registrar, acting on behalf of theissuer, or by a depositary acting under a contract with theowner of the securities. Starting from 01.10.2013, the JSCwith a number of shareholders below or equal to 50, whichare now keeping the shareholder register themselves, themust transfer the register to an independent registrar within1 year

In case the seller avoids to register a transaction withsecurities in violation of the sale contract, the purchaser hasthe right to demand to make the required entries regardingthe transfer of title to securities through a court procedure

New rules on the protection of the violated rights of theholders of securities are adopted, which take into accountthe recent developments of judicial practice



INDIVISIBLE ITEMS AND COMPLEX ITEMS

Indivisible item – an item that cannot be divided withoutdestruction, damage or altering its destination. It exists as asingle object property rights, even if it is composed ofseveral parts. Replacement of certain components of theindivisible items with other components does create a newitem, if its essential properties remain unchanged

Execution may be levied upon the indivisible item only as awhole

If different items are connected in such a way that suggeststheir use with a common purpose, a complex item iscreated

Effect of the transaction involving a complex item extends toall of its items, unless otherwise provided by the terms ofthe transaction



BENEFITS, PRODUCTS AND INCOME

The legal regime of profits, production and income haschanged

Earlier - they belonged to the holder of the property, theuse of which resulted in such benefits, products and income

Now - they belong to the owner of the property (unlessotherwise provided by law, other legal acts, contract orotherwise follows from the nature of the relationship)



SINGLE REAL ESTATE COMPLEX

Independent object of civil rights - a combination ofbuildings, structures and other items united by a commonpurpose

A combination of items is considered a single real estatecomplex if one of the following criteria is met:

A single real estate objects is created from moment of stateregistration of ownership over the combination of itemsthat are part of such real estate complexLeading the Way in Russian Law

- inseparable physical or technological link between thereal estate objects (e.g., railroads, power lines,pipelines, etc.)

- location of real estate objects on one land plot


(Article 133.1 of the Civil Code)

PROTECTION OF BUSINESS REPUTATION OF LEGAL ENTITY

The rules on the protection of business reputation of anindividual apply, apart from the compensation of moraldamage

Refutation of discrediting information has to be done in thesame way that the defamatory information has beendistributed, or in other analogous way

If the defamatory information has been published in themass media, a legal entity shall have the right to demandpublishing its response in the same media, apart frompublishing the refutation

If defamatory information has become widely known andtherefore a simple refutation is insufficient, a legal entityshall have the right to request removal of the relevantinformation, suppress or prohibit its further spread byseizure / destruction of the physical media containing suchinformationLeading the Way in Russian Law


CONCEPTS SIMILAR TO COMMON LAW CONCEPTS

A statement on fact which is essential to the conclusion orperformance of a contract given by one party to anotherbefore or after signing of the contract

Liability arises when a party that has provided untruthfulstatement believed or had reasonable grounds to believethat the other party will rely on them

Consequences of untruthful statements:

PLANNED AMENDMENTS TO THE CIVIL CODE

STATEMENTS ON FACTS

- obligation to pay damages;- entitlement to cancel the contract unilaterally,

unless otherwise provided by the contract;- entitlement to invalidate the contract be due to an

errors

Similar to

“Representations”


INSTITUTIONS SIMILAR TO COMMON LAW INSTITUTIONS

An obligation of one party under the contract tocompensate the other party property losses, if they arise inconnection with the execution, amendment or terminationof the obligation. Proving the amount of damages is notrequired, a specific amount of losses is compensated in theevent of certain circumstances

GUARANTEE OF DAMAGE COMPENSATION

Analogue to

“Indemnity”



INSTITUTIONS SIMILAR TO COMMON LAW INSTITUTIONS

An account opened in favour of a depositor (bank’scustomer) with an the escrow agent (bank) based on aspecial conditional deposit contract (escrow)

The account is designed to isolate certain funds received bythe bank’s customers, in order to fulfill the obligations of thesaid customer towards its creditor (beneficiary)

An effective way to secure the obligations of the bank’scustomer towards its creditor


ESCROW ACCOUNT

Analogue to

«Escrow account»


AMENDMENTS TO PROVISIONS CONCERNING THE LEGAL ENTITIES’ STATUTE*

Legal entities to be divided on corporations (bothcommercial and non-profit organizations based onmembership) and unitary entities (non-profit organization)

General provisions on corporate contracts.

Joint stock companies no longer to be divided on the closedand open, “additional” liability companies cease to exist

Classification of business entities to the public and non-public depending on the method of shares distribution (bypublic subscription or privately)

Possibility to recognize a reorganization of a legal entity asinvalid through court procedure


*Legislative draft № 47538-6/2.The status of legislativeprocess – the second reading


AMENDMENTS TO PROVISIONS CONCERNING THE LEGAL ENTITIES’ STATUTE

Joint and several liability of the parent and subsidiarycompanies for the transactions made by a subsidiary withthe consent or pursuant to instructions of the principalcompany

A sole shareholder shall bear secondary liability for thedebts of a legal entity, if it is established that they haveresulted from execution of the sole shareholder’sinstructions



CONSIDERATION OF CASES INVOLVING FOREIGNERS


Arbitration clause between foreigners on definition of anarbitrazh court as competent to consider any current or futuredispute is recognized valid

Forum selection clause under which disputes between theparties are considered in the state of origin ofclaimant/respondent is recognized valid

Jurisdiction and venue of arbitrazh court is defined on thebasis of the APС RF, if forum selection clause does not specifythe particular arbitrazh court «APС RF» means the ArbitrazhProcedural Code of the Russian Federation

Mandatory provisions of the APС RF on jurisdiction and venueof arbitrazh courts cannot be modified by a forum selectionclause


Information Letter of the Presidium of the Supreme arbitrazh court No. 158 dated July 9, 2013

ARBITRATION CLAUSE ISSUES (1)

In case of assignment of the claims arising out of anagreement containing a forum selection clause, such forumselection clause remains effective both for debtor andassignee (new creditor)

If a party claims existence of an enforceable arbitration clauseon exclusive case consideration by a foreign tribunal, thestatement of claim shall be dismissed by arbitrazh courtwithout further consideration

Party’s intent to have a dispute considered by a particularcourt is confirmed by absence of its objections on courtjurisdiction before its first statement in the process of caseconsideration



ARBITRATION CLAUSE ISSUES (2)

Arbitrazh courts are required to rely on the provisions of theratified international treaties containing relevant conflict oflaws provisions

Arbitrazh courts shall recognize a choice of law clause if bothdisputing parties refer to it in their litigation documents

The mere parties’ consent on a competent foreign court doesnot imply that they also have consented on substantive law ofthe state of such foreign court

Parties are entitled to use any terms and statements forindication of applicable law in choice of law clauses

Super-mandatory provisions of the Russian Civil Code shallalways apply irrespective of applicable law consented on bythe parties



CHOICE OF LAW ISSUES

Requirement to provide information on content of foreign law may beimposed on the disputing parties by a separate court ruling

Failure to meet the above requirement deprives a party of the right toinvoke objections to defining the foreign law content by thecommercial court if the letter has assumed sufficient measures for itsdefining

Parties are entitled to provide expert opinion on foreign law content

It is considered that foreign law content does not need further definingif the relevant expert opinion contains necessary and sufficientinformation and is not objected by another disputing party

In case of contradiction between the foreign law content defining bythe disputing parties an arbitrazh court may address authorizedagencies or competent experts for their own interpretation of theforeign law content

Court decision/ruling may be modified or reversed if arbitrazh courthas failed to define foreign law content properly


FOREIGN LAW CONTENT ISSUES

If international commercial arbitration is competent toconsider a dispute, interim relief measures may be takenarbitrazh court at the place of residence or location of therespondent or his property

If foreign state court is competent to consider a dispute,interim relief measures may be taken by arbitrazh court only ifit has effective jurisdiction, namely, at the place of residenceor location of the claimant or his money/property or at theplace of breach of claimant’s rights

Arbitrazh courts shall not execute foreign state court orderson legal assistance if they are intended for recognition andenforcement of interim relief measures

Anti-suit injunctions made by foreign state courts against caseconsideration in Russia are non-enforceable


INTERIM RELIEF MEASURES ISSUES

Arbitrazh court is not entitled to revise the arbitral award onthe merits based on evaluation of its enforcement effect tothe public order in the Russian Federation;

In case arbitrazh court finds that recognition and enforcementof the foreign court decision and arbitral award iscontradictory to the public order of the Russian Federation, itrejects such recognition and enforcement;

To find contradiction of the recognition and enforcement ofthe foreign court decision or arbitral award to the public orderof the Russian Federation, arbitrazh court evaluates thearguments and evidence of the parties to the dispute;

Arbitrazh court implements the public order only inexceptional cases, apart from those established in paragraphs1-6 and part 2 of the article 244 of Arbitral procedural code.


NATIONAL PUBLIC ORDER (1)Information Letter of the Presidium of the Supreme arbitrazh court No. 156 dated February 26, 2013 «Review of the consideration by arbitrazh courts of the cases on the implementation of the public order clause as the ground for rejection of the recognition and enforcement of the foreign court decisions and arbitral awards»:

Content of the applicable foreign law is different from the Russian one

Evidence presented by the debtor does not prove that losses (penalty,compound interest) calculated under a civil contract and approved byforeign court/arbitration are of the punitory nature

Foreign court/arbitration orders a Russian party to the initial dispute topay the bail for case consideration in the appeal instance

Foreign legal entity does not comply with the requirements forapproval of the significant deals under its domestic law

In case of the spouses’ joint assets, collection of the assets of one ofthe spouses on the grounds of the foreign court decision or arbitralaward is adopted in absence of another spouse

There is a minor slip in the foreign court decision or arbitral award

Proceeding in foreign court/arbitration complied with therequirements of independence and impartiality of judges/arbitrators


NATIONAL PUBLIC ORDER (2)

The public order clause DOESN’T APPLY when:

Judge/arbitrator could influence one of the parties’ actionsduring the proceedings based on his job title and authority

Foreign court decision or arbitral award was adopted incontroversy to the international law principle of sovereignequality of the states


NATIONAL PUBLIC ORDER (2)

The public order clause APPLIES when:

Challenging transactions during bankruptcy proceedings on general grounds of invalidity provided by the Russian Civil Code

Special aspects of the challenging of the certain transactions of the credit organization, which has been declared as a bankrupt

Specific provisions for challenging transactions made by credit organizations


BANKRUPTCY PROCEEDINGS AMENDMENTS

Basic bankruptcy proceedings provisions addressed in the Resolution:

Resolution of the Presidium of the Supreme arbitrazh court No. 59 dated July 30, 2013 «On application of the Federal law on Bankruptcy No 63»

How to break presumptions of intention to cause harm to creditors established by law

Difference between intentionally harmful transactions and preferential ones

Legal qualification of suspicious transaction with credit organization

Legal qualification of regular business activity transaction

Collection of evidence for challenging transactions

Procedure of vindication of property obtained as a result of an invalid transaction to the bankruptcy assets mass

Vindication of property from the second (subsequent) acquirer

Vindication of property from the second (subsequent) acquirer

Calculation of interest for use of property subject to vindication to the bankruptcy assets mass

Constitution of a group of counsels with specialtechnical expertise

Analyzing/interpreting court practice in IP sphere

Granting a legislative initiative right

Granting a right on petitioning the Constitutionalcourt


INTELLECTUAL PROPERTY COURT (1)

Innovations:

Federal Constitutional Law No. 4-FCL dated December 6, 2011 «On amendments to various federal laws regarding constitution of the Intellectual property court» (the IP court’s activity commenced at the beginning of August, 2013)


INTELLECTUAL PROPERTY COURT (2)

Competence:

Federal Constitutional Law No. 4-FCL dated December 6, 2011 «On amendments to various federal laws regarding constitution of the Intellectual property court» (the IP court’s activity commenced at the beginning of August, 2013)

When competent as a FIRST-INSTANCE court

When competent as a CASSATION-INSTANCE court

Challenge of the state authorities’ legal acts in IP sphere

Cases considered by the IP court in the first instance

Challenge of the state authorities’ decisions on granting/termination of legal protection of IP, namely:

breach of anti-trust law requirements based on IP rights “juggling”

termination of trademark protection based on its non-use

patent invalidation

identification of a patent holder, etc.

All other cases involving IP issues considered by arbitrazh courts


MOSCOW CITY COURTFederal Law No. 187-FL « On amendments to various federal laws regarding intellectual property rights protection on the Internet» (so-called «Anti-piracy law»)

Innovations:

The Moscow city court has an exclusive competence toconsider the cases re IP rights protection on the Internet

The cases involve only movies/series (extension of the list ofIP falling within the frames of the «Anti-piracy» law isupcoming)

It is possible to block Internet-site based on interim reliefmeasures before case consideration on the merits

Liability extends to Internet-site owners, hosting providers,telecom providers

Extension of the Roskomnadzor’s authority in theenforcement proceedings


MERGER OF ARBITRAZH AND GENERAL JURISDICTION COURTS

On October 8, 2013 the President delivered to the State Duma a draft law «On merger of arbitrazh and general jurisdiction courts»

Legal effects:

Competence of arbitrazh courts will be fully delegatedto general jurisdiction courts

The Supreme court will obtain an exclusive right toanalyze/interpret court practice in all legal sphere

Courts merger will require to amend the Constitution

LABOUR AND MIGRATION


HIGHLY SKILLED PROFESSIONALS

Order of the Federal Migration Service of Russia dated 15 January2013 № 4. defined a list of authorized regional offices of FMS ofRussia processing applications and issuing work permits to foreignhighly skilled professionals

If the highly skilled professional will carry out work activities intwo or more Russian regions including Moscow city theapplication for work permits and invitations must be submitted tothe Federal Migration Service of Russia in Moscow

If the highly skilled professional will carry out work activities intwo or more Russian regions including the Moscow region theapplication for work permits and invitations must be submitted tothe Federal Migration Service of Russia in the Moscow region


Amendments have been introduced to the procedure of acceptance of documents


WORK PERMIT

The new requirement was introduced to the documentssubmitted for the purposes of drawing up of work permits forhighly skilled professionals

It is necessary to submit a notarized copy of the certificateconfirming education obtained by a foreign specialist. Anordinary copy can also be provided together with submissionof the original certificate, and no apostille is required for thesepurposes


New requirements for documents submitted to the Department of the Federal Migration Service of Moscow


INVITATIONS AND WORK VISAS

The new set of requirements by the Department of theFederal Migration Service of Moscow stipulates thatnotarized translation of apostilled copy of the marriagecertificate and the birth certificates for children accompanyingfamily members should be submitted when applying forinvitations and work visas


New requirements for documents submitted to the Department of the Federal Migration Service of Moscow


RESPONSIBILITY OF EMPLOYERS

• Failure to notify, or breach of order of notification ornotification form on payment of wages

• Failure to notify, or breach of order of notification ornotification form on termination of labor contract.

• Failure to notify, or breach of order of notification ornotification form on leave without pay for more than onecalendar month during the year

• Failure or delay in providing information about tax registrationof highly trained professional


Penalties were introduced for the following offenses:


The following sanctions for violation will apply:

• On officials – RUR 35,000 to RUR 70,000

• On legal entities – RUR 400,000 to RUR 1,000,000

Period of administrativesuspension of theemployer for violation ofemployment of foreignnationals:

Min. = 14 days

Max. = 90 days

REMOTE LABOUR

The following issues were resolved:

• Special features of conclusion and termination of laborcontact with remote employee

• Special features of the organization and safety of remoteworkers

• Special features of working time and rest time of remoteworker


Specific labor regulations on remote workers


PERSONAL DATA

Employer has no right to receive or process information aboutthe employee relating to specific categories of personalinformation in accordance with the relevant legislation of theRussian Federation in the field of personal data with exceptionof cases provided by Labor Code and other federal laws


Receiving and processing of personal data of employees


RIGHTS OF EMPLOYERS

The amendments are connected with establishment of work councils. A member of the work council may not be a person, who has not an employment relationship with the employer

The purpose of these councils is the accumulation of experience and preparation of proposals for :

• improvement of production activities

• improvement of individual production processes

• the introduction of new technology

• the introduction of new technologies

• improve productivity and worker skills

The law establishes limits to the powers of the works council: its competence should not include matters governed by corporate body and trade unions


Work counsils


The law stipulates that workcouncil is a special internal“production” bodyestablished on theconsultative and voluntarybasis from the number ofthe employees of theemployer

CUSTOMS UNION


ECONOMIC INTEGRATION

Customs Union + Eurasian EconomicCommission EU ?

United Customs Territory

Eurasian Economic Space


CUSTOMS UNION

EURASIAN ECONOMIC COMMISSION

Supreme Eurasian Economic Counsil(Heads of States level)

Eurasian Economic Commission


EEC Collegium(competent executive bodies)

EEC Counsil(Igor Shuvalov representing Russia)


Supreme Eurasian Economic Counsil:Approves Model Statutes (e.g., «On Competition»)

Counsil of the Eurasian Economic Commission:Approves documents having direct effect (e.g., CU TechnicalRegulations)

Collegium of the Eurasian Economic Commission:Approves documents of procedural nature (e.g.,«On Official Internet Site»)

EEC Official Internet Site: www.eurasiancommission.org(Decision of the EEC Collegium dated 16.04.2013 No.83)

EURASIAN ECONOMIC COMMISSION

CUSTOMS UNION

United Customs Territory

Uniform Customs Tarriff

Uniform Customs Code


TECHNICAL REGULATION

CU Technical Regulations

Agreement on Uniform Principles and Rules ofTechnical Regulation dated 18.11.2010 (createsnormative basis for elaboration of technical regulations)

Agreement on Eurasian Economic Commissiondated 18.11.2011 (provides for the competences of theEEC Counsil to approve technical regulations)


CU Technical Regulations –List of requirements which should be met by the goods approvedfor circulation on the CU territory

Standards –(list of standards is an annex to the relevant TechnicalRegulations) – national and international – provides for„threshold values“ which allow to prove the actual fulfillment ofthe CU Technical Regulations requirements

Guidelines –Only on national level – provide for procedures of tests (expertchecks) for the goods aimed to prove the fulfillment of the CUTechnical Regulations and Standards

Federal Law «On Technical Regulation» dated 27.12.2002No.184-FZ

• Compliance Confirmation

• Accreditaion procedures for the certification authorities andlaboratoriesLeading the Way in Russian Law

TECHNICAL REGULATION

CUSTOMS UNION

• New technical regulations (extensive development)

• Unification of Standards and Guidelines(intensive development)

• Anything changed following Russia‘s accessionto the WTO?


Prospects for elaboration of the uniform „rules of the game“ in the united economic space

Sergey PatrakeevCounsel, Co-Head of Tax and Customs PracticeTel.: +7(495) [email protected]


Вадим КонюшкевичSenior associateCorparate and M&A practiceТел.: +7(495) [email protected]

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Andrey ZeleninPartner, Head of Dispute Resolution Practice Tel.: +7(495) [email protected]

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