East-West Digital News reviews the most important developments on the Russian high-tech scene in 2015. Today’s story is about the main changes in the legal environment which affected foreign businesses.
1. Legislation on personal data storage
Russia’s new legislation on personal data storage came into force on September 1. According to the new rules, only databases located in Russia may be used to store Russian citizens’ personal data (See white paper by EWDN and EY). Thus, e-merchants and PSPs have been required to transfer the data to Russia in case of foreign data centers which were used before the new regulation.
Meanwhile, some companies have kept storing data abroad by making it “impersonal,” i.e. excluding names and other identifying information. A few companies have not taken any measures to comply with the law, hoping to remain unnoticed – or considering to leave the country.
2. Launch of the National System of Payment Cards (NSPC)
Russia also continued to put in place its National System of Payment Cards (NSPC or NSPK), following amendments to the payment legislation which were passed in May 2014. (See expert analysis by Elena Orlova).
The first stage of the NSPC project was completed in March 2015, with the launch of an independent platform to operate local payments and clearing operations. MasterCard, Visa and other international operators adhered to the NSPC, settling security deposits in accordance with the law. Their cards continue to be issued and accepted in Russia with the processing traffic transferred to the NSPC platform.
The second stage started in April 2015. The NSPC published its tariff policy and prepared for the launch of the first national payment cards – called ‘MIR’ or “peace” in Russian – by the end of 2015. Complementing the cards already in use in Russia, newly issued MIR cards are accepted in Russia only. However, co-badging agreements with international operators will allow Russian cardholders to use MIR cards abroad as well.
3. No foreign software in state computers
Under a law which came into force on Jan. 1, 2016, the state is not allowed to buy foreign software if there is an available domestic version. According to the ministry of communications, until now the share of imported software in the government sector was between 50% and 97%, depending on the type. The new regulation threatens the position of IT giants such as Microsoft, SAP, Oracle and IBM, who may lose a share of the Russian market.
Among the government structures whose work will be affected by the new law are the Central Bank, the mayor’s offices, the government and the state banks, noted an industry expert.
However, some state companies have already managed to explain their need for foreign software and have conducted tenders. State corporation Rosatom corporation held three tenders in November 2015 to buy Microsoft software, while RusHydro also bought Microsoft licenses for the 2016-2018 period.
