Russian Federation: Russia Takes Steps To Implement Import Substitution Plan For Software

On June 16, 2015, the Russian Duma—the lower house of the Russian parliament—approved Legislative Bill No. 764677 in a third (and likely final) reading, taking another step forward on an import substitution strategy for software used in Russia.1 Earlier this year on April 1, 2015, the Ministry of Communications and Mass Media ("Minkomsviaz" or the Ministry) issued Order No. 96 "On the adoption of plan for import substitution of software" ("Order No. 96"). The Russian government also drafted and published a regulation on the public procurement of software for federal and municipal needs in February 2015 (the "draft Software Procurement Regulation").

These steps are aimed at implementing the Russian government's strategy of preference for domestic IT products in federal government and municipal procurement programs. The stated goal is to support Russia's domestic IT companies and, ultimately, to reduce the dominant position of foreign (primarily U.S.) software in Russia's domestic software market. Presently, according to some experts, imported software accounts for 95 percent of the market in virtually every category of corporate and office software.

Should U.S. software giants be concerned? Probably not now, but they may want to pay attention to Legislative Bill No. 764677 and other steps the Russian government is taking to effect import substitution, including Order 96 and the Software Procurement Regulation.

Minkomsviaz's Order No. 96 contains an addendum that divides all software products into three categories:

  • Category 1 includes B2B apps (ERP, CRM and BI), antivirus software, data security software and web-based services utilized in corporate Russia (email, Internet browser, instant messaging and maps).
  • Category 2 includes desktop and mobile operating systems (OS), server OS, database management systems, cloud infrastructure and virtualization management systems, and office user software.
  • Category 3 includes software for specific industries, namely: manufacturing (PLM, CAD, CAM and CAE), oil and gas, construction (BIM, CAD and CAM), healthcare, finance, and transportation.

The plan introduced by Order No. 96 calls for reducing imported software for government use, by 2025, having a 50-percent share of software in Categories 2 and 3 developed domestically and having a dominant share of domestic software in Category 1 (for example, web-based corporate services to be about 90 percent).

Some experts seem skeptical about this initiative. However, the Ministry appears optimistic and cites Russia's history of producing competitive Russian IT solutions in the corporate software market segments. Although the Ministry does not provide specific names, it probably has in mind Kaspersky® antivirus programs that are successful worldwide, including in the United States, and the Yandex® search engine, which still dominates Russia's market.

Legislative Bill No. 764677, approved in June, is titled as law "On Amending Federal Law on Information, Information Technologies and Protection of Information and Other Legislative Acts of the Russian Federation." Once approved by the Federation Council (the upper house of the Russian parliament) and signed by President Vladimir Putin, the bill will become law. The bill proposes that the law will come into effect on January 1, 2016.

If Bill No. 764677 becomes law, a registry of domestic software programs will be created. Inclusion of a software program in that registry will enable its owner to participate in Russian federal government and municipal procurement programs and receive preferential treatment in certain cases.

Under the bill, the criteria for inclusion of software in the registry are as follows:

  1. ownership of the software belongs to a single or several Russian entities;
  2. software is available for purchase on an open market;
  3. the total amount of license fees or other royalties paid to foreign entities and domestic entities controlled from abroad is less than 30 percent of gross receipts received by the software owner from the annual sales of the software;
  4. the software owner must be an accredited IT entity2; and
  5. the software does not contain data that are considered a state (government) secret.

Under the government's draft Software Procurement Regulation, an organization that is soliciting contractors and products for government needs would have to limit bidders only to owners of software that is included in the registry. If it does not do so, it has to explain the reasons. It appears the absence of a capable domestic software product in a particular software segment in which the bidding is organized would be a satisfactory explanation. For many public procurement programs, developers and owners of software programs that are not in the registry but that include open source software may also receive preferential treatment.

Because the Russian government and municipal governments, as well as the financial and oil and gas sectors,3 are the main purchasers of software (others often obtain software illegally or on the gray market), the import substitution for software measures may have an impact on U.S. and other software companies that sell their software in Russia. Interestingly, Russia's import substitution measures do not appear to provide any preference to software owners from China, India and other non-western countries—countries that were not subject to Russia's food import ban4—but ultimately give preference to software owners in the countries of the Eurasian Economic Union.5


1 See text in Russian for Legislative Bill No. 764677:

2 Decision of the Government of the Russian Federation No. 758 of November 6, 2007, on the "Procedure of state accreditation of organizations carrying out activity in the field of information technologies."

3 It is quite likely that the import substitution measures would also apply to some private procurement if an entity has a significant government stake. For example, these measures most likely would be extended to such giants as Sberbank (savings bank of Russia, the largest bank in Russia) and Rosneft, Russia's largest publicly traded oil company.

4 Russia introduced the ban on most food imports from the United States, European Union and other countries on August 7, 2014, in response to Western sanctions on Russia over the Ukraine crisis.

5 A treaty establishing the Eurasian Economic Union (EEU) was signed on May 29, 2014, by the leaders of Belarus, Kazakhstan and Russia, and came into force on January 1, 2015. Armenia and Kyrgyzstan also signed treaties, acceding to the EEU.

Originally published July 15, 2015

If you have any questions about the topics discussed in this Alert, please contact Max Voltchenko in our Philadelphia office, any of the attorneys in our Information Technologies and Telecom Practice Group, any of the attorneys in our Privacy and Data Protection Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.