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On May 27, 2022, a Decree of the President «On the Temporary Procedure for Fulfillment Obligations to Certain Right Holders». This Decree sets out certain list of IP owners, of their debtors and the fees to be paid in accordance with this Decree. On July 19, 2022, the Clarifications were given by the Ministry of Economical Development on the application of this Decree.

Application of the Decree

The Decree establishes the temporary procedure for payment of royalties and compensations related to use of the results of intellectual activity or means of individualization, the rights to which belong to the following categories of right holders, which:

  1. are foreign right holders associated with states unfriendly to the Russian Federation; (NB! This rule shall not apply in respect of right holders, which 1) duly fulfill their obligations under IP-related agreements concluded with Russian counterparties: 2) «controlled» by a Russian company or a Russian citizen, provided the information about such control (e.g., about the Russian ultimate beneficial owner) has been disclosed to Russian tax authorities); or
  2. publicly supported the imposition of restrictive measures against Russia, Russian citizens, or legal entities, or who have publicly called for the implementation of such measures; or
  3. banned, terminated, suspended or substantially restricted the use of intellectual property and/or means of individualization in the Russian Federation after February 23, 2022, in order to comply with sanctions or for other so-called «non-economic» reasons; or
  4. suspended or significantly limited the production or supply of goods to the Russian Federation and the provision services after February 23, 2022, in order to comply with sanctions or for other «non-economic» reasons; or
  5. are the right holders who committed actions to discredit the armed forces of the Russian Federation and/or performance of the duties of the state bodies outside the territory of the Russian Federation, or have published «fake news» (as defined under Russian law) about the actions of the Russian army or the state performance of the duties of the state bodies outside the territory of the Russian Federation; or
  6. right holders who disseminated information online that expresses a clear disrespect for society, the state, state bodies, official state symbols of the Russian Federation, constitution, in an offensive manner that attacks human dignity and public morals.

Under the provisions of the Decree, it applies to:

  • payments under license agreements, sub-licenses, agreements on the transfer of rights to manage the intellectual property and other agreements relating to the use by the debtor of the intellectual property and (or) other signs of identification;
  • penalties and other pecuniary sanctions provided for in the above mentioned contracts and agreements.

The provisions of the Decree shall apply to all legal relations involving the fulfillment of monetary obligations related to the use of intellectual property objects towards the right holders listed in paragraph 1 of the Decree (except for cases in which the exceptions are applicable), regardless of the timing of obligations and the time of need for payment, regardless of the nature of the obligation (under an agreement or without agreement) or the type of agreement (obligation).

The Special «O» type account

Payments must be made into special «O» type accounts exclusively in Rubles. The IP owner or his representative is not required to appear in person to open a special bank account.  The decision to open a special account of the «O» type may be made only by the debtor, namely, the account should be opened at the request of the debtor in an authorized bank in the name of the right holder and is intended for settlement of obligations and such opening does not require the participation of the right holder.

Only one account can be opened for one right holder, so the authorized banks will share the information on «O» type accounts opened for the right holders. 

The bank notifies the IP owner or his/her representative of the opening of the special bank account and provides its details.

It should be noted that If the right holder has not given written consent to making a payment to a special account or has not published the necessary details on its website, the debtor has the right not to make payments until such consent is received and not be considered a breach of obligations, including those related to the payment of penalties and other financial sanctions. 

If the debtor duly fulfills the requirements of the Decree, he reserves his right to use the result of intellectual activity and (or) means of individualization on previously applicable conditions.

NB! At the same time, the Decree provisions do not create new grounds for the accrual of rights to use the results of intellectual activities or means of individualization. For example, if the license agreement is not concluded or the debtor has not acquired the right to use the intellectual property object, the right to use the corresponding intellectual property object on the basis of the Decree does not arise either.

If the activity of the right holder involves the conclusion of agreements with any person who has contacted him and/or making payments in favor of the right holder by any person using IP, the rights to which belong to the right holder, such person is obliged to publish information about the details of the special «O» type account on his website on the Internet and ensure the technical possibility of making payments by debtors to the Special «O» type account. Such publication will be considered as the consent of the right holder to the payments. 

The right holders, the debtors or their representatives, are entitled to apply to the Government Commission for Control over Foreign Investments in the Russian Federation for permission to transfer funds from the special «O» type account to the other account of the right holder.

Exceptions from the Decree

The Decree does not apply to:

(1) to contracts/agreements with indicated in the Decree IP owners, which subject matter is:

- IP rights necessary to import and/or production in the territory of the Russian Federation of medicines, medical devices, industrial and agricultural products, food products;

- IP rights necessary to the provision of communications services;

- IP rights necessary to creation and/or use on the territory of the Russian Federation of computer programs, databases, information systems and data processing centers;

(2) to payments not exceeding 100,000 RUB or an amount in foreign currency equivalent to 100,000 RUB made by a resident individual in connection with his use of intellectual property and/or means of individualization for needs not related to entrepreneurial activities;

(3) to right holders duly performing their obligations under contracts/agreements concluded with debtors.


In fact, the Decree was adopted to prevent one-side termination of license agreements due to non-payment, because a lot of licensees in Russia cannot fulfill their obligations to pay royalties because of sanctions in the banking system. The same procedure was in the beginning of May set up for payment to foreign companies of obligations arising from credits and financial instruments.

If the Decree is construed only in this narrow way: that it is applied only to license obligations. It means that the foreign IP owners, who are not leaving the Russian market, are continuing communication with their licensees and provide necessary goods (if any), information (in agreed), brand management (if agreed), and accept license fees - these IP owners are not affected by this Decree. 

But the wording is quite vague, and it may be construed in the way, that compensations for infringement of IP rights should also be paid in accordance with this Decree. Although, on July 19, 2022, the Clarifications were given by the Ministry of Economical Development on the application of this Decree, which allow professionals to suppose, that the Decree was not intended to be construed in such a broad way. 

Therefore, we recommend double-checking the applicability of Decree No. 322 to your transactions, as well as monitoring further clarifications of State authorities and law enforcement practice.

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