The Ministry of Digital Development planned to block payments to foreign IT companies without representation in Russia

Roskomnadzor will blacklist companies.

The Ministry of Digital Development, Communications and Mass Communications has published a draft resolution that will supplement the law on the obligation of international IT giants to open representative offices in Russia.

The law came into force on July 1, 2021. There are sanctions for refusing to open representative offices before January 1, 2022. One of them is limiting payments and transfers to the company. The draft resolution spells out how this will work.

Roskomnadzor will maintain two lists. The first is with companies that did not comply with the law. Banks will be required to cover any payments made to them.

The second is with foreign payment service providers, not banks, who accept payments to companies from the first list. If a company from the second list does not eliminate the violation within 30 days, Roskomnadzor will block it in Russia.

There are 22 foreign payment service providers in the country, according to the Central Bank. Among them are Alipay, Apple, Google, Samsung.

The lists will be publicly available. Roskomnadzor will be obliged to remove the company from the list within three days, after fulfilling the requirements of the law or by court decision.

Google, Facebook, Twitter, Spotify and TikTok account for 25–50% of online advertising purchases in Russia, cites data from representatives of the country’s five largest advertising and communications holdings. Vedomosti

The authors of the law want to “reduce tax evasion” and “replenish the treasury,” says managing partner of AVG Legal Alexey Gavrishev. But the measures will complicate advertising of goods and services and increase its cost, the expert believes.

By January 1, 2022, international IT companies with a daily audience from Russia of more than 500 thousand users must open a representative office in the country. If companies do not comply with the requirements, their sites will be excluded from search results, prohibited from advertising, prohibited from collecting and transmitting personal data, and may be blocked.

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