On 1 September 2015 new requirements relating to the storage of personal data will come into force in Russia. These changes are highly controversial, as they will require any databases used to process the personal data of Russian citizens to be physically located in Russia.
When these changes were first announced it seemed they would apply to all legal entities involved in the processing of personal data of Russian citizens, including employers – whether Russian entities or not. See our October 2014 client alert for further details.
This would not now appear to be the case. Following a request for clarification on the ambit of the new legislation, our Moscow office has received confirmation from the Legal Department of the Russian Ministry of Communications and Mass Media that these provisions will not apply to employers in so far as they are processing that data for employment law purposes.
It seems that employers should be able to rely on one of the exemptions in the new legislation, namely where the processing of data is necessary for the performance of functions, authorities and obligations imposed by the laws of the Russian Federation or international treaties. The Ministry has confirmed that “laws of the Russian Federation” will include the Federal laws and Labour Code which govern labour relations.
In practical terms this should mean that international employers which process data about Russian employees will continue to be allowed to store the data in foreign data centres if and to the extent that such processing is required for employment law compliance purposes.
A note of caution, however. Although the guidance from the Ministry will be welcomed by employers, especially foreign companies located outside Russia, it is not legally binding. Ultimately it will be for the Russian courts to interpret the scope of any exemptions under the new legislation. It does however give a strong indication of the approach that is likely to be adopted with regard to employers.