In support of Russian software developers when executing public (state or municipal) procurement, the Federal Law N 188-FZ “On Amendments to the Federal Law ‘On Information, Information Technologies and Protection of Information’” and Article 14 of the Federal Law “On the contract system in the sphere of procurement of goods, works and services for state and municipal needs” was adopted on June 29, 2015 (hereinafter - the “Law”). The Law will come into force on January 1, 2016.
The Law provides for the creation of a unified register of Russian computer programs and databases (hereinafter - the “Register of Russian software”).
Rules for forming and maintaining the Register of Russian software, scope of its information and the procedure for making a decision on the inclusion of information in the Register of Russian software shall be established by the Government of the Russian Federation. Presently, the Ministry of Telecom and Mass Communications of the Russian Federation submitted to the Government the revised draft resolution of the Government of the Russian Federation, approving the Regulations for forming and maintaining the Register of Russian software (hereinafter the Regulations1).
Software, details of which are included in the said Register of Russian software, is recognized as originating in Russia.
Under the Law, the Register of Russian software contains information on the software that meets the following requirements:
- The exclusive right owner to the software globally and for the duration of the exclusive right is the Russian Federation / constituent units of the Russian Federation / municipality; a Russian non-profit organization, which decisions cannot determine the foreign entity and the supreme management body, is formed by the abovementioned public entities and (or) citizens of the Russian Federation; a Russian commercial organization, in which the total share of direct and (or) indirect participation of all of the abovementioned entities and citizens of the Russian Federation is more than fifty percent; or any citizen of the Russian Federation.
- Software is lawfully placed on the market in Russia; the software copies or the right to use the software freely disposed in the entire territory of the Russian Federation.
- The total amount of payments under the license and other agreements in relation to software for the benefit of foreign entities, agents, representatives of foreign entities and Russian companies controlled by the said entities is less than 30 percent of revenue of the right holder for the calendar year.
- Information on the software does not constitute a State secret, and the software does not contain such data.
In addition, the Law provides the Russian Government with an opportunity to stipulate additional requirements for inclusion of the software in the Register of Russian software. There are only two such additional requirements in the Draft Regulations for software with information security features, namely the certificate of conformity in relation to the software and license to carry out such activity obtained by the right holder. The decision to include or refuse to include the information in the Register of Russian software is made within 65 working days from the date of registration of the right holder’s application, but not later than 10 working days from the date when a special expert council approves its opinion. A refusal may be challenged by the right owner at court within three months from the date of receipt of such a decision.
State or municipal customer in procurement shall be guided, first and foremost, by the Register of Russian software. According to the Regulations, exceptions are allowed only in the following cases:
- If the Register of Russian software contains no data on the software corresponding to the class of the software to be purchased.
- If the software from the Register of Russian software corresponds to the class of the software to be purchased, but does not meet the functional, technical and (or) operational characteristics of the software to be purchased set out by the customer.
- If the exclusive right to the software to be purchased belongs to a legal entity formed under the laws of the Russian Federation, and the information on this software, and (or) on the procurement constitutes a State secret.
Thus, due to the changes in the market of public procurement, the use of Russian origin software in the previously inaccessible IT- market niches is greatly increased. In this regard, it is important to mention that the Ministry of Telecom and Mass Communications of the Russian Federation revealed segments of enterprise software, which does not have enough reserve in the form of competitive domestic products (the share of imports in 2014 is specified in brackets, which is planned to be reduced by 2025 to 50 percent)2:
- Client and mobile operating systems (95 percent)
- Server Operating Systems (75 percent)
- Database management systems (86 percent)
- Tools for “cloud” infrastructure and virtualization management (93 percent)
- End-user office software (97 percent)
It is reasonable to assume that domestic developments in the abovementioned segments will enjoy special support from the State. There is also a plan to create an autonomous non-profit organization, aimed at organizing collective software development for segments with high dependence on foreign software.3