Russia Seeks New ‘Impossible' Deadline For Server Localization of Jan. 1, 2015

By Sergei Blagov

Sept. 5 —Foreign companies doing business in Russia might be unable to meet a quicker Jan. 1, 2015, deadline to comply with a recently enacted law for placing their computer servers within the country, which is set forth in a recently released bill, a Russian information technology and media attorney told Bloomberg BNA Sept. 5.

The underlying law (Federal Law No. 242-FZ), which was enacted July 21, had set a compliance deadline of Sept. 1, 2016.

“Obviously, it would be impossible for many companies, mainly foreign, to meet this new deadline,” Vyacheslav Khayryuzov, a senior associate and head of IT & Media at the Noerr law firm in Moscow, said.

Although an explanatory note to the amendment bill says moving the deadline would “encourage a more operative and effective securing of personal data of Russian citizens and compliance with privacy of communications principle,” Khayryuzov said, “deputies of Duma openly say that they consider this as a reply to Western sanctions” related to Russia's actions in Ukraine.

Local Data Centers, Storage

Bill No. 596277-6 was submitted to the State Duma, the lower house of Parliament, Sept. 1, and the approval process started Sept. 2, according to a Sept. 2 Duma announcement.

The server localization measure will require international companies doing business in Russia, such as retailers, social networks, transportation providers and banks, “to place their servers within Russia if they plan to continue making business in the market,” Irina Anyukhina, a partner at the ALRUD law firm in Moscow, said in a Sept. 4 statement.

Khayryuzov said that under the amendment bill, foreign businesses might need to open data centers or at least have data storage capacities in Russia by Jan. 1, 2015, or face the risk of being blocked.

When the initial server localization bill was enacted in July, Khayryuzov told Bloomberg BNA that the law might make foreign investors “reconsider their plans in Russia or even stop their Russian business which would lead to substantial losses to the Russian economy.”

Brazil Backed Off Similar Effort

In March, the Brazilian government agreed to remove from pending legislation a provision that would have required that global Internet companies, such as Google Inc. and Facebook Inc., maintain any collected personal data of Brazilians on servers located in the country.

That provision was added to pending legislation in July 2013, in reaction to allegations that the U.S. National Security Agency surveillance programs revealed by former U.S. government contractor Edward Snowden included reviewing the communications of Brazilian officials.

To contact the reporter on this story: Sergei Blagov in Moscow at correspondents@bna.com

To contact the editor responsible for this story: Donald G. Aplin at mailto:%20daplin@bna.com

Full text of the bill is available, in Russian, at http://op.bna.com/pl.nsf/r?Open=dapn-9nnl5s.

Full text of an explanatory note to the bill is available, in Russian, at http://op.bna.com/pl.nsf/r?Open=dapn-9nnkub.