Our point of view

Update to Legal Alert: New Russian Data Localization Requirements - Final Interpretation?

14 August 2015

Update to Legal Alert: New Russian Data Localization Requirements - Final Interpretation?

As we have previously informed you, recent amendments were introduced to Russian personal data legislation through a law passed on 21 July 2014*. The amendments require in broad, general language that the personal data of Russian citizens be processed locally in Russia. Despite some suggestions from Russian officials to postpone the date for the new law to enter into legal force, the amendments will finally enter into effect on 01 September 2015.

Unfortunately, due to the ambiguity of the wording of the amendments and statements from lawmakers in the press, it was unclear for a long time how the new regulations would be interpreted and enforced by the competent Russian authorities.

Since the new amendments were introduced, they have sparked heated debates amongst lawyers, business representatives, and officials from public authorities. The Russian and foreign businesses were waiting for some official clarifications and instructions regarding the interpretation of the law. 

Important Clarifications from the Russian Ministry of Communications

On 04 August 2015, the Russian Ministry of Communications issued long awaited clarifications concerning the interpretation of the new legal requirements. The clarifications are not legal binding and cannot be considered as official regulatory document; however, we expect that it will serve as the instructions and guidance for official Russian authorities on how to implement the new law.

Based on this document and previous information from official representatives and competent Russian authorities, we would like to provide answers to the most important and frequent questions concerning the new amendments to personal data legislation:  

To whom does the new law apply?

The new requirements apply to Russian companies (including subsidiaries of foreign companies), representatives and branches of foreign companies in Russia. Foreign companies with no presence in Russia must also comply with the new law if they are focused on the Russian market and process the personal data of Russian citizens (e.g., certain foreign entities providing online services to Russian citizens without representative office in Russia).

Does the new law apply to data collected and processed abroad before 01 September 2015?

No, it does not, but this rule works only if such data is not updated using a foreign server after 01 September 2015. It is not prohibited to further process the “old” data using a foreign server.

Does the law permit processing personal data collected after 01 September 2015 using foreign databases?

The personal data of Russian citizens collected after 01 September 2015 may be processed using foreign databases provided that such data is (i) initially collected in Russia, (ii) further updated using databases located in Russia and (iii) an actual replica of the same data is stored within Russian borders.

Does the new law apply to the processing of HR data?

No, it does not, except to the limited extent set forth in Russian labour legislation. For example, as it is stipulated by law**, the personal data of employees required for signing employment contracts may be collected and further processed using foreign databases.

We recommend that our clients consider the answers to these four questions as a roadmap while complying with the new legal requirements.

For more information on the changes or on Russian personal data requirements in general or more specific advice, please contact:

Luke Wochensky
Counsel
Moscow: Tel. +7 (495) 662-6434 | Mobile +7 (964) 575-3511
St. Petersburg: Tel. +7 (812) 363-3377 | Mobile +7 (921) 330-4063

luke.wochensky@hannessnellman.com

Pavel Falileev
Associate
Tel. +7 (495) 662-6434 | Mobile +7 (903) 597-02-60

pavel.falileev@hannessnellman.com 

* Federal Law No. 242 on Introducing Amendments to Certain Legal Instruments of the Russian Federation
** Article 65 of Labour Code of Russian Federation