The Decree[1] of the President of the Russian Federation, which came into force on May 20, 2024, established a temporary permissive procedure for transactions involving the alienation of exclusive rights to the results of intellectual activity or to the means of individualization, as well as the performance (enforcement) of monetary obligations under such transactions, between acquirers-Russian residents and persons related to so-called “unfriendly” states.
Permits for the execution of the said transactions shall be issued by the Government Commission for Control over Foreign Investments in the Russian Federation upon application of the right holder, acquirer or their representatives.
Such permission may contain, among other things, a condition on the transfer of funds to a special ruble “O” type account intended for settlements of monetary obligations with right holders, foreign creditors and persons under their control. Transfer of funds to the special “O” type account is recognized as proper fulfilment of monetary obligations.
A special “O”-type account is opened by the acquirer in the name of the right holder and, in some cases, in the name of a foreign creditor or a person controlled by it.
Transfer to a bank or other account of the right holder, a foreign creditor or a person controlled by it, including a bank account opened in a bank located outside the territory of Russia, of funds transferred to the special “O”-type account is carried out only with the permission of the Government Commission for Control over Foreign Investments in the Russian Federation.
Russian Government must approve more rules for issuing such permission.
The Decree also provides for a number of exceptions.
[1] Presidential Decree No. 430 from 20.05.2024 “On the Temporary Procedure for Acquisition of Exclusive Rights of Certain Rights Holders and Execution of Monetary Obligations to Certain Foreign Creditors and Persons Controlled by Them”.
Permits for the execution of the said transactions shall be issued by the Government Commission for Control over Foreign Investments in the Russian Federation upon application of the right holder, acquirer or their representatives.
Such permission may contain, among other things, a condition on the transfer of funds to a special ruble “O” type account intended for settlements of monetary obligations with right holders, foreign creditors and persons under their control. Transfer of funds to the special “O” type account is recognized as proper fulfilment of monetary obligations.
A special “O”-type account is opened by the acquirer in the name of the right holder and, in some cases, in the name of a foreign creditor or a person controlled by it.
Transfer to a bank or other account of the right holder, a foreign creditor or a person controlled by it, including a bank account opened in a bank located outside the territory of Russia, of funds transferred to the special “O”-type account is carried out only with the permission of the Government Commission for Control over Foreign Investments in the Russian Federation.
Russian Government must approve more rules for issuing such permission.
The Decree also provides for a number of exceptions.
[1] Presidential Decree No. 430 from 20.05.2024 “On the Temporary Procedure for Acquisition of Exclusive Rights of Certain Rights Holders and Execution of Monetary Obligations to Certain Foreign Creditors and Persons Controlled by Them”.