On July 31, the President of Russia signed Federal Law No. 258-FZ "On Experimental Legal Regimes in the Field of Digital Innovation in the Russian Federation."
In accordance with the law, the experimental legal regime (hereinafter referred to as the EPR) is the application of special regulation in the areas of development, testing and implementation of digital innovations against participants in the experimental legal regime for a certain period of time. In turn, digital innovations are new or significantly improved products that are created or used in a number of areas using technologies, the list of which must be approved by the Government of the Russian Federation. Such products can be not only goods, but also the results of work, services, protected results of intellectual activity.
EPR can be used both in the areas specified in the law, for example, in medicine, agriculture, industry, and in other areas that must be determined by the Government of the Russian Federation. The purpose of the adoption of the law on EPR, in particular, is called "attracting investment and creating favorable conditions for the implementation of digital innovations."
The ESR law achieves these goals in two ways: clarifying the rules to make regulation more understandable and predictable, and changing or eliminating rules that impede the use or development of a digital product. The provisions of the EPR program, however, can exclude or change the effect of the provisions of the law only if it is expressly provided for by the relevant law, which makes it slightly difficult to introduce an EPR in most cases.
The EPR program must contain its conditions and each time it must be approved by the Government. If the EPR is subject to application in the financial market, its program is approved by the Central Bank of the Russian Federation.
Conditions for establishing EPR:
- The existing legal regulation contains norms that make it impossible or significantly complicate the implementation of digital innovations;
- There is a technological possibility of using digital innovations, but this does not exclude the incompleteness of technical, technological and organizational preparation for this;
- The establishment of the EPR should lead, for example, to the emergence of new types of economic activity, the expansion of the composition of goods, an increase in profits and a decrease in costs, an increase in the efficiency of public administration;
- The person who initiated the establishment of the regime provided an assessment of the risks that the new regulation may cause for the interests protected by federal law, and developed measures to minimize such risks.
- EPR is established in relation to one or more persons for a certain period and, as a rule, in a certain territory. The maximum period for the introduction of an EPR is 3 years, however, it can be extended by another year for those persons who have completed the EPR program and do not object to the extension of the regime.
The introduction of the regime can be initiated by a person who wants to receive the appropriate benefits, and in some cases, state bodies and local self-government bodies.
In order to initiate the introduction of the regime, it is necessary to submit an appropriate proposal to the body authorized by the Government with a description of the proposed special regulation and measures aimed at minimizing the risks of causing harm to legally protected interests. A foreign organization cannot be the initiator.
The decision to introduce EPR is taken by the relevant body authorized by the Government, taking into account the opinion of the body in the area in which the relevant regulation is requested, and also taking into account the conclusion of the organization of the business message. If the regime is not introduced throughout the country, it will be necessary to obtain an opinion from the authorities of the subjects in whose territory the initiator wants to introduce a "regulatory sandbox". Further, the proposal is submitted to the Government of the Russian Federation.
If the Government makes a positive decision on the establishment of the EPR, those persons who did not participate at the stage of the EPR proposal have the right to participate in this regime. The status of an EPR participant can be terminated both due to the expiration of the participation period, and in connection with a gross violation of the provisions of the EPR program.
The government can change the EPR subject to certain conditions. EPR can also be suspended or terminated. The organization of the business community is obliged to monitor the EPR, following which the Government of the Russian Federation decides on the need to change the EPR.
The law will come into force in January 2021.