The Government Legislative Drafting Committee has approved a package of bills introducing compulsory video recording of all court proceedings, and creating a unified video storage system. The bills will be considered by the Cabinet of Ministers in due course.

The package of bills was developed by the Ministry of Justice, and it amends provisions of the Criminal Procedure Code (Article 259), Civil Procedure Code (Articles 228 and 229), Arbitrazh Procedure Code (Article 155) and the Administrative Procedure Code (Articles 204 and 205), thereby rendering video recording of court proceedings compulsory.

The current legislation provides for the possibility of video recording of court proceedings, and for its inclusion into the case file upon approval of the presiding judge. However, such video recording is not compulsory, it depends on the technical capability of the court in question, and is subject to the discretion of the judge.

According to the federal special-purpose programme “Development of the court system in Russia in 2013-2020”, it is planned to equip courts of general jurisdiction with technical facilities enabling audio and video recording. Thus, it will be necessary to equip 10.660 court rooms with video equipment, and create a federal unified video storage system capable of storing 17.5 TBytes.

It is planned that the package of bills relating to federal courts will enter into force on January 01, 2018; whereas the package of bill relating to magistrates - on January 01, 2019.

Notably, video recording in court rooms is strictly regulated in foreign jurisdictions. Thus, it is important to ensure that the recordings are not available to third parties, otherwise it may compromise court proceedings and ultimately - the judicial system. It remains to be seen whether the new bills will be able to ensure that.

The Ministry of Economic Development is currently working on a so-called “Financial rehabilitation” bill that will entitle creditors to acquire the debtor company by converting the accrued indebtedness into its shares. The bill is aimed at amending the law “On insolvency (bankruptcy)”. The conversion will be possible provided that the creditor proves that the debtor has either been acting unconscionably, to the creditors’ detriment, or has been trying to conceal information as to the negative asset value. The bill will provide creditors with an opportunity to quickly change the debtor’s owners, thereby introducing a good alternative to insolvency proceedings, which will replace those currently available (the supervision procedure, financial rehabilitation and bankruptcy administration).

Under the bill, compulsory conversion will also take place in the following cases: as a result of bringing the debtor’s owners to liability under Article 10 of the law “On insolvency (bankruptcy)”; if the court concludes that the transactions performed by the debtor’s owners are invalid; or if the debtor’s owners have an unexpunged or outstanding conviction for economic criminal offences. The new procedure will not be applicable to indebtedness accrued as a result of loans provided before the law comes into force.

Importantly, under current law it is impossible to change the debtor’s owner against its will (banks being an exception to the general rule).

The bill will enable creditors to get rid of ineffective owners, and will help state authorities to bring the idea of creating a bad debts’ bank to life. The bill will provide creditors with an opportunity to quickly change the debtor’s owners, thereby introducing a good alternative to insolvency proceedings.

Under the new procedure, the owners will independently develop and approve the relevant re-structuring plan, which will include compulsory debt-to-equity conversion. The plan will then be confirmed by the court, provided that the creditor proves that the debtor’s actions were unconscionable. The bill aims at extending the rehabilitation procedure up to 8 years.

Should the bill be passed into law, the judiciary will have to ensure that judges are sufficiently qualified, as their involvement in the re-structuring procedure is expected to be rather high.

The bill is currently being discussed with bank representatives and experts. We will keep our readers informed of the bill’s development.

The Russian Government has introduced a bill proposing a simplified procedure whereby Russian citizens can obtain land plots, located in the Far Eastern Federal District. The procedure will be applicable to land plots owned by state or municipal authorities, with the area of less than 1 ha. A Russian citizen who received a land plot from the authorities under the simplified procedure will be prohibited from entering into sale and purchase, lease, gratuitous use, and other agreements providing for the transfer of ownership rights in the land plot, with foreign citizens and foreign legal entities.

According to the bill, every Russian citizen will be entitled to avail of the simplified procedure for free only once. It will be applicable to land plots owned by state or municipal authorities, with the area of less than 1 ha, located in the Far Eastern Federal District. The land plots received from the authorities can be used for any purpose not prohibited by the Russian legislation. Provided that the land has been developed, ownership rights will be transferred within a 5-year period.

Rosreestr and the Ministry for Development of the Russian Far East are currently developing an e-service, whereby it will be possible to chose a suitable land plot. The e-service will provide maps and data from the state land registry.

Notably, the bill also proposes certain limitations of the land plots’ use. A Russian citizen who obtained a land plot under the simplified procedure will be prohibited from entering into sale and purchase, lease, gratuitous use, and other agreements providing for the transfer of ownership rights in the land plot, with foreign citizens and foreign legal entities. The limitations will remain effective even after the legal rights to the land plot will have been transferred to the relevant citizen (i.e. after the 5-year period). As the land plots are transferred for free, banks will not participate in the procedure.

The new procedure will support Russian citizens during the economic crisis and ensure the development of the Russian Far East. Notably, however, land plots in the Far East are often located in hard-to-reach areas, and considering that ownership to land plots will be transferred only after the land has been developed, citizens will have to work extremely hard to obtain ownership rights. Moreover, as land in that area is relatively cheap, it seems that the government is making a rather modest gift.

The Russian Ministry of Justice has developed and put out for public consultation a bill extending the list of information available in the Unified Notarial Information System. The bill introduces a Unified Public Registry of Notarised Powers of Attorney. Under the bill, the Registry will be free and available on-line 24/7, and will comprise various information on notarised power of attorneys.

According to the bill, the Unified Public Registry of Notarised Power of Attorneys will comprise the following information:

• information on the person that certified the notarised power of attorney;
• date of its certification;
• registration number in the notarial registry of the Unified Notarial Information System.

Information on the power of attorney revocation will remain available in the Unified Notarial Information System.

Under current legislation, the Unified Notarial Information System is available on-line, and shows a list of revoked power of attorneys (and includes information on the person that certified the revoked power of attorney, the date of its certification, its registration number in the Unified Notarial Information System, date and time of the revocation registration) under Article 34.4 of the Fundamental Principles of Legislation on the Notariat 1993.

Moreover, under the bill, state authorities rendering state and municipal services will be able to verify the powers granted under notarised powers of attorney, submitted to them for various purposes. State authorities will have to make a relevant application via the unified System on Interdepartment Electronic Cooperation.

According to the developers of the bill, it will ensure the safety of transactions carried out based on notarised powers of attorney. Should the bill be enacted into law, it might come into force on July 01, 2017. We will keep our readers informed of the development of the bill.

The Russian Prime Minister, Dmitry Medvedev, has recently signed a Resolution obliging state bodies to purchase Russian software, which will come into force on January 01, 2016. The Resolution is published on the Government’s official website. The prohibition is required in order to protect the internal Russian market, to promote the development of the Russian economy, and to support Russian manufacturers.

The Ministry of Telecom and Mass Communications of the Russian Federation (a.k.a. MinComSvyaz) has been working on the idea of limiting the purchase of foreign software since 2014. The draft Resolution was introduced for consideration of the Government on June 30, 2015. It was emphasised that the said prohibition is required in order to protect the internal Russian market, to promote the development of the Russian economy, and to support Russian manufacturers.

Starting from January 01, 2016, state authorities will be able to purchase foreign software only if there is no suitable Russian substitute listed in a special registry, or the relevant substitute does not possess the required functions. The registry will refer only to software exclusively owned by the Russian government, a municipality, a Russian non-commercial organisation, or a company, provided that Russian beneficiaries own more than 50% of its shares. The said software shall be available for purchase anywhere in Russia, and royalties to foreign companies shall not exceed 30% of the right holder’s earnings.

The registry will be maintained by MinComSvyaz. A special expert board with the Ministry will decide whether a particular software should be included into the registry.

According to the statistical data provided by MinComSvyaz, the annual royalties to foreign software manufacturers currently amount to RUB 285 billion, or 45% of all royalties payable for the total bulk of software used in Russia. 30% of the said royalties are paid by the public sector.